Sara Standish

Mainstreaming Climate Change and ’Green’ Investment Trends

In the last couple of weeks a number of issues near and dear to my heart
have gone mainstream…or at least they are getting a little more of the
limelight, which is fine by me. But, how did this happen? And what
does it have to do with emerging market investments in sustainable enterprise?

HBO recently debuted a movie in Washington DC called “Too Hot Not To Handle” that featured scientists talking about climate change. It was
well attended and featured speakers Senators McCain and Lieberman. Wait, what!?

Something seems out of place. HBO, the home of “The Sopranos” produced this film? Well, yes, and not only because of Laurie David, but also because climate change has become an issue that interests even an audience who spends their sunday night’s watching the mafia murder someone.

It turns out that that is just the beginning of the unlikely
marriages around recent environmental issues that are getting
considerable attention. From MTV to Time Magazine and Sundance, global climate change issues are making news.

And, consumers aren’t the only ones paying attention. Multinational companies are getting involved (and not in an Exxon Mobil anti-science lobbying sort of way). In fact, at a recent senate hearing on climate that WRI was invited to comment at, Wal-Mart made a strong case for mandatory emissions trading the U.S.

Many of these companies are taking action because they see an opportunity: the ability for their business to capture profit from the growth of new environmentally friendly markets. Jeff Immelt of GE certainly sees it that way, as the company is set to invest $1.2 billion per year in new technology that will make it a leading provider of environmental products.

Clearly, business senses a trend. Then its no surprise that a recent investment survey of investors by the National Venture Capital Association and Deloitte & Touche LLP more than 20% of global investors planned (within the next 5 years) to focus on the environment/energy sector. And in February esteemed VC firm, Kleiner Perkins Caufield & Byers announced a new $100 million fund to focus on “green” technologies.

But, in our globalized world, environmental challenges transend country borders. So, it seems logical that entrepreneurs in emerging economies will also be a source of innovation. The recent coverage of Brazil’s ethanol program is a large scale example of how a major emerging economy can harness business innovation to become a leader in biofuels. And one that the U.S. is turning heads in the U.S.

In a recent article in Environmental Finance, I highlighted a number of profitable, environmentally friendly companies Brazil, Mexico & China in an article about investment trends in emerging economies. Companies like Vehizero, a hybrid vehicle manufacturer in Mexico that recently introduced a small fleet of hybrid light trucks and taxis to the market. Co-founder, Sean O’Hea notes that the company had to temporarily stop promoting its new vehicles, because high demand was surpassing current supply.

But, I wasn’t the only one writing about green investments. Nicolas Parker and Anastasia O’Rourke from CleanTech Venture Network discussed the growing amount of investments in the cleantech sector. Cleantech Venture Network notes that in the last quarter of 2005 a record $502 million was invested in cleantech companies, a 59.8% increase over the same quarter in 2004.

So maybe someday I can expect to see a Fox News special on environmental challenges as a driver for business innovation, but I won’t hold my breath. And, I don’t need to, whether Fox covers it or not, its already here.