Sustainable Business Releases The State of Green Investing 2009

Filed under: Green Investment | |

Now that the stock market is showing signs of life again, green investors, who saw their portfolios sink even lower than the overall market, are benefiting from holding on. Unlike the mass of investors, who sold at the bottom of the market, green investors are taking a long term view. In 2008, many green mutual funds, ETFs and individual stocks sunk 50-80%, while the Dow shed about 40%. But green investors can also expect their portfolios to rise higher than the overall market as it recovers.

While the Dow is up 21% from its low in early March, cleantech indexes are up 30%. Green building stocks are up 11.6% in the past two weeks, exceeding the 7.9% increase registered by the S&P 500 and NASDAQ.   During a period of the most extreme withdrawals from U.S. mutual funds – 10 times the typical amounts – green mutual funds and ETFs have seen little outflow. Investors have been holding and, since the beginning of the year, buying into these funds.

Says Rob Wilder, founder of the bellweather Powershares WilderHill Clean Energy ETF (PBW), “They are hanging on, knowing there’s a bright light at the end of the tunnel.”

“People I work with are more optimistic than I’ve seen in years,” notes Sam Jones, portfolio manager of the New Power Portfolio. “The stimulus plan is a big piece of it – they finally feel they have backing. They’ve been swimming against the tide for a long time,” he added.

Clean energy and efficiency comprise about 14% of the American Recovery & Reinvestment Act of 2009. “All the elements we advocated for are in the plan,” says Elena Foshay of the Apollo Alliance, a key group involved in developing the cleantech provisions.

A survey of institutional investors representing over $1 trillion in assets, found that 49% are “more likely” or “much more likely” to increase their exposure to clean energy now than they were a year ago. Another 46% said their intentions haven’t changed, and just 5% said they’re “less likely” or “much less likely” to invest more in clean energy.

The optimism professional investors show in this survey demonstrates that despite the financial crisis and economic recession, investment momentum is growing to bridge the financing gap – institutional investors provide crucial long-term global financing for industries that mitigate climate change. (Survey conducted by New Energy Finance and DB Climate Change Advisors, Deutsche Bank’s climate change investment business).

Progressive Investor identifies the following green investment trends for 2009:

* Credit is already loosening up for clean energy projects in the US and Germany. Utility scale projects will likely drive growth beginning in the second quarter of 2009. Project financing hasn’t stopped, but has become less predictable, slower and more expensive.
* Green venture capital firms with a strong track record are able to raise funds, albeit more slowly. Those that raised funds before the crash have their pick of strong candidates at lower valuations.
* Worldwide, over $200 billion in incentives and spending for renewable energy, energy efficient buildings, smart grid and clean transportation is evident in stimulus bills across the world. Industry insiders expect the cleantech industry alone to create at least 2 million jobs in the U.S.
* The latest data from NASA shows unprecedented global warming in 2008 – 20 times that of recent annual warming, exceeding that of conservative climate model projections. 2000 scientists at a March conference in Copenhagen warned policy-makers to “vigorously” implement policies. Research shows that even the most stringent greenhouse gas reduction targets can benefit the economy, rather than hurt it.
* The big question for many years has been whether companies that make a commitment to sustainability outperform their peers. Last year, in the most difficult of economic periods, they did. In 16 out of 18 industries, companies with a commitment to sustainability outperformed industry averages by a significant 15%, representing $650 million in protected market capitalization per company, according to A.T. Kearney. Investing in sustainability for the long term will prove to be the best way to protect a company’s value through the months and years ahead.

Leaders in each Green Stock category should outperform in 2009, including:

* Solar: First Solar (FSLR), SunPower (SPWR)
* Wind: Vestas (VWS.CO), Gamesa (GAM.MC)
* Geothermal: Ormat (ORA), WaterFurnace (WFI.TO)
* Smart Grid: IBM (IBM), Itron (ITRI), EnerNoc (ENOC)
* Energy Efficient Buildings: Owens Corning (OC), Baldor Electric (BEZ), ICF International (ICFI)
* Water: TetraTech (TTEK), Northwest Pipe (NWPX)

The following is The State of Green Investing 2009 Table of Contents:

The Green Investment Landscape
News Highlights
Insider Views on the Cleantech Stimulus
Cleantech Stimulus Worldwide
Updates on Green Industry Sectors
The Techie Perspective on the Stock Market
Interview: Analysis of Market Conditions
Stock Highlights

The Report can be purchased as part of a subscription to Progressive Investor or separately for $89.  Progressive Investor is a monthly newsletter that guides investors and analysts toward green investments. Published by SustainableBusiness.com, it covers all green business sectors, including renewable energy, green building and healthy lifestyle.  You can read an excerpt of the Report on SustainableBusiness.com.  It is an in-depth interview with Patrick McVeigh, president of Reynders, McVeigh Capital Management, a green/social portfolio management firm. Progressive Investor talked with him about his impression of market conditions, the impact of the stimulus plan on cleantech, and how they are managing porfolios under these circumstances.  You can also read the sample article, The Green Investment Landscape.

© 2009, Tracey de Morsella. All rights reserved. Do not republish.

Shortlink:

Protected by Copyscape Duplicate Content Finder
Posted by Filed under Green Investment. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
Line Break

Author: Tracey de Morsella (323 Articles)

Tracey de Morsella started her career working as an editor for US Technology Magazine. She used that experience to launch Delaware Valley Network, a publication for professionals in the Greater Philadelphia area. Years later, she used the contacts and resources she acquired to work in executive search specializing in technical and diversity recruitment. She has conducted recruitment training seminars for Wachovia Bank, the Department of Interior and the US Postal Service. During this time, she also created a diversity portal called The Multicultural Advantage and published the Diversity Recruitment Advertising Toolkit, a directory of recruiting resources for human resources professionals. Her career and recruitment articles have appeared in numerous publications and web portals including Woman Engineer Magazine, Monster.com, About.com Job Search Channel, Workplace Diversity Magazine, Society for Human Resource Management web site, NSBE Engineering Magazine, HR.com, and Human Resource Consultants Association Newsletter. Her work with technology professionals drew her to pursuing training and work in web development, which led to a stint at Merrill Lynch as an Intranet Manager. In March, she decided to combine her technical and career management expertise with her passion for the environment, and with her husband, launched The Green Economy Post, a blog providing green career information and covering the impact of the environment, sustainable building, cleantech and renewable energy on the US economy. Her sustainability articles have appeared on Industrial Maintenance & Plant Operation, Chem.Info,FastCompany and CleanTechies.

  • Pingback: Sustainable Business Releases The State of Green Investing 2009 · MutualFunds.ExplainedOnline.Net

  • Pingback: Sustainable Business Releases The State of Green Investing 2009 … | GREEN-2009 BLOG

  • Shirah

    “The optimism professional investors show in this survey demonstrates that despite the financial crisis and economic recession, investment momentum is growing to bridge the financing gap – institutional investors provide crucial long-term global financing for industries that mitigate climate change. (Survey conducted by New Energy Finance and DB Climate Change Advisors, Deutsche Bank’s climate change investment business).”

    This is wonderful news! I am sure as more money goes into the investing of green products and services our country will grow closer to having both a more stable economy (due to a higher consumer confidence level) and greater resources to combating one of the major issues in our world today: Global climate change.

    As more green companies receive more backing on the federal level, universities and sites of learning will become even more essential in the dispersion of valuable solutions such as sustainable business and ecological design. One such university, The Institute of Global Sustainability at the University of Vermont, (http://learn.uvm.edu/igs/ ) has many programs that teach citizens, students and social entrepreneurs how to maximize their potential in such a vital area of business management.

  • http://www.greenstarae.com Nancy A.

    I agree with Shirah in that we need investor financing for the companies creating Alternative Energy to begin to stabilize our economy as jobs are being created. We also need to seize the Alternative Energy opportunities today for a greater tomorrow.

    Green Star Alternative Energy is one of the companies that are creating projects to provide clean energy on a global Level.
    http://www.greenstarae.com