Green Investors - will they ever make money?

Green Investors - will they ever make money?

Green and 'make money' in the same sentence, surely not. On one side people often assume green is about giving and not receiving. Making money is about the greed that is the core problem with businesses. On the other side others may assume that going green is expensive and long term and not about to make anyone any profit.

From the start of the industrial revolution, productivity and profit have driven men forward usually at the expense of the environment. Even so many times in the intervening period initiatives have been taken when things have got out of hand, such as the clean air act. Industrialized nations have taken the lead while developing nations just try to play catch-up. Industrialized nations have without doubt pushed their manufacturing onto the developing nations to improve their own environment and largely developed service and consumer based economies. Developing nations have become the powerhouse of growth and now have economies that in size compete with the established industrial nations. The growth potential of these new developing nations is immense considering their vast size and population.

This leads to two significant areas that need a 'sea change' in management:

  • Energy Generation
  • All other Commodities

Taking the first point, energy.

Fossil fuels have been at the heart of energy generation, first coal then oil and gas. Attempts to supplement or replace with nuclear have proven expensive difficult and environmentally damaging. Whilst attempts to develop new nuclear technology is making slow progress, it is not going to fill the gap that is about to develop in the near term. Peak oil is nearly upon us and current estimates of the increasing requirement in a developing world mean a large supply demand gap is about to open that will need to be filled quickly. If this gap opens the only alternative is for the price of fossil fuel energy will inflate and stunt other global growth to slow demand.

Clean-tech energy made from renewable and sustainable sources is already big business. It will grow exponentially. It will grow due to global policies on climate change. It will grow due to national incentives and legislation to protect national energy supplies. Finally it will grow due to regional, local and personal efforts to secure a low cost energy supply. Every man and his dog will be a green investor.

Commodities

Likewise commodities will be stretched as demand increases. While previous generations have squandered the earths resources with little thought to the long term sustainability, future generations will have to focus on recycling and consuming less. A step change in modern life is already under way but still has a long way to go.

Industries based upon these two areas will reap due rewards in the coming decade.