In Business, Creating Sustainable Enterprises & Communities

GREEN INVESTING

In Business, November-December, 2005, Vol. 27, No. 6, p. 10

The environmental industry is about to take off as more investors realize they can reap great returns from cleaner technologies.

Jerome Goldstein

AS REPORTED in this issue of In Business (see section about biofuels as petroleum alternatives), new companies are turning all kinds of feedstocks into green products that cover the market from biodiesel to home furnishings and more. The pace of change is speeding up, every year it seems, since we launched this publication in 1978. “The environmental industry is about to take off as more investors realize they can reap returns from cleaner technologies,” says a director at Ceres, a coalition of investors and environmental organizations. The California Public Employees Retirement System is investing $200 million in what it calls the “burgeoning environmental technology sector.” The Investor Network on Climate Risk will be investing $1 billion in companies with green products. From new power generators to improved natural feedstocks, investors are “looking at their portfolios to see where they can make substitutions.” These firms, for example, are looking for sustainable ways to keep usable materials out of landfills, use living plants to absorb carbon dioxide emissions, clean up contaminated waste and soils, use more recycled materials in new construction, and generate renewable power from organic wastes.
An article in The New York Times (11/22/05) - by Claudia H. Deutsch - about innovative green companies opens with a reference to growing sales of compostable plastic made from corn sugars in place of petroleum. It's another example of progress in ecoproduct sales. This year, natural food supermarkets such as Wild Oats Markets and other retailers and food suppliers, are “embracing” compostable packaging for fresh produce. Sales at NatureWorks - a Cargill, Inc. subsidiary that makes the plastic - grew 200 percent in the first half of the year over the period last year. “We're competitive with petrochemicals,” adds Kathleen Bader, chairwoman of NatureWorks.
The big investment banking firm - Goldman Sachs Group with 24,000 employees - announced last week that it would “encourage clients in environmentally sensitive areas to use appropriate safeguards.” The company said at the same time that it would invest $1 billion in projects that generate energy from sources other than oil and gas, wrote Deutsch in a second article. And it strongly endorsed stringent federal regulation. Goldman Sachs added that it would establish a Center for Environmental Markets to study how the free-market system can solve environmental problems.
As noted in the previous issue of In Business, natural resources are being increasingly perceived as basic to economic frameworks as is labor and capital. Economists are using their skills not only to track inflation or interest rates but to rescue rivers and trees. Writes The Wall Street Journal: “Green economists use economic arguments and systems to persuade companies to clean up pollution and to help conserve natural areas. ... Working at dozens of advocacy groups and a myriad of state and federal agencies, they are helping to formulate the intellectual framework behind approaches to protecting endangered species, reducing pollution, and preventing climate change.”
Since 2001, the San Francisco-based Rainforest Action Network has persuaded J.P. Morgan Chase & Co., Citigroup Inc. and Bank of America Corp. to account for pollution costs in their loan underwriting process. Adds Michael Brune, Network director: “Companies are looking for certainty and stability. They can do that by investing in sustainable energy, where they don't run the risk of lawsuits, federal regulation or the reputation of being associated with environmentally controversial projects.”
GENERAL ELECTRIC CHIEF SEES BIG MARKET FOR GREEN BIOENERGY PRODUCTS
The Chief Executive of General Electric urged the U.S. government to develop a clear energy policy, and impose controls on carbon emissions to fight global warming. Jeffrey Immelt announced his company's new corporate strategy, increasing the number of products marketed to an environmentally conscious world marketplace following a year's planning on its “ecomagination” initiative. GE intends to double its research budget for energy and environmental technologies to $1.5 billion, forecasting revenues of $20 billion by 2010.
Over the next seven years, Immelt pledged that the company's energy efficiency would improve by 30 percent and its worldwide greenhouse emissions would decrease by one percent - noting that they would have increased by 40 percent otherwise. Based on information in a New York Times article, the ecomagination initiative comprises 17 technologies that include developments like its H System: gas turbine, and hybrid railroad locomotive.
Another breakthrough stressed is a cleaner coal-burning system with gasification that produces more electricity and allows much easier cleanup of sulfur, mercury and particulates. “If you look to the future, there is going to be a day when we have standards of some kind pertaining to carbon,” Immelt declared. “I think most business people are planning for that implicitly, even without anything that's overt.” Immelt pledged to work with General Electric's customers and provide “the financing that supports development and application of new technologies.”
Immelt runs the biggest company in America, leading some activists in the global warming debate to view his comments as a major turning point on climate change. He believes mandatory controls on emissions of carbon dioxide, the main greenhouse gas, are inevitable. He would double GE investments in energy and environmental technologies to reach a global market for products that help other companies reduce emissions of greenhouse gases.
“We plan to make money doing this,” Immelt stressed. “Increasingly, for business, green is green. ... We will establish partnerships with our customers to tackle their most pressing environmental challenges, while developing products and services they need. These technologies will be used to improve our own energy efficiency and environmental performance.”
Summed up Jonathan Lash of the World Resources Institute: “This is a hugely important step by one of the world's most important companies.”
GREEN HOTELS GETTING MORE POPULAR … AND WORTHWHILE
An article by Judith Stock on green hotels in North America in a recent National Wildlife issue describes these places as examples of what you can look for in future trips: San Francisco, California/Hotel Triton - Uses organic products whenever possible, cleans rooms without chemicals and reduces solid waste, energy and water consumption; Austin, Texas/Habitat Suites - Installed 108 solar panels on six roof surfaces; Toronto, Canada/ Fairmont Royal York - Completed energy-efficient heating and air conditioning retrofit, also has a rooftop organic garden; Grand Teton, Wyoming/ Lodge - Reducing impact on National Park, hotel gets up to four percent of power from wind, maintains in-room recycling program and resource conservation. For more hotel listings, Stock suggests contacting the Green Hotels Association in Houston and visiting: www.greenhotels.com.
MAKING ROOFTOP PHOTOVOLTAIC SOLAR CONCENTRATORS
Currently developing a low-cost rooftop photovoltaic solar concentrator system, Energy Innovations, Inc. of Pasadena, California, recently received $16.5 million in new venture funding. The round was led by MDV-Mohr Davidow Ventures, based in Menlo Park, California, with additional participation from founding investor, Idealab, also based in Pasadena. The new funds will be used to further the company's sales and product development initiatives and for company operations.
“Clean energy technologies will provide a vital foundation for 21st century economies, and we were greatly impressed with the potential we saw in Energy Innovations,” said MDV General Partner Erik Straser, who will join the Energy Innovations board of directors. “They have made some important breakthroughs that have the potential to drive down the cost of solar electricity, and we look forward to working with them on commercializing these new technologies.”
“MDV's history of backing fundamentally important technology companies will help us accelerate our growth and customer reach,” said Andrew Beebe, president of Energy Innovations. “We've got a long road ahead of us, and it's great to have MDV by our side. As important as the financial backing, we value MDV's knowledge and industry depth, and we look forward to their guidance as we attempt to meet the needs of the thousands of businesses and institutions looking for cost-effective renewable power.”
Energy Innovations is developing a new low-cost rooftop solar system, called the Sunflower. Each Sunflower module is composed of an array of mirrors that track the sun throughout the day and year, concentrating its light onto a small panel of PV cells that generate electricity. By replacing large amounts of very expensive, silicon-based PV cells with inexpensive mirrors, Energy Innovations expects to drive down the cost of solar electricity by half or more.
For more details, visit www.energyinnovations.com.
CLEANTECH FIRMS SEEKING VENTURE CAPITAL
Eight CEOs of innovative green companies participated in a Cleantech venture capital forum arranged by SJF Ventures and Deutsche Bank in New York City. According to David Kirkpatrick of SJF, investments in these kinds of companies totaled $1.2 billion in 2004. Companies presenting at the meeting held in mid-September of 2005 were:
Under the Canopy, Boca Raton, Florida - Providing the $165 billion U.S. women's apparel market with fashionable, hip clothing that is made from organic fiber, with distribution at premium outlets nationwide. www.underthecanopy.com.
Green Apple Cleaners, New York City, New York - Offering nontoxic CO2 based dry cleaning in the $1 billion New York market as an alterative to the currently used perchloroethylene, hydrocarbon and silicone methods which are known carcinogens and ground water contaminants. www.greenapplecleaners.com.
IceStone, Brooklyn, New York - Producing beautiful countertops made from recycled glass with no VOCs for the $12 billion countertop market. www.icestone.biz.
Recycle Bank, Philadelphia, Pennsylvania - Utilizing a proprietary technology that identifies how much a home recycles and then pays the home for the amount recycled. www.recyclebank.com.
EvCo Research, Atlanta, Georgia - Providing paperboard coatings made from recycled plastic that replace nonrecyclable wax cardboard, with potential savings at U.S. grocery stores of $500 million annually in landfill disposal fees. www.evcoresearch.com.
Gaia Power, New York City, New York - Producing “powertowers” which offer solutions to unreliable and high cost electric service - including back up, power quality, peak demand charge reduction - while also integrating with renewable and fuel cell systems. www.gaiapowertech.com.
B. B. Hobbs, Darlington, South Carolina - Implementing engineered irrigation and fertilizer systems that increase yields and reduce input costs and run-off for large farms. www.bbhobbs.com.
GreenOrder, New York City - Providing large corporations with strategy and marketing solutions to maximize their return on investment in sustainability. www.greenorder.com.