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Will Environmental Investing Succeed In This Economy?

Gina-Marie Cheeseman
| Thursday January 8th, 2009 | 1 Comment

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Clean technology investments in 2007 increased by 41 percent from 2005, totaling $117 billion. Currently, the amount of money invested in ‚Äòsocially responsible’ investment funds is $25.1. One out of every 10 dollars is invested in socially responsible funds. Will the economic crisis slow environmental investment?
The SunTrust Bank surveyed 202 business owners with annual revenue of at least $10 million about environmental philanthropy and investments. An overwhelming majority of survey respondents, 69 percent, said they would maintain their current level of giving even if the economic crisis affects their businesses. Fifty-nine percent believe environmental investments have a rate of return similar to other funds.


Nick Robins, head of HSBC’s Climate Change Centre of Excellence, said environmental investing “provides an agenda for action for purely financially motivated investors eager to mitigate risk and benefit from upside opportunities.” Robins said environmental investing does two things:

  1. “Encompasses” investors who want to “ensure that social and environmental factors are included in the ways they allocate their savings.”
  2. “…draws on the rising tide of institutional investors in pension funds who appreciate the growing financial materiality of environmental, social and governance factors.”

Robins acknowledges the “credit crunch and accelerating economic downturn” which have caused the prices of clean energy stocks to go down, but he says that the “fundamentals underlying sustainable investing remain strong.” What are they? Climate change science and job creation.
“People talk about expensive things like carbon capture and storage and solar, but energy efficiency presents a secure revenue system for investors,” he says.
Robins also spoke about financial markets in general, which he said “do not tell the economic truth and they do not tell the ecological truth.” Robins sees a “major contradiction” in financial markets” because “oil and gas companies are treated as if oil and gas are assets when, in reality, they are carbon liabilities.”
Wells Fargo will continue environmental investing
Wells Fargo & Company announced a few weeks ago that it exceeded $3 billion in environmental financing. It’s original goal was $1 billion, which it achieved two years sooner than expected.
“Our environmentally-focused investments and loans are a significant new area of business for Wells Fargo,” said Barry Neal, director of Environmental Finance. “Over the past three years we’ve focused on renewable energy, resource efficiency, and sustainability in our work with our customers – helping to protect our environment and grow our businesses.”
Wells Fargo’s environmental financing includes:

  1. Over $2 billion for green building projects that meet LEED certification standards
  2. Over $700 million for solar and wind projects across the U.S…which are projected to create enough electricity for 475,000 households
  3. About $500 million for businesses focusing on sustainability
  4. About $50 million for non-profit organizations which seek to improve the environment in low-to-moderate income communities

“Climate change and energy issues require diverse solutions and support from all areas of our society,” said Neal. “We see significant growth potential in all areas related to clean energy, resource efficiency and the environment and are excited about building upon what we have accomplished to date.”


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