Green Investing: Private Capital Wants Aggressive Government Policies

Trillions of Dollars of Private Investment Is Waiting For Government Policies On Green To Invest In It...!I’m fascinated by the evolving relationship between climate change and money- on one level, there is no way that they can be separated. Climate change affects the entire framework of how we experience the Earth, while money is the system by which we gauge value within that framework. No matter what, the environment and money matters are inextricably mixed.

I recently read about Goldman Sachs creating a water index along with GE, to figure out the econoimic and financial impacts of water conditions and climate change on businesses in the coming years. I’ll be interviewing two people this afternoon about how they are developing green testing standards for a variety of industries- green is not just a talking point for what we could do differently, it’s a factor that is popping up as influential in all spheres. As we rebuild our financial world after both the crash and Copenhagen, now is the time to acknowledge and embrace the environment in new and game-changing ways that should and will alter the relationship between the framework and the way we estimate value within that framework.

To that end, global investors want answers. Those representing $13 trillion in assets (whoa!) have said that they will, according to Reuters, “unleash a potential flood of private money into renewable and efficient energy.”

"We are ready and willing to up the ante to finance the transition to a low carbon global economy but you need to have the courage to act," said Mindy Lubber, president of Ceres (an influential group of environmentally minded investors).

So, let’s get to it, folks.

"Without policies that create a stable investment environment our hands are tied," said Anne Stausboll, chief executive of the California Public Employees Retirement System. The system has over $200 billion in assets.

The U.S. is one of the countries without a national approach to cutting emissions and we are clearly one of the de facto leaders in the world for setting the legislation that will move the cause forward. "Until the U.S. Congress passes climate regulation, America will be at a competitive disadvantage in the development of renewable energy and other climate change industries," said Kevin Parker, Deutsche Bank’s head of global asset management. They have well over $600 billion in assets to invest, and they recently showed that renewable energy industry numbers show that those companies outperform others in growth.

The time is ripe and the reasons are many to begin investment in earnest. If private money is going to go into renewable energy, that is where the growth is going to come from. The industry only has room to grow as right now it is niche and small, but there is international momentum and a push for this to be the new standard. The only way that will happen is if nations, like the U.S., set aggressive targets for the investment to push industry to new growth and innovation. And now it is sounding like the money will be there in the private sector- we know that the private entrepreneurs and industry is there, so let’s make it happen overall.

Photo Credit: pfala (via Flickr under CCL)