Green Investing Comes of Age

By Mark Sanchez | Reprinted from Business Review Western Michigan, May 15, 2008

Financial advisers see green investing as the hot sector right now, as new technologies emerge in the marketplace amid growing demand.

Alternative energy is an area that Mike Pino of Centennial Securities in Grand Rapids sees as ripe for growth, given its relative infancy and “very low” deployment levels around the globe, especially in the United States.

“That’s the next wave of investment potential,” Pino said. “The market here is immense.”

A 24-year financial adviser, Pino believes alternative energy has the potential to bring as much change to society as the Internet has done since the Web emerged into the mainstream in the mid-1990s.

“It’s not as fun and exciting, but as far as common-day life, yeah. We’re going to have a lot of things powered differently,” he said.

Survey and research data show green investing on a definite upswing.

In a January poll by New York-based Allianz Global Investors, nearly half of more than 1,000 investors responding said they likely would invest in a company or mutual fund that aims to provide solutions to environmental problems. Seventeen percent said they already did.

More than seven out of 10 investors in the Allianz poll considered environmental technology a “buy.”

The rising price of oil, growing market demand for green solutions and technological advances are driving the interest in green investing, reports Salem, Mass.-based Cabot Heritage Corp., which formed a green investor advisory earlier this year.

Green investing “promises to create tremendous winners and some spectacular losers as consumers, corporations and investors sort the bad ideas from the good and the green wannabes from the true innovators. In the long run, a confluence of trends means the current green hype isn’t just hot air — in fact, it presents a unique chance for investors to find the next great growth-stock early,” states the Cabot Green Investor’s report, “The Three Trends Compelling Green Investing.”

Venture capital investments in clean technology companies grew 18 percent in the first quarter over a year earlier, to $571.6 million, as overall VC investments declined 7 percent, according to Ernst & Young. Investments in solar power grew 136 percent year over year to $132.4 million.

Driving those investments are market demands and growth potentials.

The publishing company Clean Edge projects the worldwide market for alternative energy—biofuels, fuel cells, solar and wind energy—to post strong growth in the years ahead, from $77.3 billion in 2007 to a projected $254.5 billion by 2017.

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