You know the story: Ebenezer Scrooge fell into a restless sleep one night, with ghostly apparitions and unwelcome visitors ensuing. He woke up to a new day, overjoyed just to be alive; there was still time to right some wrongs and make a difference.
Just like Scrooge’s fateful night, maybe the energy crisis is a wakeup call. After all, the oceans have absorbed 50 percent of the carbon dioxide we have blown into the air in recent years—900 tons of carbon fuel each second to be exact. Maybe we are quickly approaching the point of no return. If we are, the results could be devastating. The good news is that much of the carbon dioxide is near the surface. The ocean still has vast capacity to absorb even more. But that doesn’t make the potential for catastrophic impact any less real.
We didn’t start out to endanger the planet on purpose. Industry didn’t leave us much choice. But we can’t totally blame industry. Factories and power plants were conceived long before anyone understood Earth’s ecosystem. Even now, it’s naive to expect people to tighten their belts, turn down the thermostat or lower their standard of living. Green activists have failed to move the public to action. The solutions to environmental problems simply aren’t appealing.
A new green movement is taking shape; one that embraces environmental concern over worn-out answers. A new generation of green philanthropists is creating solutions in the belief that business can be a vehicle for change. Socially responsible investing (SRI) isn’t new. Thirty years ago, minsters and counterculture activists made sometimes questionable emotional investments hoping to make a positive difference in the world. However appealing that may have seemed, the investment in so-called green companies has drawn fire from critics who claim social investors put too much into risky ventures.
Socially responsible investing—or more politically correct these days, socially conscious investing—started out as a protest in the early 1980s primarily against investing in South Africa during apartheid. In the 1990s, Harvard Business School professor Michael Porter suggested that better corporate performance in one area of social concern, the environment, could actually enhance corporate “competitiveness.”
Some planners who do SRI for clients think that socially conscious investing hurts performance. They might shave anywhere from 1 to 3 percent off returns they would have gotten without the constraints. It used to be on Wall Street that you couldn’t make money in SRI, but it’s since been proven that you can. Socially screened assets now account for one in 10 dollars in professionally managed accounts.
Most American investors think that socially responsible mutual funds contribute to better corporate behavior by keeping companies more honest and influencing them to make safer products. Knowing that a company is rated higher in terms of its social performance would make 71 percent of Americans more likely to invest in that company, and 77 percent of Americans would purchase more of their products and services. Many investors are not familiar with the concept of socially conscious, or socially responsible, investing. They talk about being concerned about certain issues in their lives, and when they find out that those issues are in opposition to what they own, they begin to take a closer look. Seven out of 10 U.S. mutual fund investors now want their mutual funds to support global warming shareholder resolutions. The greatest problem you have is diversification.
Without sacrificing profits for values, responsible companies around the world are making a difference. Organizations like the Business Roundtable—an association of bluechip CEOs—are leading the way by creating synergies between environmental stewardship, social improvement and bottom-line performance. Roundtable green philanthropy is best known for its SEE Change environmental initiative. SEE is making sustainable growth a concentrated focus for companies in every sector of the economy. Partner companies include Coca-Cola, Dow, Eastman Kodak, General Electric, Procter & Gamble, Weyerhaeuser and Xerox. The purpose of the initiative is to engage in projects that improve water quality, quantity and availability.
Levi Strauss Chairman and Chief Executive Robert Haas said, “The organization needs to be an ethical creature—an organism capable of both reaping profits and making the world a better place to live.”
North American venture capitalists invest more than $1.6 billion in clean technology companies each year. Recent innovations have made it easier to make products such as ethanol and solar panels on a large scale. In Brazil, flex-fuel vehicles (FFVs) that burn either ethanol or gasoline are surging in popularity. Ethanol production in Brazil relies on sugarcane crops that largely aren’t needed for the local eating supply.
American venture capitalists have invested millions in ethanol plants and factories for making fuel from other organic sources, such as biomass, which is waste from animals and other organisms. They hope to capitalize on the growing worldwide demand for energy at a time of rising energy costs. Venture capital investing has grown from a small investment pool in the 1960s to a mainstream asset class that is a viable and significant part of the institutional and corporate investment portfolio. Venture firms come in various sizes, from small-seed specialist firms of only a few million dollars under management, to firms with more than a billion dollars in invested capital around the world. The common denominator in all of these types of venture investing is that the venture capitalist is not a passive investor, but has an active and vested interest in guiding, leading and growing the companies they have in which they have invested.
Green venture philanthropists are looking for alternative energy sources like wind and solar. But these forms of power aren’t expected to replace big baseload plants anytime soon. Nuclear energy is considered by many as a viable substitute to hydroelectricity, even among thoughtful environmentalists who see anti-nuclearism as counterproductive.
Leading academic institutions in 25 countries have formed a partnership called the World Nuclear University to build standards for a globalizing nuclear profession.
In lieu of widespread nuclear energy, photovoltaic cells are likely to provide the nation with a significant portion of future electrical energy. Japan generates half of the solar power supply in the world. Japan builds nearly half of the new solar energy equipment sold, and has installed five times as much new solar power capacity as the United States. Water is still the power source of choice but hydroelectric resources are built to capacity. The problem is, hydroelectric plants require reservoirs that can endanger the environment. Sometimes dams can fail; when they do, the disastrous result is ecosystem loss of life and property.
Bullfrog Power, Ontario’s first 100-percent green electricity retailer, is the first and only 100-percent green electricity retailer in Ontario sourcing power exclusively from wind and low-impact hydrogenerators.
RBC, a recognized global leader in sustainable business practices, chose Bullfrog Power for several key greater Toronto area locations as part of its ongoing commitment to reducing environmental impact through supporting renewable energy sources instead of fossil fuels. RBC was among the first financial institutions in Canada to purchase green power, and is active in financing companies in Canada and internationally in the alternative energy sector. Electricity generation is the largest industrial source of air pollution in Ontario. With the launch of Bullfrog Power, Ontario residents and businesses can now choose to direct their electricity dollars to the production of clean, renewable power from generators that produce no carbon dioxide or smog-inducing emissions.
“RBC believes that sustained economic growth and a healthy environment are inextricably linked. That’s why we continue to take a leading industry role to support and advocate sustainable business practices,” said Chitwant Kohli, vice president, corporate real estate, RBC Financial Group. “The decision to switch seven of our GTA branches to become Bullfrog-powered forms part of our goal to reduce energy usage and emissions across our operations. This goal will be achieved through a combination of conservation and energy efficiency measures and the sourcing of clean renewable energy like Bullfrog Power.”
Maybe we have a chance to make it all right after all.
Dennis Walsh has worked for companies such as Levi Strauss and Indy Racing. He has a great interest in environmental issues and the history behind them. He can be reached at firstname.lastname@example.org.