Duncan Stewart: Green investing and ... electrons
- November 9, 2007 10:11 AM |
- By Michael Hlinka
Money Talks is a collection of daily columns from The Business Network, which airs weekday mornings on CBC Radio One at 5:45 a.m. ET (6:15 a.m. ET in N.L.).
By Duncan Stewart, director at Deloitte Canada Research in Toronto
(Listen to the original audio)
The mandate of this column is that we're supposed to be looking at green investing. Green is an awfully big area. Which subsector actually offers the most potential for investors? As I've talked before, it can really be divided into four areas. Earth, air, water and energy. And that's sort of the whole environment of green possible investing.
The only problem is that if you think about it, the expressions that we use all the time, expressions like cheap as dirt, spend like water and free as the air gives you some idea of the monetary value that people attach to the first three of these environmental areas. I'm not saying it's not important to clean up our air, to clean up our water, to clean up poisoned soil. But when you look at the economic value of those areas - as important as they may be as intangibles - that may not be where the money is.
So what I did was I thought about it and I said anything to do with the energy area, especially if it has to do with electrons, is probably the single biggest area for investors today. And that's all sorts of things that you can do with electrons. You can make them with solar power cells, you can store them in batteries, you can transport them across the electrical grid. Or you can use less of them through various energy conservation areas.
And if I look at the Deloitte green 15 awards that we gave out just earlier this year, 12 of the 15 companies actually cared about electrons. And it seems that over and over again, that is the most important part of the market for green investors, that's where most of the money is being made. As a matter of fact, in the third quarter alone according to the clean technology conference that was just held here in Toronto $1.7 billion was invested in venture capital in the third quarter alone. And of that, 92 per cent was invested in green energy.
The whole environmental investing movement occcasionally gets kind of put down as "Gee, that's kind of a hippy, dippy thing and shouldn't you guys go back to the 1960s." But when I look at the fact that $1.5 billion was just invested in the energy area and that this index is up over 35 per cent over the last year, it all of a sudden occurs to me that that 1968 slogan of: "Power to the People, right on" ...may actually be appropriate for green investing as well as flower power.
-- Duncan Stewart
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