Even a year gone since the failure of Lehman, fundamental questions remain regarding the core underlying assumptions of our financial system. Though currently derivatives trading and black boxes appear out of favour, what will replace them in terms of helpful and productive uses of capital still has yet to be determined. This question was what the Conference on Social Capital Market’s, or SoCap09 tried to give some structure to; while the trend towards sustainable investments and long-term ROI seems to have taken the place of actively managed funds seeking 20x returns.

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What if you call your HR department or brokerage firm and discover you don’t have SRI options available with your 401(k)?  Does that mean you can’t be a socially responsible investor?  Of course not.  If you own shares in a company, you have partial ownership and certain privileges.  Corporations mail out their annual reports containing proxy statements and voting forms.  With our votes, we have the ability to help shape sustainable business in corporate America.  We can be shareholder advocates.

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When you disagree with a company’s sustainable or lack of sustainable business practices, what do you do?  You contact the company.  You sign a petition.  You boycott their products.  You inspired others to “vote with their feet” or “vote with their dollars.”  You pride yourself in the fact that you don’t shop at Walmart or eat at McDonalds.  You are using your “consumer dollars” to send a strong message to corporate America, but what about your “investing dollars”?  When it comes to 401(k)s, mutual funds and the stock market, do you know where your money goes?

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A bridge is about to open up that will make things easier but safer for people who want make their investments consistent with their values.

Just like a bridge makes traveling between two islands easier, the new rating system to be unveiled at Socap09 will be like taking a train instead of having to paddle through choppy waters.

The bridge, called GIIRS, is being built for people who are trying to make sure their investments have a positive social and environmental impact while they also try to earn a financial return. It’s a tool that makes it easier, safer and clearer for those investors who want to make a difference.

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John Willoner’s Eco-House at Findhorn (UK). Turf roof, passive solar, solar panel.

“Is it possible to affect the environment?”

That was one of the questions that confronted me on one on-line questionnaire I took over a year ago.

As a naturalist and former instructor of natural science and ecology (grades 1 – 9), I found this questions to be the most provocative of all. My initial response took the form of another question: How do you mean–positively or negatively? From the radical environmental perspective, all we can do is have a negative impact on the ecology/biosphere–just by existing as we do.

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As stimulus funding leads some industry insiders to think of Washington as “the new Wall Street” for green energy, some investment experts say they’re concerned about the government’s new role. “I worry about the government as a dealmaker in this space,” said Tom Bratkovitch, director of LP Capital Advisors, a consulting firm for private-equity investors, at a Thomson Reuters conference in Palo Alto, Calif., this week. “I just don’t know if the government is the best one to make decisions in this space.”

After all, the federal government has supported some technologies that have not panned out, while missing some that have ultimately been successful. The government also has a reputation for moving slowly – though the Department of Energy certainly is trying hard to get stimulus money out as quickly as possible – and the applications for the grants and loan guarantees can be extremely time-consuming.

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In other words, it’s still down from last year, but deals are still happening and money is still available, he said. “The amount of investment is not continuing to plummet; it’s stable,” Kachan said. “Some might say we’ve reached bottom.”

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Market Facilitation in Ecosystem Services; Contemporary Developing Cases in the UK

Is there reason to believe that there maybe profit to be made by investing in eco investments while conserving the environment?

There does exist some scepticism about the market’s involvement in green initiatives. Even though research conducted by Frost & Sullivan about the telecom industry, which is yet to be published, next month (but was mentioned in The Guardian in late April) apparently shows that there is no measurable link between a company’s share price and investments in green initiatives. However, if pursued they could reflect an improved brand value for a company with an environmental focus.

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Governments across the world must commit to hundreds of billions of pounds in green investments within months in a combined attack on the global economic crisis and global warming, according to leading economists including Nicholas Stern.

The team says some $400bn (£277bn) should be channelled to support low-carbon technologies such as home insulation and renewable energy. Given the urgency of both the economic and climate crises, it wants the green investment made by this summer and to total 20% of the £1.4tn likely to be spent globally as fiscal stimulus.

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Think Globally - Act Locally.

Green Municipal Bonds offer the opportunity to rescue the economy and the environment.  Local governments are needlessly watching their economies disintegrate, waiting and begging for handouts from Washington D.C., while all along the power to save their economies and help the environment lies in their hands - Green Municipal Bonds.

Traditional Municipal Bonds are debts issued by local governments to pay for schools, hospitals, mass transit, and many other projects that benefit local communities.  Citizens vote to approve a bond investment, agree to pay a property or sales tax to fund the bond measure, and the bonds are then sold to investors to raise the capital for the project.  Municipal Bonds are very similar to U.S. Government Treasury Bonds.  Both offer investors relatively safe investment vehicles with special tax advantages.

Green Municipal Bonds, are similar to their traditional cousins, they offer relatively safe investments with special tax advantages.  However, their are several differences that make Green Municipal Bonds far superior for the taxpayer, investor, and issuing local governments.

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“Well we’ve had to get the credit system partially fixed in order for the economy to have a chance of starting to turn around. But there’s no magic bullet on this,” he said. “They’re going to throw everything from the government they can in. As I said, the Treasury is going all in, the Fed and they have to and that isn’t necessarily going to produce anything dramatic in the short term at all. Over time the American economy is going to work fine.”

Several times during the interview, Buffet spoke about devoting every resource to fixing the economy.

“All you know is you throw everything at it and whether it’s more effective if you’re fighting a fire to be concentrating the water flow on this part or that part. You’re going to use every weapon you have in fighting it. And people, they do not know exactly what the effects are,” he said. “Economists like to talk about it, but in the end they’ve been very, very wrong and most of them in recent years on this. We don’t know the perfect answers on it.”

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]]> http://inspiredeconomist.com/2009/01/23/buffet-nbr-jan09/feed/ http://inspiredeconomist.com/2009/01/22/warren-buffett-talks-about-the-economy-on-nightly-business-reports-30th-anniversary-show/ http://inspiredeconomist.com/2009/01/22/warren-buffett-talks-about-the-economy-on-nightly-business-reports-30th-anniversary-show/#comments Thu, 22 Jan 2009 20:22:27 +0000 Reenita Malhotra http://inspiredeconomist.com/2009/01/22/warren-buffett-talks-about-the-economy-on-nightly-business-reports-30th-anniversary-show/

Warren Buffett, the chairman of Berkshire Hathaway says that President Obama’s #1 job is to fix is the economy but even though we have “got the right person in the operating room, but it doesn’t mean the patient is going to leave the hospital tomorrow.”

In an exclusive interview with PBS’s Nightly Business Report, Warren Buffett tells anchor Susie Gharib, that America was in an “economic Pearl harbor” last September, that went for a nosedive after October 1st  2008.

According to Buffett, America’s credit system must be partially fixed in order for the economy to have a chance of starting to turn around. But whether a fiscal stimulus is going to do this, or whether tax cuts will provide the answer, nobody seems to really know.  Certainly not the economists! Buffett believes that when it comes to economics you can’t just do one thing and where the balance is struck on that will be a political question.

PBS airs a fascinating interview with America’s economic guru, Warren Buffett tonight to commemorate the 30th anniversary of Nightly Business Report.  Buffett shares his views on the newly inaugurated President Obama, the recession, his company Berkshire Hathaway, the Madoff scandal and his investing principles vis-a-vis a gloomy and uncertain economic outlook.

Make sure you tune into Nightly Business Report tonight – January 22nd 2008 at your local PBS station. Check here for local listings.

If you miss the interview for some reason, then check back here tomorrow for a link to the interview online.

Image credit: Fickr (Peter Duhon)

]]> http://inspiredeconomist.com/2009/01/22/warren-buffett-talks-about-the-economy-on-nightly-business-reports-30th-anniversary-show/feed/ http://inspiredeconomist.com/2009/01/19/martin-luther-king-on-socially-responsible-investing/ http://inspiredeconomist.com/2009/01/19/martin-luther-king-on-socially-responsible-investing/#comments Mon, 19 Jan 2009 20:07:56 +0000 Ramsay Mameesh http://inspiredeconomist.com/2009/01/19/martin-luther-king-on-socially-responsible-investing/

“tell your neighbors not to buy Coca-Cola in Memphis. Go by and tell them not to buy Sealtest milk. Tell them not to buy–what is the other bread?–Wonder Bread.”  Martin Luther King told the parishoners of Bishop Charles Mason Temple in Memphis, Tennessee, the Sunday before his assasination.

Martin Luther King is remembered today, even more so this year with Barack Obama’s inauguration, as the leader of the voting rights movement.  However, it is forgotten that Martin Luther King, at the time of his assasination, was proposing to create a collective financial hammer to promote his social and economic agenda.

“Now we are poor people, individually, we are poor when you compare us with white society in America…”We have an annual income of more than thirty billion dollars a year, which is more than all of the exports of the United States, and more than the national budget of Canada. Did you know that? That’s power right there, if we know how to pool it.”    And Socially Responsible Investing was born.

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]]> http://inspiredeconomist.com/2009/01/19/martin-luther-king-on-socially-responsible-investing/feed/ http://inspiredeconomist.com/2008/12/22/madoff-greatest-ponzi-scheme-real-estate-magnitudes-greater/ http://inspiredeconomist.com/2008/12/22/madoff-greatest-ponzi-scheme-real-estate-magnitudes-greater/#comments Mon, 22 Dec 2008 21:50:44 +0000 Fred Etcheverry http://inspiredeconomist.com/2008/12/22/madoff-greatest-ponzi-scheme-real-estate-magnitudes-greater/ Bernard Madoff was arrested December 12, 2008 for an alleged $50 billion investor fraud and released on $10 million bail. While the press heralds this as the biggest ponzi scheme in history, it’s a pittance compared to the real estate schemes that have created the present financial crisis.

Like Madoff’s scheme, the house market became dependent on a steady price increase. Buyers were willing to pay high prices with the expectation that they could later sell for a profit.

Eventually, without substantial inflation, houses had to become unaffordable. House prices had reached levels that often required most of a household’s income. Subprimes were just a frantic attempt to continue this pyramid. Like every ponzi scheme, some means must be found to get more money from new “investors” to payoff old.

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]]> http://inspiredeconomist.com/2008/12/22/madoff-greatest-ponzi-scheme-real-estate-magnitudes-greater/feed/ http://inspiredeconomist.com/2008/10/27/mr-buffetts-buying-american-how-about-you/ http://inspiredeconomist.com/2008/10/27/mr-buffetts-buying-american-how-about-you/#comments Mon, 27 Oct 2008 20:17:59 +0000 John-Paul Maxfield http://inspiredeconomist.com/2008/10/27/mr-buffetts-buying-american-how-about-you/ The economy is in crisis, unemployment is on the rise, and there is a general feeling of fear in the market.  Where some see despair, Warren Buffett sees opportunity. 

In a recent Op-Piece in the New York Times, Mr. Buffett explains his reasons for investing in US Equities and urges others to do the same.  He encourages investors to “be fearful when others are greedy, and be greedy when others are fearful.”  Warren may be speaking from the perspective of a patriot, but he is also a pretty darn savvy investor, consistently ranking among the richest people in the world.  He acknowledges that “people have a right to be wary of highly leveraged entities or businesses in weak competitive positions.  But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

If Warren’s betting on the US Economy, deal me in. 

Check out the rest of the article, on top of being an incredible investor, he is also a witty writer.  It is well worth the read. 

Photo Credit: By Photo Credit: One Trick Pony in FlickR’s via Flickr’s Media Commons

]]> http://inspiredeconomist.com/2008/10/27/mr-buffetts-buying-american-how-about-you/feed/ http://inspiredeconomist.com/2008/09/30/is-your-money-safe-where-it-is-what-about-green-stocks/ http://inspiredeconomist.com/2008/09/30/is-your-money-safe-where-it-is-what-about-green-stocks/#comments Tue, 30 Sep 2008 05:43:45 +0000 Reenita Malhotra http://inspiredeconomist.com/2008/09/30/is-your-money-safe-where-it-is-what-about-green-stocks/ Everyone is petrified of losing money in this crazy whirlwind of stock market yo-yo-ing lately. The fall of Lehman brothers has offset a downward spiral not just for financial stocks, but for stocks in general. The Dow Jones dropped 777 points today, creating a historical record.

The good news is that according to Ron Lieber, NYTimes money guru, some investments might just be safe. “Banks like HSBC Direct and Capital One are offering online savings accounts paying more than 3 percent,” says Lieber. “These accounts have all the normal Federal Deposit Insurance Corporation protections of at least $100,000. Also, the Treasury Department is currently insuring investors who had holdings in money market mutual funds as of Sept. 19, as long as the fund company pays to participate.” (NYTimes.com: Your Money, September 29 2008)

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]]> http://inspiredeconomist.com/2008/09/30/is-your-money-safe-where-it-is-what-about-green-stocks/feed/ http://inspiredeconomist.com/2008/09/23/from-mortgage-to-bailout-how-did-the-problem-arise/ http://inspiredeconomist.com/2008/09/23/from-mortgage-to-bailout-how-did-the-problem-arise/#comments Tue, 23 Sep 2008 17:40:05 +0000 Reenita Malhotra http://inspiredeconomist.com/2008/09/23/from-mortgage-to-bailout-how-did-the-problem-arise/ As the government begins to unleash a highly criticized bailout plan for Wall Street’s toxic mortgage backed assets, it is worth taking a step back to understand how the problem actually arose.

Investing In Real Estate

It all started with real estate investing which involves the purchase, ownership and sale of real estate for profit. Real estate is an asset form with limited liquidity relative to other investments, it is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. The primary cause of investment failure for real estate is that the investor goes into negative cash flow for a period of time that is not sustainable, often forcing them to resell the property at a loss or go into insolvency.

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]]> http://inspiredeconomist.com/2008/09/23/from-mortgage-to-bailout-how-did-the-problem-arise/feed/ http://inspiredeconomist.com/2008/08/26/bank-of-america-how-green-is-their-green/ http://inspiredeconomist.com/2008/08/26/bank-of-america-how-green-is-their-green/#comments Tue, 26 Aug 2008 12:52:33 +0000 Sarah Lozanova http://inspiredeconomist.com/2008/08/26/bank-of-america-how-green-is-their-green/ As the largest consumer and small business bank, BofA (NYSE: BAC) can have a major positive or negative impact on the environment. Since March, 2007, the bank has taken on a $20 billion initiative to “encourage environmentally friendly business activity” over the next decade. Applauded by some and criticized by others, just how green is this bank?

Crystalline Tower Office Building in Manhattan

BofA’s new 2.1 million square foot, 54 story tower is being heralded as the world’s greenest skyscraper. This $1 billion glass, steel, and aluminum skyscraper will use significantly less water and energy, while providing a healthy indoor environment.

It features a passive solar design, the use of recycled and renewable materials, and work stations with individual climate controls. Natural elements include the use of rain water and a green roof reduces energy use for heating and cooling. A graywater system will reuse waste water from sinks to flush toilets. A 4.6 megawatt cogeneration plant will generate heat and electricity.

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]]> http://inspiredeconomist.com/2008/08/26/bank-of-america-how-green-is-their-green/feed/ http://gas2.org/2008/08/06/bp-invests-90-million-in-vereniums-cellulosic-ethanol-technology/ http://gas2.org/2008/08/06/bp-invests-90-million-in-vereniums-cellulosic-ethanol-technology/#comments Wed, 06 Aug 2008 22:11:54 +0000 Nick Chambers http://gas2.org/2008/08/06/bp-invests-90-million-in-vereniums-cellulosic-ethanol-technology/ It seems that BP is trying to make up for lost time — the worldwide oil giant has invested $90 million in cellulosic ethanol company, Verenium. This is BP’s first foray into the world of cellulosic ethanol (ethanol derived from non-food crops), and man is it a gigantic one.

The money will be distributed to Verenium over the next 18 months, with a likelihood of further investment and cooperation beyond that point. Under the agreement, BP will have broad access to Verenium’s research, production facilities, and technology.

Although relatively late to the fray, BP thinks this investment gives them the “most advanced technology for transforming [cellulosic material] to biofuels,” as Sue Ellerbusch, president of BP Biofuels North America said.

Verenium claims to have the edge in cellulosic ethanol production through genetic engineering of the microbes required to turn the cellulosic material (switchgrass, wood chips, sugarcane bagasse, miscanthus) into ethanol.

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]]> http://gas2.org/2008/08/06/bp-invests-90-million-in-vereniums-cellulosic-ethanol-technology/feed/ http://cleantechnica.com/2008/05/09/a-big-week-for-vestas-wind-systems/ http://cleantechnica.com/2008/05/09/a-big-week-for-vestas-wind-systems/#comments Fri, 09 May 2008 20:31:46 +0000 Timothy B. Hurst http://cleantechnica.com/2008/05/09/a-big-week-for-vestas-wind-systems/ Denmark-based Vestas Wind Systems (VWS:DC) had a big week. First, the world’s largest wind turbine manufacturer announced that they would be building a tower manufacturing plant in Colorado. Second, Vestas reported a 94 percent jump in earnings in the first quarter of 2008, as compared to the same period last year.

Although they have yet to disclose the location of the new tower manufacturing facility, it would be situated to complement the company’s fist North American blade manufacturing plant, which recently opened its doors in Windsor, Colorado.

For the tower plant, the company will need a large parcel of land served by freight rail, a combination that Northern Colorado can provide at several locations, including the Windsor location, where construction proceeds on phase two of the blade plant. According to the Northern Colorado Business Review, more than 1,000 new jobs could result from further expansion of Vestas’ manufacturing presence.

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