The Green Machine
Investing In Earth’s Future
Who said it’s not easy being green? Maybe that was true in the ’70s, when the song was written, but today it is easy — and often quite lucrative.

Green technology encompasses a wide array of possibilities: solar power, wind power, hybrid vehicles, and green building materials, just to name a few. It’s hydrogen fuel cells. It’s power-generating carports. It’s everything we hoped the future would be, sans the silver foil jumpsuits.

Besides the obvious cool factor, going green can make you scads of cash — venture capital and other investment opportunities abound. On the flip side, joining the ranks of early adopters may protect the investments you already have, by anticipating the impacts of a stormy future.

Risk management is the name of the game with green. You’ve probably heard of global climate change. It’s the pesky thing that keeps churning out hyperactive hurricanes and threatens to shrink Coronado Island into a mucky bog. Seldom talked about is how it affects investors, and how it might be putting your retirement at risk.

It’s estimated that the combined cost of Hurricanes Katrina and Rita exceeded $54.8 billion. Among the companies that took a drubbing were Coca Cola, Target, McDonalds, and a host of blue-chip utilities. All said, nearly half of S&P 100 companies reported measurable impacts — and shareholders felt the loss.

Whose fault is it? Doesn’t matter, says Robert O’Carroll, of Nexcore Capital. "Regardless of whether you think we’re to blame as the human race, you should be positioning your portfolio to deal with climate change. You want a company that doesn’t have their head in the sand...that’s looking at the changing environment and finding ways to adapt and change."

San Diego is already in the game, jockeying for a position to meet global climate change head-on. Last summer, Mayor Sanders heralded the formation of Cleantech San Diego, a trade association that aims to build a clean technology cluster on par with our existing biotech and IT centers.

Tony Haymet, PhD, director of Scripps Institution of Oceanography, says the initiative hangs out an "open for business" sign for green innovators searching for a place to set up shop.

"It’s a bold attempt to improve our economy," he says. "We’d like to bring clean tech businesses to San Diego, or encourage entrepreneurs that are already here to set up a company."

News like this has some investors salivating. Clean technology is expected to swell to a $156 billion market in the next ten years. Investment capital flowing into renewable energy alone hit a record $100 billion in 2006.

Thanks to the growth of clean tech investing, accredited investors looking to get in on the ground floor should find plenty of opportunities in local start-ups. In fact, Nexcore Capital plans to launch a private equity fund, GreenCore, "built entirely around venture capital opportunities in the renewable energy and green technology sectors," says O’Carroll.

Of course, venture capital is a world of high risk and high returns. If you don’t have room for such speculative adventures in your portfolio, consider playing it safe with a green mutual fund or publicly traded stocks.

If you’d rather cherry pick a few individual stocks, there are a slew of home town heroes to choose from. Kyocera Corp. (KYO), has a local presence and is the world’s second-largest producer of photovoltaic cells. Or, grab Open Energy Corp (OEGY), headquartered in Solana Beach; they serve up cutting edge solar solutions.

Justin Martello of Blue Summit Financial Group specializes in Socially Responsible Investments, or SRIs. This class of mutual fund goes beyond traditional financial analysis — incorporating environmental, social, and corporate governance criteria.

"Smart business and stewardship of the planet go hand in hand," Martello explains. "It’s really about looking at what companies we expect to be the best long-term performers."

Having a financial planner with green expertise can make wading through all the options easier. To date there are over 200 SRIs to choose from, and the number continues to climb. Big hitters include the Winslow Green Growth Fund (ticker: WGGFX), Domini Social Equity (DSEFX), Sierra Club Stock Fund (SCFSX), and a bounty of Calvert funds too numerous to list.

Duane Roth, interim chairman of Cleantech San Diego, has an even easier way to go green — voting with your dollars. "I think that where the community can help is to be an advocate as purchasers," he says.

"If you decide to purchase things that are environmentally friendly, then that creates markets, and that creates financing, and that creates new products."

Martello agrees. "You’re going to save a lot of money as a consumer, but also you’re going to support industries and technology that you believe in. Every dollar that you spend says something about what you really value."
Whether it’s buying Energy Star appliances, solar water heaters, or just going for a good-old-fashioned clothesline, it all translates into measurable savings.

"The more I learn about it, the more I think I’m hurting my pocket by not doing these things," says Haymet. "I’m not making any kind of sacrifice for the planet. I’m actually helping myself by doing the right thing."
— Paul Stuart