By Hazel Henderson
As part of the Green Economy series
Ethical Markets Media (USA and Brazil) now reports over $2 trillion invested in the green private sector since 2007 in the 2011 Green Transition Scoreboard® Report. Thus, we call for pension funds to shift 10% of their assets under management (AUM) away from risky hedge funds, dark pools and commodity ETFs into cleaner, green companies. Importantly, the 2011 Report includes news of two key studies from Mercer in New York and WWF/Ecofys/OMA in Amsterdam that buttress our call.
Mercer’s report, Climate Change Scenarios – Implication for Strategic Asset Allocation, upped the ante. Backed by IFC and 14 pensions funds with AUM of some $2 trillion, the report calls for 40% of institutional funds to switch toward “climate-sensitive assets” both for hedging risk and capturing opportunities in low-carbon companies. Mercer’s Craig Metrick told us this huge research effort will be ongoing with annual updates.
Meanwhile, the WWF/Ecofys/OMA report, The Energy Report, shows how the global economy can shift to “100% Renewable Energy by 2050.” We will be further analyzing this expansive report and interviewing their researchers as to exactly how this goal can be reached.
Both studies call for accelerating upfront capital investment so as to scale the green technologies already competing price-wise with fossil fuels and nukes: energy efficiency, wind and solar PV. This is also why we at Ethical Markets Media track these private sector investments and benchmark $1 trillion per year through 2020 to bring them to scale. While capital cost may be higher for some technologies, the fuel is abundant and free. All these studies point out the absurdities of 90% subsidies still given to fossil fuel and nuclear energy, decades after their maturity, while renewables and efficiency receive less than 5%.
Globally, two additional studies now indicate the green transition has reached a tipping point. The Threshold 21 World modeling in “Towards a Green Economy” finds investing $1.3 trillion annually (some 2% of global GDP) over 10 key sectors can kick-start the green transition, reduce poverty and limit wasted resources. The UN Environment Program and World Meteorological Organization issued a summary “Integrated Assessment of Black Carbon and Tropospheric Ozone,” reconfirming what I and many others have stated: the obsessive focus on carbon dioxide (CO2) and its pricing has always been too narrow, and should include soot, VOCs, methane, mercury and other chemicals from fossil fuels harmful to humans and the environment. I have studied atmospheric chemistry since founding Citizens for Clean Air in 1964 and remember the helicopter ride we arranged for Senator Robert F. Kennedy to show him all the sources of air pollution around New York City and how the costs were “externalized” from company balance sheets and national accounts (GDP). Kennedy went on to become our champion and made his famous speech in 1968 at the University of Kansas!
All these systemic reports finally may shift governments, pension funds and companies toward greener policies worldwide.
About Hazel Henderson
Hazel Henderson, D.Sc.Hon., FRSA, founder of Ethical Markets Media, is a futurist and author of award-winning Ethical Markets: Growing the Green Economy. Her editorials are syndicated worldwide by InterPress Service. She leads the Transforming Finance initiative, created the Green Transition Scoreboard® and developed with Calvert Group the systems alternative to GNP, the Calvert-Henderson Quality of Life Indicators. In 2010 she was honored as one of the “Top 100 Thought Leaders in Trustworthy Business Behavior 2010” by Trust Across America.
About the Green Transition
"Good News on the Global Green Transition" is part one of five exploring the sectors driving the Green Transition. Stay tuned for Green Transition Talkback posts on Efficiency and Green Construction, Corporate R&D, the Renewables sector and Consumer Demand, contributed by members of the Green Transition Scoreboard® research team. For more information, please view the associated press release.
Readers: Are we at a tipping point for a Green Transition? What will it take to shift investment? Share your thoughts on Talkback!