The first one is a very cool house called the Camouflage House.  Driving around in the country here, you will see greenhouses everywhere.  The Camouflage House takes this important physical component of farming life and combines it with the living quarters.  The result is a very beautiful structure that is less imposing on the natural scenery surrounding it and that gets more than enough natural sunlight.  Considering a greenhouse usually gets enough sunlight to create excessive heat, this house uses Japanese panels and white canvas to help section off parts of the home and reduce undesired heat.

Speaking of heat, one of the other interesting homes I found here was actually just built fairly recently.  This new house is certified as a “passive house,” which basically means that it has much more insulation than usual, extremely high performance windows, and a mechanical ventilation system capable of keeping the inhabitants of the house alive without natural ventilation.  The idea comes from a concept that originated in Germany which would allow a house to be heated by a hairdryer if it was well insulated enough.  Due to this much higher level of insulation, the appliances and occupants can generally create enough heat to heat the home.

To shift the focus more towards investing in green technologies, I also recently came across this article about Panasonic’s plan to shift focus to solar power and other energy saving technologies.  As of the time this article was written, Panasonic was the largest producer of plasma-TVs.  This isn’t too surprising considering, at least to me, Panasonic’s name still connotes consumer electronics.  It is actually this competitive market that drove Panasonic to shift its primary focus to solar.

The change comes in part due to Panasonic’s acquisition of Sanyo, but they plan to add some additional new technologies to the solar power sphere.  The technology discussed in the article will let consumers monitor the energy production and consumption of everything in their home — from their television set.  This already sounds pretty amazing, but interestingly enough Panasonic claims that this technology could be available to consumers as soon as two or three years from now.  It’s hard to say how things will develop with bringing solar power into peoples’ homes, but this is definitely an intriguing technology.  I’m curious if any green investment funds have added Panasonic to their portfolio because of this change.

I hope you enjoyed my first post since coming back and please let me know if there are any specific topics you would like me to look into.  Until then I’ll just be reading up on sustainability and posting the most interesting things here.

Photo Source: Jeremy Levine Design

Basically, a real estate investment trust (REIT) is a similar option to mutual funds, but instead of the portfolio consisting of companies, they consist of real estate.  With how much of a focus is being put into green development (such as through the LEED certification system) this seems to be like another rapidly expanding option.  Like investing in green bonds or other green investments, green REITs help encourage the creation of green buildings by moving more capital into the market.

This is also another way to diversify investments in sustainable technology.  For example, there are various options available to the homeowner in terms of upgrading the house to become environmentally friendly.  If the initial costs of this type of investment are too high, or it is too difficult to choose where the money should be invested, the green REIT offers a method of investing the money in a more diverse portfolio of properties that all meet certain requirements.

This is still very general information at this point, but I just wanted to start with a brief overview of some of the primary types of green investing.  The more I read, the more excitement I see about investing in this market because not only is currently showing some impressive returns (in specific situations of course), but it also contributes to a cause important to a large portion of the world right now.

The benefits of building green buildings has been shown to be both good for the environment as well as for business, so it is difficult to imagine these practices not seeing widespread implementation as the wealth of new companies make them even more accessible.  As with the rest of the green investments it is hard to say how the green real estate investment trusts will behave, but it is definitely another interesting part of the market to keep an eye on; and hopefully they will continue to allow investors to show developers how important sustainable development has become.

Photo Source: Jeremy Levine Design

These funds are a collection of various green investments maintained by the fund manager.  Although some of these funds like the Gabelli SRI Green mutual fund have shown returns of nearly 68%, as discussed in this article, only sixteen of the forty five green mutual funds and exchange traded funds counted by an analyst at Morningstar saw three year returns.  This is a good indication of just how different the investments in this category are performing and how much there still is to learn.  Several of the articles I read pointed to how quickly this market is changing and how much there is for fund managers to keep up with –  new piece of government regulation requiring the implementation of a specific type of technology will send its production sky high, but it is hard to predict the winners and losers.

An example of this is with the Gabelli fund discussed above and in the SmartMoney article.  The fund focuses on LED technology which is dictated by the government through its mandate that incandescent lights be replaced with light-emitting diodes and the consumer through the LEDs use in emerging consumer electronics like the LED television.  For this reason the article goes on to state that the more diverse funds might be the best bet at this point because they don’t rely on the success or failure of one particular technology.  Just like with other financial instruments, the greater volatility causes a greater chance of a big spike, but also of a huge loss.

Reading about these funds has made me realize just how new and unknown the world of green investing is.  It was nice to hear from several of the articles that although there is some concern about the volatility currently seen in so many of them (see green bonds for a less volatile option), there is also reason to believe that they are worth looking into for the long term.  Even if it’s just to keep an eye on how they perform after this initial spike, they seem like an appealing investment option for anyone interested in sustainability.

Photo Source: Olof S

For those who are unfamiliar with a bond, they generally involve an initial investment that pays off an annual percentage until the bond matures and the investor gets his or her initial investment back.  The spin on this that a green bond makes is that the funds created by investors are then only available to companies that meet the necessary restrictions I talked about above.  In addition, these bonds are tax exempt which makes them even more appealing than a normal taxable bond.  These bonds took hold in the United States when a piece of legislation in the early part of the new millennium created sustainable bonds as a means of developing brownfields, encouraging sustainability, and creating green jobs.

As a quick side note, a term that is often associated with green investing is socially responsible investing.  These two concepts have similar roots, but the difference is that green investing targets sustainability in particularly whereas socially responsible investing can be associated with investing practices that include any social factors in the evaluation.  For example, this could mean not investing in companies involved in the tobacco market or choosing to invest in a company that one feels is performing a social good.  On the green side of things, it means avoiding in investing in companies that take part in sustainably irresponsible practices or seeking out investments in companies that are actively trying to have a positive impact on the environment.

This might not be a revolution in the green investing world, but it definitely makes green investments more attainable for those who are more risk averse.  It is clear from their creation that more and more of the financial world is veering towards sustainability and, considering how the rest of the world is embracing sustainability, it is my opinion that this trend is on an upward path.

Photo Source: Monica’s Dad

In a nutshell, sustainable development means that the things we do today (build, create, consume) meet our needs without compromising future generations’ ability to meet their own needs.  One of the things I love most about this concept is its simplicity; it really just boils down to the fact that we can’t take things at a faster rate than they have the capacity to regenerate.  Regardless of the research and new developments we find or technology we create, it still seems as if it will boil down to balancing this simple equation.  To me this seems similar to the fitness industry – regardless of how many new advancements in exercise or food we make, it still seems to boil down to taking in less calories than you expend if you want to lose weight.

In 1987, the report Our Common Future was published by the United Nations World Commission on Environment and Development.  This seems as if it was a major step in establishing this movement as it unified the nations in a pursuit of sustainable development.  In addition, what is apparently the most often quoted definition of sustainable development came from this report.  Once you break apart from this simple definition you begin to see the real difficulty in implementing something that requires worldwide involvement.

According to some sources, the three basic components of the equation are economic, social, and natural.  As you can see, economic (hence green investing) is one of only three parts, but the difficulty comes in how capable one resource is of substituting for the other.  For example, we are currently pouring a significant amount of resources into coming up with solutions to our problems of consumption – i.e. make buildings more efficient, make cars require less fuel, release less carbon through farming.  But a major problem still lies in whether we can continue living our lives the way we are (with new more sustainable technologies in place of less sustainable ones), or if a drastic change in our habits needs to begin in tandem.

I’ll use the comparison to fitness again because it seems as if a similar thing is happening here as well.  Americans are becoming obese at an alarming rate.  However, instead of instigating massive changes in the way we live our lives, the diets we have, and the amount of exercise we get, most people are looking to the get fit quick schemes that don’t involve any actual work.  If we can’t get fit on get fit quick schemes, there’s no way the world can become sustainable on get sustainable quick schemes!

This seems like a good place to stop, but in my next post I will talk a little more about sustainable development (and will touch on corporate sustainability), and then begin to look into more detailed information about green investing and green investments.  I hope you enjoyed reading and I didn’t let my own opinions get the best of me.  This is definitely an interesting subject with a lot of great information to unearth.

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