Finance & Investment

2013 Green Transition Scoreboard® Uncovers Over $4.1T in Private Green Investments

The Ethical Markets Green Transition Scoreboard® (GTS), which tracks private investments growing the green economy worldwide since 2007, found $4.1 trillion invested or committed as of Q4 2012, promising long strides away from the fossil-fueled Industrial Era in 2013.

By Jennifer Elks | Published 11 years ago | About a 2 minute read

2012 was an inflection point for the green transition worldwide, according to the report. Technology and innovation — such as in electricity generation and transport — began forcing structural changes and rethinking of business models, urban design and development toward integrated systemic approaches.

The March 2013 GTS report, “Green Transition Inflection Point,” demonstrates that many private investors are following Ethical Markets’ recommended avenue for institutional investors to shift to green sectors. This transition strategy — recognized in the 2012 report, which suggests 40% of portfolios should be in Green Transition sectors — validates models indicating that investing $1 trillion annually until 2020 can scale innovations and reduce costs. With over $4.1 trillion invested since 2007, investors and countries growing green sectors globally are on track to reach $10 trillion in investments by 2020.

The Green Transition Scoreboard® tracks five sectors:

Renewable energy
Green construction
Energy efficiency
Green R&D
Cleantech

Each area includes substantial capital investment, based on Ethical Markets president Hazel Henderson's years of research as a science advisor and the Ethical Markets Advisory Board expertise.

“The output of Rio+20 was an unprecedented reintegration of human knowledge, realizing that environmental, social and human capital must be assessed and integrated into financial markets in order to achieve equitable and sustainable forms of development and resulting in new global shared goals and paths toward low-carbon, cleaner, greener, information-richer economies,” says Henderson.

The GTS omits nuclear, clean coal, carbon capture and sequestration, and biofuels from feedstocks other than sea-grown algae. It also looks closely at nanotech, genetic engineering, artificial lifeforms and 3D printing, determining their green contribution on a case-by-case basis.

“The GTS adopts a much more comprehensive and therefore effective working definition of a green economy than is usually the case, and provides a robust and consistent framework for measuring our progress towards it,” says Matthew Kiernan, founder of Innovest and CEO of Inflection Point Capital Management.

GTS data sources include Cleantech, Bloomberg, Yahoo Finance, Reuters and many UN and other international studies, NASA and individual company reports. Companies, organizations and the sources of financial data included in the GTS are screened by rigorous social, environment and ethical auditing standards.

Last month, the Carbon Disclosure Project (CDP) announced investors representing a third of the world's invested capital are asking companies to report their carbon emissions and strategies through the CDP, further evidence of widespread investor interest in how companies are addressing climate-related risks.