Report on the Green Transition Scoreboard February 2011

Ethical Markets - R Reports Relevant to GTS:

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For previous updates, press releases, endorsements and general information, see the Green Transition Scoreboard® homepage.

Executive Summary
The Green Transition Scoreboard® (GTS) is a time-based, global tracking of the private financial system for all sectors investing in green markets. This update of the GTS has found investments totaling more than $2 trillion in the green economy since 2007.

This amount is significant because many studies, computer models and reports indicate that investing $1 trillion annually until 2020 can ramp up material and energy efficiencies, reduce costs of wind, solar, geothermal and other renewable energy, increase sustainable land-use and forestry, and support smart infrastructure, transport, building and urban re-design, accelerating the Green Transition worldwide.  The updated 2010 finding of over $2 trillion puts global investors and countries on track to reach $10 trillion in investments by 2020.

To ensure meeting the target, investment funds need to shift away from more speculative sectors such as hedge funds and dark pools and away from investing in fossilized sectors to investing at least 10% of their portfolios directly in companies driving the global Green Transition. With the data in the GTS, security analysts can update their strategic asset allocation (SAA) models to highlight green markets, as now recognized in the report by Mercer that “standard approaches to SAA rely heavily on historical quantitative analysis … historic precedent is not an effective indicator of future performance” (see page v).

The Green Transition Scoreboard® tracks five sectors: Renewable Energy, Efficiency and Green Construction, Cleantech, Smart Grid and Corporate R&D. Renewable Energy includes private technology development, equipment manufacturing, project finance and M&A activity. Efficiency and Green Construction include new building construction and existing building retrofits. Cleantech is a broad sector and includes agriculture; air and environment; energy efficiency, infrastructure and storage; materials; recycling and waste; transportation; and water/wastewater. Smart Grid includes companies actually putting smart grids in place, building the infrastructure rather than designing the technology.  Together, these first four sectors account for over $1.8 trillion in investments since 2007.

Corporate Research and Development (R&D) in green transition technologies alone accounts for over $163 billion in investments.  This number becomes more significant in light of the $100 million threshold, meaning thousands of R&D projects remain unaccounted for.  The Green Transition Scoreboard® is the only place to find aggregate corporate green research and development investments, specifically tracking R&D dollars for innovative technologies that reduce the use of natural resources and minimize environmental impacts.

Several subsectors such as nuclear, biofuels and coal carbon sequestration have been purposefully omitted either because of controversy or lack of consensus that they will make a long-term contribution to sustainability.

Companies, organizations and the source of financial data included in the GTS are screened by rigorous social, environment and ethical auditing standards.  Data sources include the highly respected Cleantech Group, LLC, and traditional reporting sources such as Bloomberg, Yahoo Finance and the NASDAQ OMX Green Economy Global Benchmark Index.

The Green Transition Scoreboard® was created as a public service to help grow the green economy and reform market metrics and due diligence worldwide.  The full report and other supporting materials are available online.

We created this information base on private investments in green sectors because many developing countries where these technologies are of paramount importance lack the resources to compile this data.  Green technologies often draw on available local resources in a more cost effective, time effective manner than technologies from the fossil-fueled era.

To provide this information as widely as possible, we are making the GTS available to those UN agencies spearheading the UN’s Green Economy Initiative.

The Green Transition Scoreboard® is a trademarked, ongoing program of research with new reports published every six months.  We intend to deepen this research, expanding current categories and adding new ones as the green sectors grow and develop in many countries.