The Green Transition Scoreboard, a time-based, global tracking of the private financial system for all sectors investing in green markets, has found that private investments in green markets (or “the green transition”) have totaled $3.3 trillion since 2007.
“As investment funds shift away from more speculative sectors such as hedge funds, private equity and commodity ETFs, as well as other fossilized sectors, and redeploy at least 10% of their portfolios directly in companies driving the global Green Transition, the $10 trillion by 2020
goal is well within reach,” the latest report states.
“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 which suggests 40% of portfolios should be in green sectors – half to hedge against climate risk and half to capitalize on these opportunities.”
The tracking and the report are divided into 5 sectors:
- renewable energy
- green construction and efficiency
- smart grid
- corporate R&D
Notable, some rather large potential sectors — nuclear, biofuels, and “clean coal” — are not tracked/included at all due to “controversy or lack of consensus that they will make a long-term contribution to sustainability.”
“Companies, organizations and the sources 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, many United Nations, European and NGO reports, and traditional reporting sources such as Bloomberg, Yahoo Finance, Reuters and individual company reports.”
One notable finding so far is the amount of leapfrogging to green technology that is occurring in developing countries. This, of course, is something I focused on in my CNBC & Harvard Business Review “Energy Opportunities” interview last year, and I think it’s something that will be a more and more important economic and energy theme in the years to come.