photo credit: Susan E Adams

In the wake of An Inconvenient Truth, the eyes of the business world have opened wide to the consumer demand for doing greener business. As a business advisor, I have noticed this trend and the companies that are embracing it. My clients are always looking for ways to set apart their business in order to increase their company’s bottom line. For many companies using environmentalism can be a very effective way of differentiating their business from their competitors.

One example of a company that uses its green thumb to stand apart from the crowd is Greenkarat.com. They sell rings that are made of recycled gold and platinum taken from old jewelry and other items. The company emerged with the goal of starting a trend to limit industrial methods of extracting jewelry’s precious metals and gems from the earth that damage the land and endanger ecosystems. Their market knowledge told them that there would always be a demand for jewelry yet they saw an opportunity to do things differently. Their mission is to “…provide an ecologically and socially responsible jewelry alternative to those who seek change.” Greenkarat rings have been featured in top magazines like InStyle Weddings and are enjoying much international success. While your company may not be able to be as green as Greenkarat, it is wise to observe how the trend of environmental awareness and concern will affect the behaviors of your customer base and, in turn, do what you can to use this trend to your business’ advantage while also taking part in helping this noble cause.

There are many ways you can go green. One thing all companies can do is recycle their garbage. Other potential recyclables include computer hardware and office equipment. Companies can also join one or more green organizations. There are local conservancies and other local and national organizations that can easily be found through the internet. Companies with more money to invest in the cause can use solar panels to reduce their energy needs. Companies can also find ways of becoming a paperless or less-paper-using office.

Becoming a green business just makes good business sense, because many organizations and individuals are willing to pay more or go out of their way to support green companies. If your customer base shares the value of environmentalism, or a segment of your market does, this could be a way to drive new sales and cultivate loyalty within your customer base. The increase in operational costs (if there is one) of doing business the green way, should be offset by the increased margins you will be able to command by increasing your value proposition to the market. You will not only provide your customer with a valuable product or service you will also provide value to the world in which you operate. There is a measurable economic value associated with being a green business, and that value is now being recognized and paid for by the marketplace.

In order to capitalize on the environmental actions your company chooses to take, make sure to promote your efforts by including a section or page on your website that discusses your intentions and explains the measures you’re taking to join this movement. If your business has a storefront, you can put a sign up in a visible area explaining what you’re doing for the environment. We suggest that you don’t print pamphlets since the paper usage runs contrary to the classic green cause of saving trees.

Of all the business trends in the market today, the recognition of the value of being environmentally conscious and eco-friendly is one that I am most excited about. As a business owner you have the power to not only add value to customers but also to make the world a better place. What better way to differentiate your business than by joining the fight against waste and pollution and actively working to preserve our natural resources? For more help with differentiating your company to create increased loyalty and profitability, visit www.flourishingbusiness.com.

Elizabeth W. Gordon, founder and President of The Flourishing Business, LLC, is a visionary leader who has a passion for helping others achieve their entrepreneurial dreams and enjoy more of the best in life. With a vast and diverse background in many business arenas, Elizabeth regularly has the opportunity to share her business acumen with clients, large and small. She currently serves on the Board of Directors of the National Association of Women Business Owners (NAWBO), Atlanta and the Board of Directors of the American Association of University Women (AAUW) Atlanta. She is an Accredited Executive Associate of the Institute for Independent Business (IIB) and a certified Life Coach.

photo credit: angela7dreams

Green investing is growing up. Previously the province of a small number of investors who chased an even smaller number of companies, the market for environmental technology has expanded dramatically in recent years. And it has captured investors’ wallet share along the way. Inflows into green funds totaled $766 million for the year ending May 31, according to Morningstar, compared with $37 million in net outflows from religious funds over same time period. (Morningstar tracks these two subcategories under the umbrella of socially responsible investing, or SRI, funds). “The interest has turned from ‘maybe I’ll dabble in this’ to ‘this is an asset class I should include in my portfolio,’” says Jerry Moskowitz, president of FTSE Americas.

Surging fuel prices have helped make green technology one of the biggest equity growth areas in the U.S., says John Quealy, a green tech analyst at Canaccord Adams, an independent financial services firm in Boston. New products are keeping pace. Mutual funds represent the largest share of socially and environmentally screened funds, with $171.7 billion in total net assets invested across 173 different funds, according to the Social Investment Forum’s 2007 Report on Socially Responsible Investing Trends in the United States. Exchange-traded funds accounted for only 1% of the total assets of all socially and environmentally screened funds at the beginning of 2007, but their ranks are growing daily.

The source of investors’ fascination is, of course, the need to find alternatives to oil and other fossil fuels in today’s environment of scarcity and climate change. We’ve reached a point where environmental technologies have moved way beyond good wishes for Mother Earth, and are starting to make economic sense. Alternative energy has finally captured businesses’ and investors’ imaginations and the gold rush is on-and so are nascent fears of a bubble.

Oil prices of $140 or more per barrel highlight the scarcity-or at least, the fears of scarcity-of this hot commodity. Global demand for oil will only increase over the short term, even if record gas prices finally cause Americans to curb their consumption.

China and India are expected to more than double their energy use by 2030, according to the International Energy Agency. Increasing demand for fossil fuels pushes their prices up, which in turn spurs technological advances across all alternative energies. The world will continue developing better ways to power cars (the next iteration of the Toyota Prius, the ragingly popular gas sipper, will come with solar cells that help run its air conditioning), as well as alternatives to coal and other greenhouse gas emitters. Industry experts say that oil would have to drop back down to $50 per barrel for alternatives like solar, wind and geothermal energies to lose their economic viability.

Here’s a closer a look at the opportunities, and some potential risks, in green investing.

Clean and Green

Investors considering environmental tech should start by defining their terms. For example, some use “clean tech” and “green tech” interchangeably, while others make a clear distinction. Jack Robinson falls into the latter group. The manager of the $410 million Winslow Green Growth Fund-whose three-, five- and 10-year performance has bested the Russell 2000 Growth Index-defines green companies as those involved in a bona fide, sustainable solution to global warming or other environmental ills; clean companies, in his parlance, are environmentally neutral. One clean company that Winslow holds in Green Growth is Bankrate, a North Palm Beach, Fla.-based online consumer banking and personal finance network. A green company he owns is Green Mountain Coffee Roasters, a Waterbury, Vt.-based purveyor of fair trade organic coffee that is carbon-neutral and donates 5% of its earnings to earth-friendly causes.

Investors must also decide for themselves what constitutes a green company. Quealy identifies four subcategories within the green sector: energy and power technology, which includes fuel cells; water technology; recycling technology; and bioresource technology, which includes ethanol. However, many so-called green companies don’t draw 100% of their revenues from green activities. Purely returns-driven investors may not care to know the full scope of a company’s endeavors, but those who see themselves as socially responsible will. “If you’re large enough, you’re going to be doing things some people don’t like,” says Peter Kinder, president of KLD Research & Analytics, a Boston-based social research and index firm.

Robinson won’t hold companies that are at all “dirty.” For example, he won’t own BP, even though the British oil company is also developing alternative energies. Don Rogers, executive director of Virginia United Methodist Pensions, won’t invest in conglomerates with more than 10% of their income from any combination of alcohol, firearms and gambling. Green investors also line up on different sides of the nuclear power divide, with some embracing the technology as an attractive alternative to fossil fuels and others shunning it as expensive, a cause of toxic waste and prone to accidents or terrorist attacks.

The growth of green tech investment vehicles mirrors the increase in individual companies in the space. When Robinson first began investing in the category 15 years ago, he had only a handful of stocks to choose from. These days, he says, “the universe has expanded dramatically and a lot of the small caps have become mid-caps or even large caps.” One stock that graduated from small cap to mid-cap on Robinson’s watch is Itron, a Liberty Lake, Wash.-based company that produces electricity, gas, water and heat meters. When Robinson first invested in the company in early 2006, its market cap was under $1 billion, and today it’s about $3 billion.

The Al Gore Effect

Many credit Al Gore and his 2006 Oscar-winning movie, An Inconvenient Truth, for the uptick in consumers’ desire to go green. “He’s had a major impact on educating the public,” Robinson says. And today, more consumers are gaining access to green mutual funds through their 401(k) plans, he notes.

Christopher Manning, a financial advisor in Houston who focuses on SRI, says alternative energy investments are the most popular SRI category among his new clients this year. He uses Green Century mutual funds with his clients, as well as two PowerShares ETFs, Global Water and WilderHill Clean Energy.

Before he launched his own SRI-focused firm in 2005, Manning worried about how it would play deep in oil country. While he hasn’t encountered any outright hostility toward his mission, he says, he has found plenty of educational opportunities among potential clients. He’s also found himself quite a niche. “In this area, I’m the only game in town” for clients interested in SRI, Manning says.

Justin Harris, a financial advisor in Seattle, says few of his clients come in with specific requests about green investing. Most request a general negative screen that weeds out tobacco, gambling and alcohol stocks. While many advisors adopt SRI vehicles at their clients’ request, Harris went the opposite route: About seven years ago he set a mandate that all assets his clients invested with him would be in socially responsible investments. “I saw I wasn’t gaining anything by divorcing my money from my values,” he says. Harris didn’t lose any clients as a result of the mandate, and clients embraced the cause. “I find that people really want to be fully engaged,” he says. “They want to walk their talk.”

Policy Watch

As with so many issues in this election year, market watchers wonder how the new occupant of the White House will affect green technology next year and beyond. Both the presumptive Republican and Democratic nominees, John McCain and Barack Obama, respectively, support a cap-and-trade system for carbon emissions, so it’s likely this initiative will move forward regardless of the election’s outcome. A system adopted by the European Union several years ago, a cap-and-trade system creates market incentives for reducing carbon emissions. Companies are allotted a certain number of permits to release carbon gases, and if they can figure out a way to reduce their emissions, they can sell their excess permits for cash.

When investing in individual securities, investors can analyze how well companies are preparing themselves for these coming regulations, says Todd Larsen, spokesman for the Social Investment Forum, a trade association of the U.S. social investment industry. Companies will incur greater costs as a result of cap-and-trade regulations, and they will pass these costs along to their customers. For example, a one-cent increase in the cap-and-trade cost per ton of carbon translates into a 33% increase in the end consumer’s electricity costs, Robinson says. Investors interested in carbon as a commodity also have expanding options: In June, Barclays launched the first exchange-traded note offering investors pure exposure to the global price of carbon.

Many assume that a Democratic administration will be friendlier toward SRI principles. For example, conventional wisdom holds that Obama would be more likely than McCain to increase incentives for environmentally friendly corporate behavior. But in some ways, among individual investors the opposite may hold true. “SRI is demand-driven, and there’s nothing like a Republican president to drive demand,” says one prominent industry participant who requested anonymity for fear of being perceived as cynical. Indeed, frustration at President George W. Bush’s dismal environmental record has contributed to the popularity of alternative energy investments in recent years.

Investors or Believers

While the next occupant of the White House may affect certain environmental policies, SRI and green investing has enough momentum that it should make progress no matter who wins this November. “There has been a sea change at work,” says Calvert CEO Barbara Krumsiek. Corporations have embraced positive change on environment, social and governance issues (also known as “ESG”), she notes. Large institutions like public pension funds have taken up SRI investing, including shareholder advocacy, and investors are expressing unprecedented interest in SRI, Krumsiek continues.

Calvert doesn’t track how many of its investors are purely returns driven, as opposed to those who invest according their beliefs, but Krumsiek believes that both groups are well represented among her shareholders. The venerable SRI fund family ventured into the green tech space last year with the launch of the Calvert Global Alternative Energy Fund. The fund was down 12.1 % as of June 30, negative 0.2 points below Standard & Poor’s 500 results for the same period, according to Morningstar. Calvert plans to launch a Global Water Fund in the third quarter.

Bill Crager, president of Envestnet, a Chicago-based provider of investment management products and services, envisions a day when information on companies’ environmental, social and governance track records will become more readily available. One day, he predicts, clients might receive, along with their quarterly returns statement, a statement of their holdings’ sustainability efforts. This could take the form of a report on individual companies and how they help or hurt the planet during that time frame, by opening up a water filtration plant, say, or by polluting a local river, Crager says. Envestnet’s products include Veris Sustainable Strategies, mutual fund portfolios for socially conscious investors.

Potential SRI investors will invariably ask whether investing with their hearts-and their attention on ESG reports rather than earnings reports-will damage their wallets in the form of lower returns. “My experience is all investors are returns driven,” says Dan Porter, founder and vice president of marketing for IW Financial, a Portland, Maine-based provider of environmental, social and governance research, consulting and portfolio management solutions. “When I want to incorporate my values, the question is, can I do that at an acceptable level of cost?” The answer will vary from client to client.

Ready to Boil?

Only a handful of green mutual funds and ETFs tracked by Morningstar have even a five-year track record. “The jury is still out about performance of SRI funds in general,” says Stephen Horan, head of private wealth and investor education at the CFA Institute. “Both sides can cite studies to support their case.” Not surprisingly, of those that do, some have underperformed and others have outperformed the broader market. Those in the latter category include Winslow Green Growth, with 11.2% five-year returns as of June 26, compared with 7.4% for the Standard & Poor’s 500; and the New Alternatives Fund, which invests in alternative energy and boasts an 18.1% five-year return as of June 26, according to Morningstar.

Outsize returns like those may prompt the question of whether alternative energy is entering bubble territory. It’s never an easy question to answer. “If it pops, we’ll know,” says Johann Klaassen, vice president of managed account programs for First Affirmative Financial Network, an independent investment advisory firm in Colorado Springs, Colo., that designs green investment portfolios. That said, Klaassen believes alternative energy is still in “the opportunity phase.”

Robinson says solar companies got “priced to perfection” recently but have since receded from their highs. It would be wrong to avoid the category altogether, he says: “Long-term, solar is a part of the solution.” Oil prices will not likely make a big retreat, he believes, and demand for alternative energy sources will only grow.

After all, it’s not as if the world will stop using energy. FTSE’s Moskowitz says green tech companies are reporting solid earnings that are reflected in FTSE’s environmental indexes, the FTSE ET50 and the FTSE Environmental Opportunities All-Share Index. “They don’t look wild,” Moskowitz says of his indexes’ components.

Even so, green tech investors must have a strong stomach to weather the sector’s volatility. Some of that volatility comes from the fact that most green tech stocks are small-cap growth companies, which are among the most mercurial. In addition, Quealy says, “We live in an unbelievable bull market for commodities, where geopolitical discussions swing the price of oil two to three bucks daily.” This adds another layer of volatility to green tech stocks that other sectors don’t share, he notes.

Quealy still thinks green tech companies rank among the best secular growth opportunities for the next five to 10 years. Stock pickers would do well to study the management, market and marketable technology of the companies they’re considering, instead of blindly investing in the sector as a hot growth prospect, he advises. “The passive investment approach is likely to be a risky one as Wall Street decides who the winners and the losers are,” Quealy says.

Jan Bryan, a planner specializing in SRI out of Prescott, Ariz., reports that while her clients expect competitive returns from their investments, these long-term investors also understand and accept cycles of underperformance. For example, when defense and big oil are doing particularly well, portfolios that eschew them will miss out on those gains. Her clients have found other kinds of rewards in SRI and green investing. “Clients absolutely love it when you ask them their views on social issues,” she says. “They feel respected and heard, and these are the most loyal clients.” Klaassen also notes the phenomenon of “sticky clients” in the space: “They get invested in us, as well as with us.” First Affirmative does get some returns-driven investors, but they generally don’t stick around for long. “Hot money flows in and flows out,” Klaassen notes.

Elizabeth O’Brien is an author with Financial Planning magazine. For more information, please visit http://www.financial-planning.com

photo credit: OakleyOriginals

With everyone and their mother jumping onto the Green Movement bandwagon, words like Organic, Natural, Safe, are tossed around like water balloons at a county fair. If you’re the one catching the balloon, make sure it doesn’t unexpectedly go SPLAT all over you. The key to successfully navigating the New Green World and knowing whether you are purchasing safe, healthy and nutritious products is having a solid understanding of how to read the labels, and what the words Organic and Natural really mean.

Fertilizer Increases Yields

Widespread, frequent and excessive use of synthetic organophosphate fertilizers began in the 1930s, when such fertilizers became affordable and accessible to the masses. Food production quickly increased as a result of fertilizer use. Unfortunately, the effects of widespread organophosphates would not be realized for many years. It takes much longer for synthetic chemicals to break down, and by the 1950s and 1960s, phosphates from the overuse of fertilizers clogged streams, lakes, rivers and deltas, causing algal blooms and other environmental problems.

Silent Spring Arouses Concern

The publication of Silent Spring in 1962, focused attention on the toxicity of chemical pesticides, and by extension, the practices of chemical companies producing synthetic pesticides, herbicides and fertilizers. Before Carson’s book, the general public was not well aware of such problems with modern agricultural practices. Once published, the book sparked a movement by government officials and the public to ban DDT and scrutinize production, labeling and distributing of pesticides and fertilizers.

Silent Spring marked the beginning of awareness for government officials about the harmful nature of broad, indiscriminate use of synthetic chemicals. Baby steps were taken in the direction of better pesticide and herbicide regulation. Until pressured in the 1970s and 1980s by environmental groups and everyday grocery-shoppers, there were few regulations in place to prevent wholesale dumping of synthetic fertilizer and pesticides all over the food marketed to consumers. European farmers led the way in bringing natural farming methods and organic farming mainstream.

Government Takes Over Organics

The USDA began its Organic labeling program in 2002. The program has different levels, all of which can be confusing if you don’t read the fine print. The Green Movement trend has exploded exponentially since 2006, when An Inconvenient Truth, a film about global warming featuring Al Gore was released. Suddenly, everyone wanted on the Green bandwagon and now the wagon is mighty crowded. Green is the new Gold. Green business practices or at least the insinuation of green business practices, results in higher revenues for multi-national companies.

Safe, Natural Products

With Green becoming little more than a marketing label, how can consumers know what is really safe to eat, or nutritious for the body? When growing your own produce, how can you tell if a fertilizer is helpful or harmful? Just as synthetic chemical companies marketed heavily to farmers, companies producing clothing, food, and cosmetics clamor to have the official organic seal on their products. They claim everything possible to be Natural. To cut the wheat from the chaff, several resources explain the mysteries behind the labels and marketing claims and help consumers make beneficial and healthy choices.

The Mayo Clinic website debunks some of the myths about organic versus natural versus nutrition in food products: http://www.mayoclinic.com/health/organic-food/NU00255

The website www.safe-fertilizer-reviews.com contains information, reviews and survey results about natural fertilizers-or fertilizers that are not man-made.

The USDA website with information on the Organic Program is: www.ams.usda.gov/nop
There, you can read the fine print.

Proactive Consuming

The key to finding, purchasing and growing the healthiest produce with the least impact on the earth is understanding the meaning of natural and organic, and using that knowledge when making product purchasing decisions. Together, as earth-conscious consumers, we can make sure that the Green Business Claims made by mass-marketers are truly beneficial to health and to the earth.

Natural Fertilizer Guy started the website http://www.safe-fertilizer-reviews.com in order to provide gardeners, homeowners and landscapers with the tools and information they need to make informed, environmentally responsible purchases for gardening.

Natural fertilizers and Seaweed fertilizers are Natural Fertilizer Guy’s area of expertise. Each fertilizer reviewed on the site has been tested by Natural Fertilizer Guy, and has proved to increase plant growth as much, if not more than conventional, synthetic fertilizers.

For more information on natural fertilizers and seaweed fertilizers, please visit http://www.safe-fertilizer-reviews.com