Category Archives: Green Investment
Financing Green Growth in a Resource-constrained World
Every year developing countries requires amount of 200 billion dollars to combat drought, lack of water, famine, floods and deforestation limitation. As they are the developing countries, the financial needs and requirement are not met by their income generation. This leads intervention of world organisation such as World Bank, United Nation Development Fund to provide financial support to developing countries. But these funds are given under stipulated policies and frame work that all activities aim to protect the climate change of the development countries. They are also mandates to create renewable way of resource utilization instead of constrained non renewable resource exploitation.
Carbon credit exchange is new form of income to industry and organization. The whole idea behind carbon credit exchange is that non renewable industry in developed country can buy credit point earned by renewable industry which is in under developed or developing countries. The purchasing norms is created and maintained by KYOTO protocol which has different rule to various industry and even based on country. This again enhances green companies to grow more and earning through carbon credit is considered as financing method. So in over all the green growth induces resource constrained areas to develop sustainable plan and implementation through multiple financial aids.
United Nation Development Agenda 2015 as Green Sustainable Economy
After Rio +20, the United Nations organization has aggregated a different industry for an ambitious initiative. UN enlighten program as the Post 2015 Development Agenda. Development framework composites of economic, social and ecological progress which aim to bring sustainable Development in world. In short these objectives are collectively called as SDG (Sustainable Development Goal).
The frame work consists of two main targets
- U.N. Millennium Development Goals (MDGs)
- Encourage and promoting ecosystems and biodiversity.
Direct focus on “green economy” and “green growth” important aspects of the U.N.’s Post 2015 Development Agenda. A Steering Board constitute by World Economic Forum Industry Partner companies with help of various industries CEO. They took owe to change their development economy towards the Green economy with proper utilization of resource. Currently various big organization such as transport, medical , automobile and other joined in World Economic Forum to look forward opportunities in green growth. UN mandates government, industries to show their progress in this subjective. Kyoto protocol is one such activity that measures the industrial and government initiative, their working model to reduce carbon foot prints. In short United Nation Agenda on Development in mid decade (2015) will be aimed towards Green Sustainable Economy.
Government Policy maker’s position in Green investment strategy
Due to environmental pressure such as famine, flood, drought from all around the world made government and industrialist to think about the strategy to built better business that will accommodate ecological aspects. Global Economic Forum clearly stated that present way of development economics to be changed to address climate change. Government started analyzing and implementing the policy and various scheme to address climatic change. This includes constructing hydro electric power generation, reduce pollution by recycling industrial wastes, dismantle toxic product, afforestation and so on. The policy also include bring awareness to people of different economic class to understand whole idea of green technology and its important. This process is commonly agreed all around the world.
Every year U.S government give bank grantees and loan for innovative idea and existing method expansion on Green Technology. Federal Government also wants to small, medium and large industry to utilize the fund to involve Research & Development on new technology to combat climate change. In broad perspective, Government policies are align with green investment strategy both in objective and subjective methods. Thus policy help companies and organization to grow towards sustainable green technology and in turn that gives advantage for investor to boost confident while engage green investment business.
Wide opportunities for entrepreneur in Green investment
In entrepreneur perspective business should be sustainable, economically over a quite long period of time. It is important for fact that money alone can’t give us proper development. Labour relation, environment aspects, resource ability, employee satisfaction, stake holder satisfaction, social and political involvement and lot of other factor contributes for achieving greater success in business model. Green investment as business view is viable option of individual or group or even communities to indulge in development of organisation. As a social responsibility, entrepreneur can choose green investment as they improve present status of world into better state of living. Some of great and noble innovators are having intention to development plan that can accommodate both financial and non financial aspect of growth in entrepreneur sector.
If you are entrepreneur and trying to build business pattern for socio economic cause then green business like energy generation and proper utilization are the best field to work with. Initial there is chance of getting less profit or even no profit but there is the assurance that green investment will provide you best opportunity in long term consideration . Already more people proven this and yet more going to prove this concept. Get engage with challenges of the green entrepreneur sector where you can earn more than other sector in present and future.
Factors to be considered for Green investment
Having said that green investment are good mode for generating revenue, one should take consideration in element of Green investment which are given below and they are basically based on the financial perspective
- Returns expected from the green companies – Look current and past history regarding the profit and loss account statement of the companies & check for the balance sheet too. Dividend per share also to be considered.
- Risk assessment on ecological view – Some of the green energy like solar panel has some negative impact (because of the lead content in the arrays). So in future there is possible of reduction in production or trend change.
- Correlation of green investment profit with other investment methods – It is important to compare the growth rate of green energy company versus other company to trace out the profit margin deviation. This will give an idea about the total amount of profit you can earn in certain period of time.
- Long-term risk like nature Catastrophic action on the green ideologies industries – Some method of clean energy production methods such as hydro power generation may face catastrophic event like flood or drought which make output lower.
- Social and Political factor and future policy on green technology – Watch for the political condition of region and people awareness about the social change.
If all these aspects are taken in to account for investment in green industries, apparently your investment will be safe and yielding more economic benefits for you.
Need for Green Investment
It is responsibility of every people to save nature. Because all the material we use, either directly or indirectly it will affect the nature. So we have to take initiative at the earliest. In this context, if we encourage and invest clean energy generation, then it automatically consider as we are supporting in saving nature. There are lot of companies and organization is available in stock exchange, equity shares and their growth is tremendous due to government policies and also with people involvement. On other hand corporate social responsibility increase more transparent and visibility towards attention of the world. Even small scale industries are instructed to follow on the rules to reduce the carbon foot print. So there is a rapid implementation of policies in clean energy sector.
Profit per share also comparatively increased over a period of time due to momentum in the business trend. Economist predicts that in upcoming years many small industries will grow as large industry due to the clean energy generation. Either small scale industry or large scale industry, the profit will have bullion effect for investor. Green investment brings two values for same investment. One will be environment prevention where as other will more profit. It provided enough satisfaction for people that they have supported for the social and natural economic change .Thus green investment is emerging market for investment option in aspect related profit.
What is green investment?
Industrial revolution of 20th and 21st centuries made enormous pollution and ecological imbalance all around the world. Carbon-di-oxide has major share in green house gas which is contributed by industries effect global climate. Also there is other gas like methane, nitrogen-di-oxide that makes negative impact in climate changes. Lot of changes are going in industry and economic policies of country to address global climate issues. Every aspect of change is to reduce the green house gas emission and use renewable resource like wind, water, solar energy for power creation. In addition to this, World Economic Forum lists energy sector such as bio fuels, energy efficiency, smart grid in clean energy company( Clean energy company are those who emit less CO2 gas). Clean energy company are gaining momentum in the current market trend. Tremendous help provided by the research methodology and technology add the momentum in exponential phase.
Economic and Financial policy of developed and developing countries are rewritten to generate clean energy. Subsides, concession, bank loan & guarantee are given to industries to encourage participate in clean energy generation. Automobile, Food and Energy production sectors changed their road map toward new policies on clean energy in order to gain more federal funds. Investments made on these companies are generally called as green investment. Green investment can be stock exchange bonds, equity shares. Starting from small to huge industry, there is wider opportunities and growth requirement in this sector. In this perspective green investment is vibrant.