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Cleantech, and The Idea of Blue-Chips Forcing Others To Go Green
Jeremy Faludi, 5 Mar 05

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Cleantech is a green business-matchmaking firm. They connect businesspeople and investors to technologists making "products, services, and processes that are inherently designed to provide superior performance at lower costs, greatly reduce or eliminate environmental impacts and, in doing so, improve the quality of life." As Red Herring reports, "After years of promoting their arguments with little more than optimism and anecdotes, proponents of Cleantech on Monday finally got some facts and figures that reflect growing investor interest in the sector."

"[Cleantech-related] investment nearly tripled to an average of $1 billion between 2000 and 2003.... The authors also introduced a new market index, which they named the Vortex-Cleantech Index, based on a collection of 182 U.S.-traded cleantech stocks with a combined market cap of nearly $100 billion. The index rose in value by 267 percent in the decade ending May 2004 compared with a 181 percent gain in the Nasdaq Composite Index and a 146 percent rise in the Russell 2000 Index."

On a related note, a recent Washington Post op-ed had a good laundry list of big companies doing the Natural Capitalism thing, cutting their greenhouse emissions while saving money. (Thanks, Cascadia Scorecard, for mentioning it.)


"IBM, DuPont, BT (British Telecom), Alcan, NorskeCanada and Bayer -- have each reduced emissions by at least 60 percent since the early 1990s, collectively saving more than $4 billion in the process. Numerous other smart companies, such as Alcoa, 3M, Kodak, United Technologies, Lafarge, Shell and BP, have also far exceeded the smaller reductions envisaged under Kyoto and have saved large sums by using energy more efficiently..."

"British Prime Minister Tony Blair recently told the Economist that between 1990 and 2002 Britain trimmed emissions 15 percent, while boosting its economy 36 percent."

"DuPont, for example, began an ambitious carbon dioxide and energy reduction program 10 years ago that today has brought greenhouse gas emissions down 70 percent; in the same period, production increased almost 30 percent... In addition to cumulative energy savings of more than $2 billion, renewable energy saves $10 million annually over fossil fuels. DuPont also hopes to realize $40 million in coming years from trading carbon emissions credits. To underscore its commitment to this new commodities market, the company became a charter member of the Chicago Climate Exchange..."


This latter note reinforces a little fantasy of mine that came out of the Worldchanging Summit last summer: a few big companies find reducing emissions to be financially advantageous, so they are early-adopters of carbon markets. These companies have enough clout that combined with environmental lobbyists they force mandatory carbon markets on the rest of their industries, because their early-adopter expertise gives them a much bigger competitive advantage when all companies have to play by carbon market rules. This pattern repeats itself for nations, and for other resource / pollutant markets. It's one of the ways an environmental revolution can happen without requiring an economic revolution first.

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Comments

Cleantech (upon whose advisory board I sit) is not a venture capital firm; they do not have any funds to invest. They are, as stated on their home page, "a market facilitation service supported by private investors." They hold conferences, publish reports, and provide networking services. But they don't invest.


Posted by: Joel Makower on 6 Mar 05

Sorry about the misunderstanding! I've corrected the post.


Posted by: Jer on 6 Mar 05



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