Four years on from the collapse of Lehman Brothers in the US and the subsequent global financial crisis, have we learned our lesson?
Are we investing our money in more sustainable enterprises and steering clear of the kind of investment black holes that did so much damage last time?
It’s not surprising that those in the field of sustainable investment see the events of the last few years as a chance to try show us a different way. Amy Domini, founder and CEO of Domini Social Investments, is one such financial expert who sees a chance to make progress out of chaos. In a recent interview, Domini – whose firm’s mission statement says its staff are “not only investors, but also concerned citizens” – said she believes people will want to be more ethical with their money.
“As society sees the full cost of traditional business behaviour, socially responsible investing will be embraced as the single most important lever towards building a better world than the planet has ever seen,” she recently told Green Money Journal.
Even if you recoil instinctively when phrases like ‘better world’ trip off the tongue of investment professionals, there’s little doubt that those who have put money into green enterprises can already point to better profits. Investors in Carbon Credits – awarded to green projects that mitigate the effect of greenhouse gases and which are then traded on the carbon market – have enjoyed returns of up to 30 per cent a year.
That has created demand for further sustainable investment products – something which has not gone unnoticed by a number of firms. Advanced Global Trading Dubai is one such company, and its head of investments Connellan, says investment bodies are now looking at other ‘green funds’ as a potentially lucrative way of taking part in environmental evolution.
His own firm is looking at creating a green fund aimed at the retail market, allowing the more modest investor to get involved in a practice which has too often been restricted to major institutions. “As a company we are looking towards ‘green funds’ as another option for those keen to diversify some of the risk away, Connellan says.
AGT Advanced Global Trading is set to take the wraps off a new sustainable investment fund in November. “Everything the fund does will have an environmental benefit, with potentially lucrative returns and lower risk through diversification,” Connellan explains.
“This characteristic underlines the whole investment strategy and the fund might include various types of verified Carbon Credits, carbon futures contracts or even direct investment into approved environmental projects.” He says his firm has had people in the Middle East pitching environmental projects to them “on a weekly basis”. “Unfortunately, to date we haven’t been able to become financially involved in these often virtuous and financially-sound projects, but the arrival of a green fund would open the door to really make a difference, while pursuing excellent returns for our clients.” If firms can show profits from going green, they can expect investors to be keen.