Sensing a Trend, Institutions Invest in Green

While some continue to refute that human action is causing global climate change, institutions—sensing a trend—gradually are allocating funds to green investing.


(September 4, 2009) – Leading institutional capital pools from both sides of the Atlantic have, in recent days, announced that they will invest in green technology, signaling a wider trend of acceptance for an asset class once thought to be on the fringe.


New York’s State Common Retirement Fund—recently embroiled in scandal over placement agent use—has, through its Green Strategic Investment Program (GSIP), decided to put $200 million into the FTSE Environmental Technology 50 and the HSBC Climate Change index, financial site SocialFunds is reporting. The $100 million apiece to each index constituted 2/5ths of GSIPs total allocation of $500 million, which is to be spent over a three-year period starting in April 2009.


On the other side of the pond, Norway’s oft-cited sovereign fund has committed even more funds to green investing, promising $3.5 billion to the asset class over five years, The New York Times is reporting. The investment plan must be approved by Parliament when the national budget is debated later in the year. However, such a move would be within the fund’s character. A traditionally activist fund—and one supported by the nation’s oil revenues—this green allocation can be seen as both a continuation of its history and a realization that, if the current trend of alternative energy sources supported by governments continues, oil revenues may become increasingly uncertain.


Such moves may not be specifically a result of increased belief in climate change science, however. While skepticism still abounds regarding the global climate change being a human-precipitated event, an increasing number of funds are realizing that government action to spur green technologies will, in all likelihood, increase. Thus, regardless of belief, it is more likely such institutional allocations to green technology will increase.


To read more on this topic, subscribe to the next issue of ai5000 —published September, 22, 2009—and read a special column on green investing going forward.

To contact the <em>aiCIO</em> editor of this story: Kristopher McDaniel at <a href=''></a>