Investment

The latest Green Transition Scoreboard® (GTS) found that private green investments now total more than $8.1 trillion USD ($8,133,456,730,370).

Published annually since 2009 by Ethical Markets, the GTS is a global measure of private green investment in five green sectors: 1) Renewable Energy, 2) Efficiency, 3) Life Systems (water, waste, recycling, community investing, e-learning and fintech), 4) Green Construction, and 5) Green Corporate R&D. Government investments have been omitted wherever possible and technological criteria are strictly applied.

Sector Amount US $


Renewable Energy – $3,427,534,992,202

Energy Efficiency – $1,748,904,490,919

Life Systems – $1,660,880,346,366

Green Construction – $914,736,379,757

Corporate Green R&D – $381,400,521,125

Grand Total – $8,133,456,730,370***

The aggregated total is tracked by Ethical Markets Media Certified B Corporation’s team of experts and global advisory board, led by CEO Dr. Hazel Henderson, futurist/author and former US government science policy advisor.

Henderson said “The green economy is growing faster than anyone realizes. We knew that this good news on the progress of the global green transition couldn’t be fully covered by mainstream financial media and news programs whose advertising is still from fossilized sectors.”

GTS co-author Tim Nash, The Sustainable Economist, adds “Although the USA is expected to fall behind due to federal policies that put obsolete industries like coal ahead of thriving green sectors, large corporations are stepping up to invest billions in more efficient technologies.”

The full 2017 GTS report titled “Deepening Green Finance” can be downloaded free here: 2017 Green Transition Scoreboard Cities and states worldwide are now leading, energized by former New York City mayor Michael Bloomberg and many others. The UNEP Inquiry on Design of a Sustainable Financial System is successfully engaging conventional financial markets. Co-director Dr. Simon Zadek welcomed the release of the GTS report, “With a changed political landscape, the case for green finance has to be strengthened, so your work is very important and has to be widely used”.

The GTS report traces private money shifting from incumbent fossilized sectors to emerging green opportunities. Financial firms are being forced to innovate as pressure grows from all sides.

Activist ethical investors and divestment campaigns are getting louder. New pressure from above is driven by the National Development Commitments (NDCs) signed by 194 governments under the UN COP 21 and 22 climate accords and Sustainable Development Goals (SDGs). Pressure is also coming from below with the rise of Silicon Valley’s Fintech100, including crowdfunding, peer-to-peer lending, and reward currencies.

Horyou is the Social Network for Social Good, which connects, supports and promotes social initiatives, entrepreneurs, and citizens who help the implementation of the Sustainable Development Goals to build a more harmonious and inclusive world. Horyou is also the host of SIGEF, the Social Innovation and Global Ethics Forum, taking place in Astana, Kazakhstan during the EXPO 2017, from 5-7 September. We invite you to Be the Change, Be Horyou!

Eric Lonergan first grabbed my attention when I came across an interview with him in an Irish Sunday newspaper. As somebody who also read philosophy and political economy at University, I’m always intrigued as to how I often look at economic issues through a completely different lens than some of my contemporaries who have studied pure finance or mathematics. Horyou, although not solely profit seeking, is an enterprise like any other with respect to having financial costs, so it is keenly aware that money, whether used for social or personal interest, is a tool of mobilization. In the interview I read, I learned that Eric Lonergan has just written a book on the philosophy of money and society’s relationship with it it. And I found myself nodding along with much of Eric’s hypotheses, so I was delighted when he agreed to sit down for a chat.

Eric Lonergan
Eric Lonergan

1) You did your undergraduate degree in philosophy, politics and economics at Oxford and your masters in economics and philosophy at the London School of Economics. Subsequently, working as a hedge fund manager, do you find yourself reading certain situations or analyzing things differently to your colleagues who might have studied pure finance?

One of the challenges with education in areas like economics and finance is that you have to learn the conventional wisdom before you can identify what’s wrong with it. So I spent a lot of my time studying mainstream economics and finance – much of which has some insight. Even advocates of ‘efficient markets’ like Eugene Fama, have useful observations. That said, the most useful studying I have done, ironically, was philosophy. I learned that virtually all theories are flawed, as is a lot of ‘expert opinion’.  Financial markets are similarly unforgiving. Pure finance typically ignores the most important aspect of markets – human behavior and psychology.  

2) In your recent, highly acclaimed book ‘Money’, you make the point that money as a function should be looked at as a tool to live rather than an ability to accumulate. Was this view formed from your academic study or from seeing money at work in the real world?

Part of the reason I wrote ‘Money’ was to broaden our understanding of money and finance. One of the intellectually fascinating aspects of money is that it underpins human progress, but it is also a source of many problems. I tried to explore this theme more broadly. Finance connects us all at a real human level – pensions are inter-generational transfers, mortgage lending connects depositors and young households etc. And at the other extreme, millions of people are inter-connected through global financial markets. I have seen both sides at work in the real world. At a positive level, global investors can try and set high standards for global governance, encourage long-term thinking in policy-making, and finance international trade and the exchange of technology and ideas. These are all positive forces. The other side of this interdependence is that you can have destructive financial panics – which I witnessed first-hand in the late 1990s, during the Asian crisis, and again in 2008. The challenge for policy-makers is to harness the benefits of trade and finance and mitigate these risks – which primarily means developing policies to prevent or shorten recessions.  

3) There are hundreds of stories of people leaving finance post crises, when the greed of the system was exposed, including Horyou’s own CEO who held director positions at JP Morgan and Bank of China. As someone who still works in the industry, have you seen a definite culture shift/change in priorities? How does conversation within the industry compare to pre-financial crisis?

I do think there has been a cultural shift, encouraged also by a major shift in the regulatory environment, which should be welcomed by the industry. But it would be naive to think that an industry mainly focused on making money will foster a culture of generous, socially-minded, individuals! The main challenge for the regulators, who have a difficult task, is to ensure that the incentives of participants in the industry are aligned with doing the right thing, and ultimately the interests of broader society. 

Money: The Art of Living
Money: The Art of Living

4) Horyou have just launched their global social currency “Spotlight”, which matches investors to social enterprises they want to support. We see that there is a huge appetite for impact investing, green finance etc. What are your views on these areas? Will environmental/social returns ever override profits for investors or as consumers become more discerning and regulations tighten, do you think they even have a choice to ignore more sustainable investment patterns?

My thinking on this has been heavily influenced by knowing and working with Nigel Kershaw from the Big Issue, and one of the UK’s leading social entrepreneurs and thinkers. I think social enterprises will grow in importance. In contrast to many charities, which have to devote considerable resources to fund-raising, social enterprises can be self-sufficient. And they can have an economic advantage – there is little doubt, I think, that consumers will continue to be more discerning in considering the broader effects of their actions and those of the enterprises they interact with.

5) What are the main areas you are seeing investment opportunity in, in the short term?

I try always to think in terms of the ‘long term’ – there is a lot of distracting noise in the short-term. I think one of the most interesting aspects of public markets currently – a huge fad – is what I call ‘volatility aversion’. Investor obsession with recent historic volatility as a measure of risk is causing huge anomalies in pricing. The most straightforward manifestation of this is the equity risk premium – the difference in implied returns from equities compared with government bonds. Global equities are currently priced to deliver far superior returns to government bonds over the next five to 10 years.

6) Finally, Horyou support people making impact on society for good. What impact or contribution do you want to be remembered for/still want to achieve? 

I’m too much of a philosopher to want to be remembered for anything – I’m not sure that’s a helpful ambition! I would be very happy if I could contribute to the development of policies that shorten the duration of recessions.

Eric Longeran has an interesting way of looking at the world. I could be accused of bias, considering we share many of the same views on the concept of money within society, but the more we watch economies evolve each day, the more we realise how we view money and our propensity to spend or save, is actually very much driven by human sentiment and social pressures, be it from our neighbour or the data we see in the markets. There is nothing to say that these views are right or wrong, but it is becoming more apparent that the discipline of economics is moving away from linear models and learning to adapt to the uncertain world we live in today.

Written by Dearbhla Gavin

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