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Investing in Green Funds and Companies
Until recently investments in green ethical companies has been a very specialised asset class, with very few funds making ethical investments.
Over the past few years there has been a vast increase in the number of investment funds making green investments and the value of those investments. Bloomberg predicts a 23% increase in renewable energy investments in 2010, highlighting the ever expanding asset class as a high priority target for offshore jurisdictions.
As part of responsible investing, green or cleantech investing is often described as investing in companies which work towards actively improving the health of the environment. In other words, green companies are developing new technological solutions for solving major environmental issues such as pollution and global warming. A green fund is therefore an instrument for making collective investments in these environmentally active companies which introduce new green technologies.
There are many interesting industries in which a genuinely green investment fund could be expected to invest for example:
· Renewable energy, including solar, wind, geothermal, biofuel technologies;
· Recycling and finding everyday energy efficiency solutions;
· Green transport;
· Green building/construction;
· Reforestation; and
· Pollution control and wastewater management.
If the global green sector really grows as expected, we may expect to see many new green funds and listings. Jersey is blessed with abundant natural resources and has developed a sophisticated and diversified financial service offering.
In the words of local Ernst & Young partner, Chris Matthews, “Jersey has the potential to be a market leader for cleantech business, by maximising the complimentary aspects of a world class funds jurisdiction and the potential to be an early adopter of clean energy and other technologies, which will become ever more important in sustaining both our economy and our unique natural island environment”.
Sources: Bloomberg New Energy Finance World Economic Forum, Credit Suisse, Fuji Kelzal
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