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Investing In The Nexus Of Environment And Finance

Mar. 11, 2018 9:56 AM ET


  • There are massive secular trends afoot globally that provide long-term opportunities for new and clean energy technologies.
  • Companies are aligning sustainability and economic goals by moving into clean technology investment because it makes economic sense.
  • Disruptive technology does not care who is in Washington.

[The Institute for Innovation Development recently talked with Robert Uek and Bill Page, co-managers of the Essex Environmental Opportunities Fund - a global, all-cap mutual fund investing across nine environmental technology themes. While the term nexus has been bandied about a lot, it seems most appropriate here as this fund’s investment strategy truly seems to position itself squarely at unique crossroads: between a socially responsible mindset and corporate profitability, technological innovation and bottom line efficiency. All the while, finding solutions to critical, real world environmental and social issues in the process. It really does beg the question: How impactful is your investment portfolio?]

Hortz: Where are we on the issue of sustainability today and what is the investment case for areas like clean energy and resource optimization?

Uek: Sustainability is rapidly mainstreaming. What was once a social aspiration is now an economic reality where companies are investing in technologies that enable sustainability. Clean technologies, such as LED lighting, solar arrays and energy efficiency projects are proving to be strong investments. In late January, Nike announced it was going to be powered by 100% renewable energy by 2025, seven years earlier than initially planned. Nike just signed an 86 megawatt wind power purchase agreement from two Texas wind farms to meet this goal.

Companies are aligning sustainability and economic goals by moving into clean technology investment because it makes economic sense. As clean technology cost curves have come down over the last 10 years, end market demand has increased. For example, according to PV Insights, solar module prices are down from close to $2.00 per watt in 2010 to under $0.40 today, leading to solar energy taking share from traditional fossil fuel sources, as it is cheaper, and lessens commodity price risk for the companies running their operations on solar and wind power.

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Institute for Innovation Development (IID) is an educational and business development catalyst for growth-oriented financial advisors and progressive financial services executives who are determined to grow their firms in a business environment of accelerating business and cultural change. Run as a social enterprise, the Institute will be dedicated to help make business innovation best practices a vital cornerstone for members’ ongoing growth, competitive differentiation, and client/community engagement strategies. Three current IID initiatives are: 1. Integrating business innovation mindsets, processes and tools into financial services practices through the formation of Advisor Practice Management 3.0 professional development. 2. Applying business innovation as a powerful and differentiating advisor marketing/branding approach and community engagement strategy. 3. Creating a FinTech radar program to increase communication and access between the financial advisor and early stage FinTech communities. Bill Hortz, Founder and Dean, of the Institute and Institute Founding Innovator members (comprised of top cross-industry innovation experts, innovative fintech companies, and progressive minded financial advisors and industry thought leaders) will be contributing articles and hopefully sparking ideas and discourse on much needed, next-generation advisor business models and industry development. We will seek to uncover proven business innovation best practices; learn from innovative business creators; explore innovation mindsets; hear about new approaches, services and technologies; and ultimately discover how to apply these insights to a financial advisor's business. For more details about the Institute, investigate here: https://innovationdevelopment.org/annual-membership

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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