Private Firms Invested $400 Billion in Green Tech So Far in 2011

Private Firms Invested $400 Billion in Green Tech So Far in 2011

Image CC licensed by Flickr user mikebaird

The sputtering economy hasn't stopped global investors from plugging $2.4 trillion into green technologies since 2007.

That's a big jump -- up $400 billion from just seven months ago [PDF], according to the latest update of the Green Transition Scorecard released today from Ethical Markets Media. By 2020, renewable energy, efficiency and green construction, clean tech, smart grid and corporate R&D are on track to receive as much as $10 trillion in cumulative investments. 

The report cites $1 trillion per year in investments as a good benchmark, since that level of steady commitment can "ramp up material and energy efficiencies, reduce costs of wind, solar, geothermal and other renewable energy, increase sustainable land-use and forestry, and support smart infrastructure, transport, building and urban re-design to solidify the Green Transition worldwide."

report coverBut in order for this to happen, institutional investors will need to shift away from "more speculative fossilized sectors, hedge funds, dark pools and commodity ETFs," said Hazel Henderson, who created the Green Transition Scorecard. That also means a shift away from tech IPOs, one of the factors that has been dragging down clean tech investments in recent months.

The report noted that these institutional investors needed to direct at least 10 percent of their portfolios toward green technologies; Investment consultant Mercer, meanwhile, recommends 40 percent.

In a statement announcing the Scorecard's August update, Henderson called the stats noteworthy, "in spite of economic uncertainty."

A few highlights from the report:

• Renewable energy accounts for the lion's share of investments, at $1.54 trillion since 2007. Nearly $340 billion has been invested in efficiency and green construction, followed by $105.5 billion in clean tech and $161 billion in smart grid.
• Investments in corporate R&D grew to more than $258 billion, up from $163 billion tracked in February.
• For the first time, the report includes R&D investments under $100 million. This means that between 2007 and 2010, "thousands of R&D projects remained uncounted."

The next report will be released in six months. The August scorecard is available for download from GreenBiz.com.

Image CC licensed by Flickr user mikebaird.