August 1, 2012
In addition to my day job as an investment manager, I have several outside interests including acting as the external advisor to Washington College’s Alex Brown student run investment fund. It’s a great experience for me as well as providing the students with first-hand knowledge of how the financial markets act, and, in today’s world, why few actions can actually be anticipated. As they are learning from our discussion about monetary and fiscal policy, stocks don’t necessarily go up because of good earnings, and record low rates don’t necessarily jump start economic growth.
In our first class last year to set the stage for our program, I asked each of the students to write their favorite word anonymously on a sheet of paper. While answers ranged from sassafras to miasma to blue, I told them that no one selected what I believed should be the most important word to them. JOB.
A simple, three letter word that should be important to all of them! That’s why they are in school, that’s why their parents are paying the bills, or they have received a scholarship to get a JOB and repay the loans. But, in a world today where few actions and reactions can be anticipated, the job clock continues to click with shrinking opportunities for many.
In our global economy, corporations have poured billions of dollars into sustainability projects, seeking savings through energy efficiency and pursuing innovation in the field of clean technology. Meanwhile, government agencies have supported environmental initiatives of their own, touting the public benefits of a greener society. At the same time, the jobs debate has also risen to the surface with many questioning the long term impact.
Regardless of the 2012 election cycle, the question remains: how has the green movement impacted the pockets and perspective of the average American worker? To answer, we took an depth look with case studies in three spheres: green infrastructure, alternative energy, and electrical power. Each of these fields, respectively, the Empire State Building, the Marcellus Shale Region, and the San Francisco Bay Area provide visible examples of sustainability’s powerful capacity to generate well-paying and accessible jobs, even in tough economic times. The comprehensive work on the Empire State Building retrofit demonstrates the variety of projects—from window refurbishments to elevator upgrades—involved in green retrofits. Meanwhile, with the new natural gas drilling activity in Marcellus, an entirely new industry has come to life, profoundly affecting the jobs landscape in the region. Finally, the smart grid development in the Bay Area highlights the convergence of manufacturing and industry with new technologies in the field sustainability.
We have been reviewing all of these trends for over five years since we manage a hedge fund of funds with a diversified portfolio of strategies for accredited investors. Strategies include alternative energy, water, agricultural productivity, and many other sectors in the supply chain that reduce carbon emissions as well as repair and replace aging infrastructure. This portfolio approach focuses on the early stage of a long term paradigm shift to sustainability, a transition driven by two dynamic factors: the dramatic growth of global populations and the rising pressure on natural resources. We need look no further than the current drought in the U.S. farm belt.
In our recent study, we focus on job creation. Why?
The ability of the Green Collar movement to create jobs will considerably impact the attractiveness of investments and assets tied to sustainability. If environmentally responsible and infrastructure projects are shown to fuel job growth, they will be increasingly desirable to investors who support the public good through impact investments—namely, the government, private philanthropists, and socially conscientious asset managers—and are looking to enhance returns on investments. If new jobs are not created, the longer term outlook for global economies growth is not bright.
Meanwhile, sustained job creation could be an important indicator of dramatic progress and growth, as well as prospects for robust future growth. Job creators are likely to be today’s up-and-coming ventures or revolutionary mainstream corporations reshaping the business model, and tomorrow’s superstars.
Jobs is the dinner conversation in many households. Just Google the word “jobs.” 3,460,000,000 results in 0.33 seconds. Justin Bieber has 594,000,000 in 0.55 seconds while Barack Obama 572,000,000 in 0.28 seconds. What does that tell you? What do the numbers mean?
If you would like a copy of our current report Green Jobs: A closer look at where they are being created and why, please email us at http://www.terraverdecap.com/contact_us.html. Also, visit us at http://www.terraverdecap.com, or follow us on twitter https://twitter.com/terraverdecap (@terraverdecap). Or, feel free to call us at 212-218-7590, and we would be happy to provide you with additional information.