BLACK VOICES
01/31/2014 03:18 pm ET Updated Jan 31, 2014

Sustainable Investments Are The Way Of The Future

JGI/Jamie Grill via Getty Images

Green means "GO" as far as investments exist. With a dire need for alternative energy as we exhaust natural resources, logic would indicate that a significant amount of investment will be needed to fuel future sustainability-minded companies.

“The entire world is developing environmental sensitivity because of the awareness that we share environmental risks so investments with environmental rewards are valued as socially responsible,” said Jamal Lucas, Partner at Lucas Smith Group, an organization that facilitates investments throughout developing Africa.

The range of investment options in the green sector are diverse and growing.

“If it’s important to you to improve energy efficiency within homes and workplaces, the LED lighting market is growing and shows no signs of slowing down,” said Lucas.

Consumption of LED lamps in the United States totaled $891 million in 2012. According to a new market report on “general lighting LED lamps” from ElectroniCast Consultants, the consumption value in this territory will reach $2.77 billion in 2017, representing an average annual growth rate of 25.5% (between 2012-2017).

“At the infrastructure level, there are smart micro grids, which are an ideal way to integrate renewable resources on a community level and allow for customer participation in the electricity enterprise,” said Lucas.

According to the latest report by GTM Research, Global Smart Grid Technologies and Growth Markets, 2013-2020, the global smart grid market is expected to cumulatively surpass $400 billion worldwide by 2020, with an average compound annual growth rate of over 8 percent.

DNV Business Assurance, a world leading certification body out of Milan, states that 68 percent of Central and South Americans, and 47 percent of Asians will invest in sustainability and increase that investment in the future. But the U.S. still has a long way to go.

“Considering all the growth forecasted in these areas in the next 10 years, I think the environment appears to be ripe for growth," said Lucas. "The biggest challenge may be spreading the message to American corporations.”

A collaboration between The Conference Board, Bloomberg L.P., and Global Reporting Initiative (GRI) Focal Point USA, Sustainability Practices: 2013 Edition, analyzes a total of 76 environmental, social, and reporting practices, including atmospheric emissions, water consumption, biodiversity policies, labor standards, human rights practices, and charitable and political contributions.

This annual analysis of the sustainability disclosure of business corporations found that, despite the increasing awareness of sustainability reporting standards in the United States, progress continues to be slow. Fewer than 20 percent of S&P 500 companies disclose their performance across a broad range of environmental and social practices. Large U.S. corporations—when compared to a multinational index such as the S&P Global 1200—lag behind on almost every indicator of non-financial transparency, including adoption of the Global Reporting Initiative (GRI) reporting framework and verification of company disclosure by an accredited assurance service provider.

As expected, smaller U.S. corporations are even less forthcoming, with only one out of ten companies in the Russell 1000 providing a fairly comprehensive report on these issues. But Lucas said these challenges can become opportunities for investment.

"These challenges can become growth opportunities if U.S. consumers and investors can influence Corporations to enhance their support for sustainability initiatives."

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