WFS PHOTO ILLUSTRATION / PHOTOS.

COM; CINDY MILLER (2007 TOYOTA PRIUS)

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Economics
Capitalism with a Conscience
Tipping point or Gold Rush? Socially responsible investing takes off.
nvestors have been putting money where their values are for at least the past two decades, but now socially responsible investing (SRI) has gained powerful new momentum, according to independent futurist Hazel Henderson in her most recent book, Ethical Markets. Economists, Wall Street analysts, and financial media have discounted the trend toward sustainable economies and socially responsible investing for two decades, she writes. Now, a tipping point has been reached in the growth of SRI and its robust rates of return. In the 1980s, SRI assets totaled about $40 billion, mostly owned by mainstream religious groups and charitable foundations whose values always went beyond the bottom line.

Today, the Social Investment Forum reports that values-based investors account for more than 11% of all investments under professional management. Driving much of the recent push in SRI are venture capitalists, whose forays into supporting clean and green companies surged in 2006, reports Henderson. Venture capital has always played a unique role in the U.S. economy, she says, spawning our rapid technological innovation during the industrial age. Venture capital fueled the dot-com

U.S., European Cleantech Venture Capital Investment

billions $4.0 $3.6

$3.0 $2.5

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$1.7

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Total U.S. and European venture capital investment in cleantech technologies and companies devoted to advancing sustainabilityreached a record $3.6 billion in 2006, representing a 45% increase over 2005, according to Cleantech Venture Network. Approximately 72% of this investment was in energy-related cleantech, according to co-founder Nicholas Parker, who cites high energy prices, growing awareness of global warming, and favorable public policies as among the factors favorable to venture capital investment in clean energy.

Source: Cleantech Venture Network LLC, 332 West Grand River Avenue, Brighton, Michigan 48116. Web site http://cleantechnetwork.com.

companies of the 1990sand investors lost trillions of dollars when this bubble burst in 2000. After languishing and licking their wounds, venture investors have now discovered the next big thingtechnologies needed to create more sustainable societies. There is fear about SRI becoming another dot-com bubble: The herd behavior of investors has initiated a rush, which may be too much, according to Nick Parker, who doesnt want to see a new bubble occur in cleantech, writes Henderson. Nicholas Parker is founder and chairman of Cleantech Capital Group, which sponsors regular Venture Forums attracting hundreds of capitalists. This next-big-thing mentality is one reason even venture capitalists like Parker are reluctant to associate their interest in green companies and technologies with SRI. The drive to invest in cleantech, Parker told The New York Times, is not the venture equivalent of socially responsible in-

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vesting. This isnt about creating a few shekels for a community group. It is about making money, plain and simple. The power of money to shape the future is clear to growing numbers of investors. Henderson quotes Wayne Silby, founder of the Calvert Group and co-founder of the Social Venture Network: When we invest our money, its like voting for the kind of world we want to create. Its expressing our values. Cynthia G. Wagner
Source: Ethical Markets: Growing the Green Economy by Hazel Henderson, with Simran Sethi. Chelsea Green Publishing, 2007. Approx. 245 pages. Paperback. $30. Available from the Futurist Bookshelf, www.wfs.org/bkshelf.htm.

Chinas Barriers to Growth

Laborer sleeps outside Beijing construction site. Despite its rapid growth, Chinas economy faces major challenges, including inefficient bureaucracy, corruption, and energy shortages.

hinas bright economic future with GDP widely predicted to exceed that of the United States before 2035still faces a few shadows in the near term. A new survey of international business leaders and futurists, conducted by Global Futures and Foresight (GFF) and Fast Future, identifies the biggest barriers to Chinas growth: Bureaucracy (identified by 41% of respondents). Corruption (32%). Energy shortages (22%). Lack of experienced managers (18%). Protectionist behavior in export markets (18%). Insufficient speed of market reforms (18%). Social unrest (18%). The reports author, Rohit Talwar of GFF, notes that, though the respondents did not perceive the removal of bureaucracy and corruption as key drivers of growth, their persistence in Chinese institutions is an impairment. The need to modernize the bureaucracy and a lack of transparency [make] it hard for outsiders to trust official statistics and local government actions, Talwar writes. One respondent remarked, There is little

transparency in big decisions linked to corruption at provincial and local levels. This leads not only to disgruntled local people but also to a negative impact on long-term investment. As energy demand increases with economic growth, supplies have been a major worry. However, Talwar reports that the bottleneck of coal, oil, and electricity supply has been alleviated. . . . There is an increase in coal transportation and output of electricity generation so fewer and fewer places have seen the blackout of electricity. Since Chinas increasing hunger for energy affects global supply, competition will drive up energy prices globally. Despite having made d e a l s w it h s u p p l i e r s s u c h a s Venezuela, Russia, and Iran, some respondents questioned Chinas ability to pay relative to rich Western nations, according to Talwar. Other concerns cited by the respondents include rising labor costs, transport problems, lack of available finance, and tensions over Taiwan. Cynthia G. Wagner
Source: The Future of Chinas Economy: The Path to 2020Opportunities, Challenges and Uncertainties by Rohit Talwar. Global Futures and Foresight (www.thegff.com) and Fast Future.

Listen to WorldFuture 2006

The World Future Societys 2006 Conference on Audio and Multimedia CD-ROM
Now available! A multimedia CD-ROM of more than 70 sessions covering all keynote and most breakout sessionsrecorded during the 2006 Toronto conference, WorldFuture 2006: Creating Global Strategies for Humanitys Future. Reproduced in crystal-clear digital audio, the nonsynched CD-ROM plays back on your computer. Includes MP3s and all available handout materials, such as PowerPoint presentations. $199 Also available: A full set of audio discs for playback on your CD player ($999) and individual sessions ($15 each). To view a listing of all sessions recorded, please visit the IntelliQuest Media Web site at www.intelliquestmedia.com. You may also click through from wfs.org/2006summary.htm or call IntelliQuest Media at 813-651-2585 to request an order form by mail or fax.

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