Under fire for its mismanagement of water resources in India, Coke has gone all out to create an image of itself as a leader in water conservation. Tools
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The Coca-Cola Co. is up to its old tricks again. The company, which is under fire for its mismanagement of water resources in India, has gone all out to manufacture an image of itself as a global leader in water conservation. Sections of Coca-Cola's Web site, for example, read like a proposal that a nongovernmental organization working on water issues might write.
Now, in an attempt to position itself as "aggressively" tackling the world's water problems, the company has come up with a new corporate social responsibility (CSR) initiative -- water neutrality. The company has already announced that it will become water neutral in India by the end of 2009 and that it has plans to do so in its global operations as well. Sure, it all sounds good, and who could object to water-conservation measures in an increasingly water-scarce world? But just what does becoming water neutral mean?
In a concept paper on water neutrality developed in November 2007 by the Coca-Cola Co., the World Business Council on Sustainable Development, World Wildlife Fund and others, it reads: "In a strict sense, the term 'water neutral' is troublesome and even may be misleading. It is often possible to reduce a water footprint, but it is generally impossible to bring it down to zero."
I see. Troublesome and misleading.
The concept paper also notes: "After having done everything that was technically possible and economically feasible, individuals, communities and businesses will always have a residual water footprint. In that sense, they can never become water neutral."
In other words, becoming water neutral is impossible.
And finally, the concept paper on water neutrality offers this: "Alternative names to 'water neutral' that have been suggested include water offset, water stewardship and water-use reduction and reuse. However none of these other terms seem to have the same gravity or resonance (inspiration) with the media, officials or NGOs as the term neutrality. For pragmatic reasons it may therefore be attractive to use the term 'water neutral,' but there is a definite need to be clear about precisely what it entails if reduction of water use to zero is not possible."
Just to be clear, we want to summarize what the concept paper on water neutrality has to say on the use of the term water neutrality. It is pragmatic to use a troublesome and misleading (but attractive) term like water neutrality -- which is impossible to achieve -- because it resonates well with the media, officials and NGOs. Welcome to Coca-Cola's world.
It doesn't really matter what the facts and reality may be. As long as it sounds good, no matter how misleading or troublesome the concept, they will market it to forge public opinion with the use of their mighty public relations apparatus. Coca-Cola announced its "water neutrality" goals in London and in San Francisco last week.
Little Drops of Misery
The International Campaign to Hold Coca-Cola Accountable for its abuses in India has been frustrated with Coca-Cola's increased public relations, under the guise of corporate social responsibility, to respond to the crisis that Coca-Cola has created in India. Communities living around some of Coca-Cola's bottling plants in India are experiencing severe water shortages -- due to Coca-Cola's extraction of water from the groundwater resource, as well as pollution by the company's plants.
Located primarily in rural areas, the hardest hit have been farmers who have seen significant declines in crop production, as well as women who now have to walk farther to access potable water. A study funded by Coca-Cola -- which the campaign forced it to agree to -- confirmed that Coca-Cola is a significant contributor to the water crises, and one of its key recommendations is that Coca-Cola shut down its bottling plant -- in Kala Dera in the state of Rajasthan -- where the community has been campaigning against Coca-Cola.
The study -- a damning indictment of Coca-Cola's water management practices in India -- concluded that the Coca-Cola Co. had sited its bottling plants in India from strictly a "business continuity" perspective that has not taken the wider context into perspective. It also warned Coca-Cola of worsening water conditions around its bottling plants, found an alarming increase in pollution as one got closer to Coca-Cola bottling plants and faulted the company on pollution-prevention measures, among others.
In typical fashion, Coca-Cola has chosen to ignore the findings of the study -- which it paid for and even participated in -- and is now insisting that shutting down the Kala Dera plant and leaving is not an option because the responsible thing to do is to stay and solve the problem because they are "problem solvers!"
Lies and Half-Truths: Coca-Cola's CSR
Last month, the Coca-Cola Co. released its 2007/2008 sustainability review, and surprisingly, critical issues facing the company's operations in India do not find mention in the review. Needless to say, the company gives itself high marks in its sustainability report. We can understand that mentioning the company's atrocious record in India would not look good for a company that is on a fast track toward manufacturing a green image of itself. But surely a company cannot just choose to ignore the fiercest battleground it faces when it comes to measuring Coca-Cola's sustainability?
Evidently, if you are Coca-Cola, you can conveniently choose to omit the most critical issues facing the company's use -- or abuse -- of water. The sustainability report must look good, and facts do not matter. One of Coca-Cola's champion projects in India to deflect attention away from the water crises it causes is rainwater harvesting, a traditional Indian practice.
Although the company started operations in India in 1993, it only had four rainwater-harvesting structures in 2001 -- definitely not a priority for the company. As the community-led campaigns against Coca-Cola's water abuses spread around India, so did Coca-Cola's championing of rainwater harvesting.
Today, the company claims to have over 200 rainwater-harvesting structures. Along with the massive publicity of their rainwater-harvesting structures (which, incidentally, the Coca-Cola funded study found to be in "dilapidated" condition), Coca-Cola also started making fantastical claims.
In Kala Dera, for example, the company claims to recharge (through rainwater harvesting) five times the water they use from the groundwater resource. In other words, they claim that they put back fives times as much water they use back into the groundwater resource. Forget water neutral, this would be water positive!
Yet, while they make this claim in a letter to the University of Michigan, they also note that they do not have any metering mechanisms in place to measure how much water is being recharged. If you don't have measuring devices in place to measure the recharge, how can one claim that they recharge five times the amount of water they use? If you are Coca-Cola, you just make it up. And the University of Michigan officials never even bothered to clarify this point. It sure resonates well with the media, officials and NGOs. And evidently, it seems to work.
Last month, the Coca-Cola Co. extended its partnership with the World Wildlife Fund to conserve freshwater river basins around the world, except India. Announced originally with much fanfare in Beijing in July 2007 as part of their Olympics presence, the partnership with the WWF is yet another attempt to deflect attention away from the real crises that the company creates in India.
Coca-Cola regularly highlights the partnership when responding to the issues in India. While we welcome any initiatives on water conservation, it makes no difference to the communities in India that are reeling from water shortages -- courtesy Coca-Cola. Conserving freshwater river basins in China and Guatemala do absolutely nothing to impact the depleted groundwater in Kala Dera and other Coca-Cola bottling plants in India. Water issues are local issues.
The list of Coca-Cola's initiatives to mislead the public is long and is well documented by the India Resource Center. The company has repeatedly publicized the Golden Peacock Awards that it has received for "environmental excellence" in India, for example. What the company does not tell you is that Coca-Cola is the primary sponsor of the organization that gives out the awards.
Water Neutrality -- A Scam
The Coca-Cola Co. is now embarking on its latest initiative to mislead the public -- announcing its water neutrality goals. Becoming water neutral is impossible, and Coca-Cola is very well aware of this. But matters like that have never stopped the company from making preposterous claims, however misleading and troublesome they may be. What is surprising, however, is the complete lack of scrutiny that Coca-Cola is subject to by the corporate social responsibility community and the media.
Allowing Coca-Cola to get away with such a disingenuous plan significantly weakens the core aims of corporate social responsibility, as well as objective reporting, and makes CSR nothing more than an extension of public relations for companies. If the Coca-Cola Co. were serious about being a good corporate citizen, it is well advised to begin by meeting the key recommendations of the study it paid for, and shutting down its plant in Kala Dera would be a positive first step.
Coming up with misleading and absurd terms like water neutrality is not going to make the difficulties of the communities in India go away. We need genuine changes in the manner in which Coca-Cola does business in India, not public relations initiatives like water neutrality.
Published in Alternet on dec 06, 2008
Sunday, June 14, 2009
Mumbai Buses Move to a New Fuel
The city buses in Mumbai, India’s economic capital, are now running on the biofuel being supplied by a Hyderabad-based firm. The State buses in Karnataka, too, will be powered soon by the fuel to be supplied from here.
Giaitech Fuels, a city-based firm, has signed a contract recently with Navi Mumbai Transport Corporation to supply 16.4 lakh litres of biofuel a year, reported Tushar Dhara for Express Buzz.
According to the news item, the fuel, supplies of which started yesterday, will power 265 of Mumbai’s suburban buses with biodiesel. The buses will run on a mix of 20 percent biodiesel and 80 percent normal diesel, a petroleum product.
Giaitech has also entered into an agreement with the Karnataka State RTC, offering to supply it 5 lakh litres every year.
Express Buzz says that India still has some way to go before biofuels are commercially available on a large scale as an alternative to fossil fuels. Giaitech has taken a big step on that road by persuading some State road transport corporations to run at least some of their buses on biodiesel.
Biodiesel is a non-petroleum fuel which can be made from vegetable oil. The raw material is waste, virgin or acid oil which are by products when refined cooking oil is manufactured. The process is simple and takes a few hours to convert vegetable oil to biodiesel. Gaiatech uses oil from pungamia seeds and mahua to make biodiesel. Their main manufacturing facility at Tiptur in Karnataka has a capacity of 12,000 litres a day and go up to 1.1 lakh litres a day.
Giaitech Fuels, a city-based firm, has signed a contract recently with Navi Mumbai Transport Corporation to supply 16.4 lakh litres of biofuel a year, reported Tushar Dhara for Express Buzz.
According to the news item, the fuel, supplies of which started yesterday, will power 265 of Mumbai’s suburban buses with biodiesel. The buses will run on a mix of 20 percent biodiesel and 80 percent normal diesel, a petroleum product.
Giaitech has also entered into an agreement with the Karnataka State RTC, offering to supply it 5 lakh litres every year.
Express Buzz says that India still has some way to go before biofuels are commercially available on a large scale as an alternative to fossil fuels. Giaitech has taken a big step on that road by persuading some State road transport corporations to run at least some of their buses on biodiesel.
Biodiesel is a non-petroleum fuel which can be made from vegetable oil. The raw material is waste, virgin or acid oil which are by products when refined cooking oil is manufactured. The process is simple and takes a few hours to convert vegetable oil to biodiesel. Gaiatech uses oil from pungamia seeds and mahua to make biodiesel. Their main manufacturing facility at Tiptur in Karnataka has a capacity of 12,000 litres a day and go up to 1.1 lakh litres a day.
US-India Agreement on Biofuels
A Memorandum of Understanding has been signed between the US and India to establish a framework of cooperation covering scientific, technical and policy aspects of production, conversion, use, distribution and marketing of biofuels in a sustainable and environmentally friendly way.
Eight specific areas have been identified for collaborative activities.
One aspect will be biofuel feedstock production based on sustainable biomass with active involvement of local communities through non-edible oil seed plantations on wastelands.
The production and development of quality planting materials and high sugar containing varieties of sugarcane, sweet sorghum, sugar and cassava will be emphasised.
And there will also be advanced conversion technologies for first generation biofuels and emerging technologies for second generation bio-fuels, as well as technologies for end-use applications in the sector based on a large scale centralised approach and stationary applications in rural areas.
There will also be projects for electricity production based on a decentralised approach through active community participation, use of by-products of biodiesel production processes, development of test methods, procedures and protocols, standards and certification for different biofuels and end use applications, promotion of technology transfer, assessment of joint policy and business models are other areas of cooperation.
The important role played by government, industry and research entities in both the countries in the area of biofuels development and the benefits expected from their potential collaboration, both the countries decided to cooperate in this field will also be recognised.
Eight specific areas have been identified for collaborative activities.
One aspect will be biofuel feedstock production based on sustainable biomass with active involvement of local communities through non-edible oil seed plantations on wastelands.
The production and development of quality planting materials and high sugar containing varieties of sugarcane, sweet sorghum, sugar and cassava will be emphasised.
And there will also be advanced conversion technologies for first generation biofuels and emerging technologies for second generation bio-fuels, as well as technologies for end-use applications in the sector based on a large scale centralised approach and stationary applications in rural areas.
There will also be projects for electricity production based on a decentralised approach through active community participation, use of by-products of biodiesel production processes, development of test methods, procedures and protocols, standards and certification for different biofuels and end use applications, promotion of technology transfer, assessment of joint policy and business models are other areas of cooperation.
The important role played by government, industry and research entities in both the countries in the area of biofuels development and the benefits expected from their potential collaboration, both the countries decided to cooperate in this field will also be recognised.
BHEL Commissions Two Solar Power Plants
Bharat Heavy Electricals Limited has commissioned two Grid-Interactive Solar Power Plants of 100 KWp each in Lakshadweep. With this, the company has commissioned a total of eleven Solar Power Plants in the Lakshadweep islands, adding over 1 MW of Solar Power to the power generating capacity of the coral islands in the Arabian Sea.
The plants have been set up at Chetlat and Amini islands of Lakshadweep. BHEL has earlier commissioned Solar Power Plants of various ratings up to 150 KWp at the islands of Agatti, Andrott, Bangaram, Bitra, Kadmat, Kalpeni, Kavaratti, Kiltan and Minicoy.
BHEL’s Solar Power Plants cater to about 15 per cent of the Union Territory’s energy demand and Lakshadweep boasts of having the country’s largest solar power-based island electrification project.
The Lakshadweep islands were wholly powered by DG sets using diesel transported from the mainland (Kochi), reports IndiaInfoline. Transportation of diesel is a cumbersome and costly process, largely depending on sea conditions. Continuous running of the diesel generators was also leading to noise and air pollution.
Besides, contamination of the ground water by the stored diesel was another concern which prompted the Lakshadweep Administration to opt for environment-friendly Solar Power.
The projects will greatly reduce the problems faced in transportation and storage of diesel, besides safeguarding the fragile ecology of the coral islands hitherto threatened by the use of diesel.
The Solar Power Plants supply energy to the main Diesel Generator (DG) grid which in turn powers the entire island including Tourist Cottages, Residential Houses, Cottage Industries etc. The Photovoltaic (PV) modules convert sunlight to electricity directly and using state-of-the-art Power Conditioning Units (PCUs), the DC power is converted to AC and synchronised with the diesel grid.
The SPV modules are manufactured at its ultra-modern manufacturing facility located at Bangalore. Starting from small applications like Solar Powered Street Light, Rural Water Pumping System, Railway Signaling, Offshore Drilling Platforms, BHEL has supplied and commissioned large size Stand-alone as well as Grid Inter-active Solar Power Plants in a number of major cities and remote areas of the country.
The Solar cells and modules manufactured are also exported to various countries like Germany, Australia and Italy. The company’s PV modules are certified to international standards by JRC, Ispra, Italy.
The plants have been set up at Chetlat and Amini islands of Lakshadweep. BHEL has earlier commissioned Solar Power Plants of various ratings up to 150 KWp at the islands of Agatti, Andrott, Bangaram, Bitra, Kadmat, Kalpeni, Kavaratti, Kiltan and Minicoy.
BHEL’s Solar Power Plants cater to about 15 per cent of the Union Territory’s energy demand and Lakshadweep boasts of having the country’s largest solar power-based island electrification project.
The Lakshadweep islands were wholly powered by DG sets using diesel transported from the mainland (Kochi), reports IndiaInfoline. Transportation of diesel is a cumbersome and costly process, largely depending on sea conditions. Continuous running of the diesel generators was also leading to noise and air pollution.
Besides, contamination of the ground water by the stored diesel was another concern which prompted the Lakshadweep Administration to opt for environment-friendly Solar Power.
The projects will greatly reduce the problems faced in transportation and storage of diesel, besides safeguarding the fragile ecology of the coral islands hitherto threatened by the use of diesel.
The Solar Power Plants supply energy to the main Diesel Generator (DG) grid which in turn powers the entire island including Tourist Cottages, Residential Houses, Cottage Industries etc. The Photovoltaic (PV) modules convert sunlight to electricity directly and using state-of-the-art Power Conditioning Units (PCUs), the DC power is converted to AC and synchronised with the diesel grid.
The SPV modules are manufactured at its ultra-modern manufacturing facility located at Bangalore. Starting from small applications like Solar Powered Street Light, Rural Water Pumping System, Railway Signaling, Offshore Drilling Platforms, BHEL has supplied and commissioned large size Stand-alone as well as Grid Inter-active Solar Power Plants in a number of major cities and remote areas of the country.
The Solar cells and modules manufactured are also exported to various countries like Germany, Australia and Italy. The company’s PV modules are certified to international standards by JRC, Ispra, Italy.
Study to Identify How Global Warming Will Influence Hurricanes in the Next Few Decades
An intensive study to examine how global warming will influence hurricanes in the next few decades has been launched by the National Center for Atmospheric Research (NCAR) in Boulder, Colorado.
As part of the study, researchers are homing in on the hurricane-prone Gulf of Mexico and Caribbean Sea to assess the likely changes, between now and the middle of the century, in the frequency, intensity, and tracks of these powerful storms.
The goal of the project is to provide information to coastal communities, offshore drilling operations, and other interests that could be affected by changes in hurricanes.
According to Cliff Jacobs, program director in the National Science Foundation (NSF)'s Division of Atmospheric Sciences, which is funding the project, "The outcome of this research will shed light on the relationship between global warming and hurricanes, and will better inform decisions by government and industry."
The project relies on an innovative combination of global climate and regional weather models, run on one of the world's most powerful supercomputers.
"It's clear from the impacts of recent hurricane activity that we urgently need to learn more about how hurricane intensity and behavior may respond to a warming climate," said NCAR scientist Greg Holland, who is leading the project.
"The increasingly dense development along our coastlines and our dependence on oil from the Gulf of Mexico leaves our society dangerously vulnerable to hurricanes," he added.The new study follows two major reports, by the U.S. Climate Change Science Program (CCSP) and Intergovernmental Panel on Climate Change (IPCC) that found evidence for a link between global warming and increased hurricane activity.
For the project, the model will examine three decades in detail: 1995-2005, 2020-2030, and 2045-2055. Scientists will use statistical techniques to fill in the gaps between these decades.
A major goal is to examine how several decades of greenhouse-gas buildup could affect regional climate and, in turn, influence hurricanes and other critical weather features.
Scientists will also investigate the impact of the powerful storms on global climate.
"Combining weather and climate models in this way enables more detailed projections of hurricanes in a warming world than any study to date," said Holland.
"These projections will help reduce the uncertainty of current assessments, and they also serve the very important role of providing experience about applying future predictions of changes to high impact weather systems in general," he added.
As part of the study, researchers are homing in on the hurricane-prone Gulf of Mexico and Caribbean Sea to assess the likely changes, between now and the middle of the century, in the frequency, intensity, and tracks of these powerful storms.
The goal of the project is to provide information to coastal communities, offshore drilling operations, and other interests that could be affected by changes in hurricanes.
According to Cliff Jacobs, program director in the National Science Foundation (NSF)'s Division of Atmospheric Sciences, which is funding the project, "The outcome of this research will shed light on the relationship between global warming and hurricanes, and will better inform decisions by government and industry."
The project relies on an innovative combination of global climate and regional weather models, run on one of the world's most powerful supercomputers.
"It's clear from the impacts of recent hurricane activity that we urgently need to learn more about how hurricane intensity and behavior may respond to a warming climate," said NCAR scientist Greg Holland, who is leading the project.
"The increasingly dense development along our coastlines and our dependence on oil from the Gulf of Mexico leaves our society dangerously vulnerable to hurricanes," he added.The new study follows two major reports, by the U.S. Climate Change Science Program (CCSP) and Intergovernmental Panel on Climate Change (IPCC) that found evidence for a link between global warming and increased hurricane activity.
For the project, the model will examine three decades in detail: 1995-2005, 2020-2030, and 2045-2055. Scientists will use statistical techniques to fill in the gaps between these decades.
A major goal is to examine how several decades of greenhouse-gas buildup could affect regional climate and, in turn, influence hurricanes and other critical weather features.
Scientists will also investigate the impact of the powerful storms on global climate.
"Combining weather and climate models in this way enables more detailed projections of hurricanes in a warming world than any study to date," said Holland.
"These projections will help reduce the uncertainty of current assessments, and they also serve the very important role of providing experience about applying future predictions of changes to high impact weather systems in general," he added.
India's Highest Court Orders Coke,
Coca Cola and Pepsi sold in India must carry a consumer warning after the nation's Supreme Court said tests of the soft drinks bottled locally turned up high levels of pesticides, a newspaper reported Tuesday.
The court gave the soft-drink giants' Indian subsidiaries a two-week deadline to come up with acceptable language for the warning labels, which will be displayed on the sides of cans and bottles across the country, The Indian Express newspaper said.
Last year, a New Delhi-based activist group, the Center for Science and Environment, claimed that pesticide residue levels in randomly selected Coke and Pepsi bottles were 30 to 36 times higher than norms set by the European Union due to the use of contaminated ground water.
The companies challenged the findings in court and a judge ordered tests.
Later, India's health minister announced the results of the court-ordered tests that showed nine out of 12 soft drinks produced by the Coca-Cola and PepsiCo operators in India did not meet European Union safety standards for pesticide residue, but were considered safe under local standards.
The newspaper reported that both companies pleaded against a court order requiring them to display a breakdown of all their ingredients -- a particularly sensitive issue for Coca-Cola, which has zealously guarded its secret formula, and once pulled its soft drinks from India after a government in the 1970s ordered the company to reveal its recipe.
In statements issued by Coca-Cola India and PepsiCo India, both companies said their products were safe and complied with all statutory requirements.
A statement from Pepsi said, "Our products conform to the highest international standards that ensure consumer safety."
Coca-Cola India said "We follow one quality system across the world," adding that "The treated water used to make our beverages across all our plants in the country already meets the highest international standards, including EU."
The court gave the soft-drink giants' Indian subsidiaries a two-week deadline to come up with acceptable language for the warning labels, which will be displayed on the sides of cans and bottles across the country, The Indian Express newspaper said.
Last year, a New Delhi-based activist group, the Center for Science and Environment, claimed that pesticide residue levels in randomly selected Coke and Pepsi bottles were 30 to 36 times higher than norms set by the European Union due to the use of contaminated ground water.
The companies challenged the findings in court and a judge ordered tests.
Later, India's health minister announced the results of the court-ordered tests that showed nine out of 12 soft drinks produced by the Coca-Cola and PepsiCo operators in India did not meet European Union safety standards for pesticide residue, but were considered safe under local standards.
The newspaper reported that both companies pleaded against a court order requiring them to display a breakdown of all their ingredients -- a particularly sensitive issue for Coca-Cola, which has zealously guarded its secret formula, and once pulled its soft drinks from India after a government in the 1970s ordered the company to reveal its recipe.
In statements issued by Coca-Cola India and PepsiCo India, both companies said their products were safe and complied with all statutory requirements.
A statement from Pepsi said, "Our products conform to the highest international standards that ensure consumer safety."
Coca-Cola India said "We follow one quality system across the world," adding that "The treated water used to make our beverages across all our plants in the country already meets the highest international standards, including EU."
Americans See Watershed Era for Environmental Investing
Americans see a golden age for green investing, according to the results of the second-annual survey on environmental investing released here today by Allianz Global Investors, a leading global investment firm.
Of the investors surveyed, 78% say we are likely to see more policies to promote business investment in new environmental technologies in the first year of the Obama Administration than we did under eight years of the Bush Administration. Further, nearly three-quarters (74%) believe the new Congress will be more supportive of policies to promote business investment in new environmental technologies than the old Congress.
"Barack Obama won this election on a platform of change, and the regulatory changes are likely to be very positive for environmental investing," said Bozena Jankowska, lead portfolio manager of the Allianz RCM Global EcoTrends Fund and head of the RCM Sustainability Research Team. "The type of stimulus President Obama is proposing represents a significant opportunity for investors. More broadly, the tone, intensity and content of the debate in Washington is changing and that’s what is really important."
Conducted for the second year in a row, the poll of 1,264 adults examined investors’ understanding of and attitudes toward the environment from an investor’s point of view. The poll was conducted via the Internet between December 12 and December 19, 2008 by GfK Roper Public Affairs & Media, a division of GfK Custom Research North America. Participants had to be age 25 or older and have primary or shared responsibility for investment decisions in households with financial assets of at least $100,000.
The sample was weighted to match the characteristics of the total online population in terms of gender, age, household asset level and region, according to the U.S. Census. The same methodology was used for the survey conducted December 14-20, 2007, which yielded 1,003 completed interviews.
Hope (and Confidence) Springs Eternal
Even though 2008 was a turbulent year for the broader markets, survey data reveal that investors are still generally optimistic, and they are particularly constructive on the environment. In fact, 72% of survey respondents say the recent decline in stock prices has had no impact on their inclination to invest in environmental stocks and about half (48%) of investors say they are at least somewhat likely to invest in these types of companies within the next year.
"The need for pollution control, clean water and energy efficiency is not going away. Investors perceive there is real opportunity here and they want to capitalize on it," said Brian Gaffney, Managing Director and Chief Executive Officer of Allianz Global Investors Distributors.
According to the survey, investors continue to view the environmental technology sector as a "buy," with 64% classifying the environment as the most desirable investment opportunity of the 10 categories surveyed. Further, there was a 30% increase from 2007 to 2008 in the number of investors who say they have already made investments in companies that are capitalizing on environmental trends (17% in 2007 versus 22% in 2008).
"Investors’ bright outlook on the environmental technology sector is telling. This is perceived as a long-term opportunity," said Gaffney. "Investors understand that robust demand for innovation and solutions will fuel growth, and consequently profits, for years to come."
Beyond the environment, investors are generally optimistic. Fifty-two percent say the Dow Jones Industrial Average will be higher a year from now than it is today.
Here Today, Here Tomorrow
Investors perceive that environmental issues will be long-lasting and thus present a large and enduring investment opportunity. Better than nine in 10 survey respondents (91%) believe that finding solutions to environmental problems will be a major issue for years to come, and nearly seven in 10 (69%) say it is important to look at investments in companies that are capitalizing on addressing environmental problems.
Addressing and solving these problems has become a top-tier concern of policymakers and opinion-makers. Social commentators and authors such as Thomas Friedman and Daniel Esty have opined there is tremendous opportunity to create economic value by innovating in the environmental space, and survey respondents agree. The survey found that nearly eight in 10 investors (78%) say environmental technology has the potential to be the next great American industry.
"Government investment in the environment and in alternative energy in particular, will be an important engine for economic renewal in the Obama administration," Jankowska said. "During his inaugural address, President Obama said ’We will harness the sun and the winds and the soil to fuel our cars and run our factories.’ This is a positive for the U.S. economy and job creation, and for the advancement of the environmental technology sector globally.
"At the same time, accelerating industrialization in emerging markets will continue to spur the need for environmental technologies. That has not changed despite the broader economic slowdown," Jankowska said. "We believe it’s possible that we are in the early stages of a long-term secular up-cycle for environment-related companies."
Even with current oil and gas prices relatively low, there is evidence that investors are now taking a longer view when it comes to the environment. Nearly all investors (97%) say that exploring alternative fuel sources for the future will remain important even if gas prices come down.
American investors see room for progress, and perhaps catch-up, at home. Fifty-eight percent say Europe is ahead of the United States when it comes to addressing environmental problems.
Seeking Help to Go Green
According to the survey, investors are eager to learn more about environmental technology and the related investing opportunities, and they are looking to financial advisors for help. Better than two out of three (68%) of all survey respondents agree they would need to consult a financial advisor for help investing in the environment.
Among those already investing with an investment professional, 78% say that even though the market has been performing poorly, they are still looking to their financial advisor to bring them interesting investment opportunities. However, 85% of those said their advisor had yet to recommend an environment-related investing opportunity. The securities of any single industry such as environmental securities tend to be more volatile than the stock market as a whole, and smaller companies may have limited operating histories and be at a more vulnerable stage of growth.
"This is a rapid growing and rapid-changing sector of the market, so investors are looking for help to smartly and profitably participate," Gaffney said. "Innovation in environmental technology is occurring at an increasing pace and on a global scale, so evaluating the opportunities may be difficult for individual investors. Financial advisors can help investors navigate the space and in turn, professionally managed products offer advisors access to experience, technical expertise and diversification in this complex sector."
Of the investors surveyed, 78% say we are likely to see more policies to promote business investment in new environmental technologies in the first year of the Obama Administration than we did under eight years of the Bush Administration. Further, nearly three-quarters (74%) believe the new Congress will be more supportive of policies to promote business investment in new environmental technologies than the old Congress.
"Barack Obama won this election on a platform of change, and the regulatory changes are likely to be very positive for environmental investing," said Bozena Jankowska, lead portfolio manager of the Allianz RCM Global EcoTrends Fund and head of the RCM Sustainability Research Team. "The type of stimulus President Obama is proposing represents a significant opportunity for investors. More broadly, the tone, intensity and content of the debate in Washington is changing and that’s what is really important."
Conducted for the second year in a row, the poll of 1,264 adults examined investors’ understanding of and attitudes toward the environment from an investor’s point of view. The poll was conducted via the Internet between December 12 and December 19, 2008 by GfK Roper Public Affairs & Media, a division of GfK Custom Research North America. Participants had to be age 25 or older and have primary or shared responsibility for investment decisions in households with financial assets of at least $100,000.
The sample was weighted to match the characteristics of the total online population in terms of gender, age, household asset level and region, according to the U.S. Census. The same methodology was used for the survey conducted December 14-20, 2007, which yielded 1,003 completed interviews.
Hope (and Confidence) Springs Eternal
Even though 2008 was a turbulent year for the broader markets, survey data reveal that investors are still generally optimistic, and they are particularly constructive on the environment. In fact, 72% of survey respondents say the recent decline in stock prices has had no impact on their inclination to invest in environmental stocks and about half (48%) of investors say they are at least somewhat likely to invest in these types of companies within the next year.
"The need for pollution control, clean water and energy efficiency is not going away. Investors perceive there is real opportunity here and they want to capitalize on it," said Brian Gaffney, Managing Director and Chief Executive Officer of Allianz Global Investors Distributors.
According to the survey, investors continue to view the environmental technology sector as a "buy," with 64% classifying the environment as the most desirable investment opportunity of the 10 categories surveyed. Further, there was a 30% increase from 2007 to 2008 in the number of investors who say they have already made investments in companies that are capitalizing on environmental trends (17% in 2007 versus 22% in 2008).
"Investors’ bright outlook on the environmental technology sector is telling. This is perceived as a long-term opportunity," said Gaffney. "Investors understand that robust demand for innovation and solutions will fuel growth, and consequently profits, for years to come."
Beyond the environment, investors are generally optimistic. Fifty-two percent say the Dow Jones Industrial Average will be higher a year from now than it is today.
Here Today, Here Tomorrow
Investors perceive that environmental issues will be long-lasting and thus present a large and enduring investment opportunity. Better than nine in 10 survey respondents (91%) believe that finding solutions to environmental problems will be a major issue for years to come, and nearly seven in 10 (69%) say it is important to look at investments in companies that are capitalizing on addressing environmental problems.
Addressing and solving these problems has become a top-tier concern of policymakers and opinion-makers. Social commentators and authors such as Thomas Friedman and Daniel Esty have opined there is tremendous opportunity to create economic value by innovating in the environmental space, and survey respondents agree. The survey found that nearly eight in 10 investors (78%) say environmental technology has the potential to be the next great American industry.
"Government investment in the environment and in alternative energy in particular, will be an important engine for economic renewal in the Obama administration," Jankowska said. "During his inaugural address, President Obama said ’We will harness the sun and the winds and the soil to fuel our cars and run our factories.’ This is a positive for the U.S. economy and job creation, and for the advancement of the environmental technology sector globally.
"At the same time, accelerating industrialization in emerging markets will continue to spur the need for environmental technologies. That has not changed despite the broader economic slowdown," Jankowska said. "We believe it’s possible that we are in the early stages of a long-term secular up-cycle for environment-related companies."
Even with current oil and gas prices relatively low, there is evidence that investors are now taking a longer view when it comes to the environment. Nearly all investors (97%) say that exploring alternative fuel sources for the future will remain important even if gas prices come down.
American investors see room for progress, and perhaps catch-up, at home. Fifty-eight percent say Europe is ahead of the United States when it comes to addressing environmental problems.
Seeking Help to Go Green
According to the survey, investors are eager to learn more about environmental technology and the related investing opportunities, and they are looking to financial advisors for help. Better than two out of three (68%) of all survey respondents agree they would need to consult a financial advisor for help investing in the environment.
Among those already investing with an investment professional, 78% say that even though the market has been performing poorly, they are still looking to their financial advisor to bring them interesting investment opportunities. However, 85% of those said their advisor had yet to recommend an environment-related investing opportunity. The securities of any single industry such as environmental securities tend to be more volatile than the stock market as a whole, and smaller companies may have limited operating histories and be at a more vulnerable stage of growth.
"This is a rapid growing and rapid-changing sector of the market, so investors are looking for help to smartly and profitably participate," Gaffney said. "Innovation in environmental technology is occurring at an increasing pace and on a global scale, so evaluating the opportunities may be difficult for individual investors. Financial advisors can help investors navigate the space and in turn, professionally managed products offer advisors access to experience, technical expertise and diversification in this complex sector."
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