Research Aims and Objectives
The research aim of this study is to understand the role of investment funds focusing on the green economy as a tool for peace.
Objectives
The research objectives for this study with specific focus on Green Funds are
To understand concepts like peace, social and economic well being and potential of corporate in relation to peace.
To understand role of Venture capital funds as a catalyst of change.
To identify the factors influencing VCF and its influence.
To explore impact of such investment on different spheres of society and economy.
To identify its relationship with NGOs, Governments and role in global business environment.
To explore the potentials of VCF to achieve objectives of green economy.
Research Background
There are different forms of investments that are being done at individual, national and international levels. These investments are done in order to get returns from the same. In the recent past, there have been growing concerns over various issues of the global environment, depleting natural resources and changing climate. Due to this many of the research and investment has been directed towards dealing with such issues. The lack of resources leads to differences, disputes and conflicts. These can further expand to the war or war like situations.
According to Lipschutz, (2002) Peace is more than just the absence of war. It requires that the basic constitutive conditions of social life be broadly accepted within a society and depends on a social consensus over the terms of peace.
There have been various studies in different streams of education and academics that revealed the links of peace with economy, social studies and technological developments. Green economy is a well accepted concept of the present scenario that focuses on investments and directing the economic resources towards sustainable development and environmental friendly activities. According to Shekar Nguyen (2008)
A movement toward economic justice requires the mobilizing and organizing of the poorest people for greater economic and political power. A goodgreeneconomic model would surely be one where poor peoples labor has considerable economic leverage. Wal-Mart putting solar panels on its store roofs is not a solution, says Clarke. We need real solutions and strong measures-carbon taxes on imports from China would considerably reduce the incentive of cheap imports and make a push to produce locally. (Shekar Nguyen, 2008)
The inflow of green investment has impact on the projects and activities in different areas of environmental sustainable projects. The question on how these can contribute to the peace and welfare is a topic to understand (Reynolds, 2006).
Research Questions
What are the roles of government, NGOs and other agencies in promoting inflow of venture capital funds towards Green Funding
What are the prospects of fulfilling objectives of green economy through venture capital funds
How different social and economic factors can be affected by VCF and vice versa
How VCF can be catalyst to change the society globally through green funding
What are the current trends towards green funding and its related aspects
How green funding can be an effective tool of establishing peace in an economy and across the globe
Research Methodology
The research is based on qualitative research. The data has been collected from secondary resources. Electronic journals, books, libraries, websites of various companies, investment websites and others have been a source of information for the study. The study is based on systematic literature review. The effort has been to collect information from all the possible and reliable sources.
Research Rationale and Significance
The study is significant in various ways. It explores the avenues for where can investments be made by organizations and the operations of the same regarding an environment friendly operation.
Significance of study
We have just one planet which can sustain life.
Limited resources like non-renewable energy, natural resources, earth space.
The environment is depreciating in life sustainable capabilities at an ever increasing pace.
We need to understand our responsibly towards the environment and to adopt environment friendly system of working.
The content collected and detailed in this study should help make people more aware of the options that exist in the financial markets. The green economy is visibly emerging with opportunities. Green funds that exist as mutual funds, is one way to access it as these invest in socially responsible companies never taking part in unethical and immoral activities. This would for example typically exclude investing in gaming companies and tobacco. Funds that have made these exclusions have not only attracted attention but they have proved to be a good financial bet however limited the opportunities available. For the future this study should hopefully help fuel fund raising by presenting generalizations on the effectiveness of these investment vehicles from the literature presented.
Research Limitation
Data collection describes a preparation and collecting of data, and its purpose is to obtain and keep necessary and legitimate information for record creation. This will lead to help make educated interpretations regarding the issues presented. The data used in this thesis comes from secondary information, not primary, hence limiting the results on this basis.
Structure of Paper
The paper is divided in five main chapters and different subchapters. The first chapter provides an outline on research. This is followed by the literature review section, which explores the various aspects of the investment into the green economy and other concepts within related spheres. The research methodology section provides information on the research methods used in the study. The research findings section consists of the findings from various secondary sources. The last chapter provides a conclusion of the study.
Literature Review
Investment
Investment is an important term that is used in economics and financial studies. There is no single definition for this term. According to Dash (2009) investment has many meanings and is used differently in different scenarios. Three concepts of investments are economic investment, general investment and financial investment. The economic investment provides economic definition of investment which covers capital stock of the society. General investment consists of a generic sense that is linked with individual investments. The last is financial investment that consists of the financial claims such as securities and estate mortgages and others.
Venture Capital and Private Equity
A capital which is invested and provided by venture capitalists or firms, or individuals in a company is called Venture Capital. It can be used as a medium for long term finance. It can be also termed as Private Equity. These terms Venture Capital and Private Equity are interconvertible. A new and innovative idea is needed for the sustainable development. In the recent years, it has been observed that socially responsible investments are a better option for financing scheme. It seems that a commendable financial sector, called Venture Capital, is the new innovation.
In conceptual terms, Venture capital is a type of financial capital provision, usually in equity form, which is invested in high-risk ventures and which offers the possibility of significant gains to compensate for the risks involved in such investments, (Reid, 1998, p.14).
More broadly, VC refers particularly to investment made for the launching, early development or expansion of the business (Serge, 2000). Venture Capital can be considered as a recent phenomenon. In 1946 in the USA, the Venture Capital came into existence. In Europe, VC was arrived in 1970. Since then, various governmental mechanisms, such as tax exemption and subsidies, have enhanced the VC growth in many countries (in particular, the United Kingdom), which result in VC to become a strong source of financing (Bovaird, 1998).
Figure Venture Capital Fund Structure.
To finance start up companies, the mechanism available is Venture Capital. If there is a start up which wants to enter into the market and expand its business in the future, private equity is a better option. Its risk and mechanism sets it apart, not being the same as taking a loan from a bank. Most emerging start-ups, working with Venture Capital Funds, identify the appropriate projects so that they can minimize their investment risk. A research was done to evaluate the progress of different companies and it was found that Venture Capital backed companies had a faster growth rate than the other companies. The Green Economy investment is the result of the emergence of these types of investments.
Many attractive companies are looking forward to invest in the green investment sector. This green renewable sector will further generate significant job opportunities. In 2008, the United Kingdom announced a 100 billion investment to build 4,000 onshore and 3,000 offshore wind turbines by 2020. The proposal is expected to provide 160,000 jobs and attract firms looking to invest in the renewable energy sector. The renewable energy sector generates significantly more jobs than the fossil fuel sector (UNEP, 2008). Considering sustainable types of farming, the use of sustainable agriculture affects the soils, ecosystems and peoples. China increased its allocation of land for organic production tenfold from 300,000 hectares (ha) in 2005 to 3.5 million ha in 2006 (UNEP, 2008).
In the Venture Capital Industry, the three key factors are entrepreneurs, investors and venture capital managers. These three have different functions. The entrepreneurs want funding the investors play a role to invest in a Venture Capital, and venture capital managers work to choose entrepreneurs.
Investors, of course, are looking for businesses in which management can buy low, sell high, collect early, and pay late (Sahlman, 1997, p.103).
So it is a pressure on the VC managers to find suitable companies for investment. One thing to consider here is that VC is risky at some extent. This makes the venture capitalists to use adulterated investment decisions. They tend to place emphasis on the market attractiveness, product differentiation, managerial capabilities and competitive threats (Tybjee and Bruno, 1997).
Green investments are traditional investments in which underlying business are somehow involved in operations aimed at improving the environment. This can range from companies that are developing alternative energy technology to companies that have the best environmental practices (Nair, Shrijit et al).
There was a presentation given by Steven Herman on April, 15, 2009 on the topic Energy Capital Partners. The areas covered in this were
Private Equity
Renewable Energy Development Finance
The Importance of Public Policy
Herman (2009) explained that there are no definite definitions of private equity but in certain terms he defined
It is a wider term of referring to manage pools of capital which rise from private sources and also get investing in businesses whose equity is non- public.
Some of the private equity funds invest all over the world as for example KKR, Blackstone and TPG, however some of the other funds focus on other industries (like real estate, healthcare and energy).
Considerable time is 8 years to invest and value the existence of private equity.
It is a long term means of sources however, no liquidity to investors.
At last, economics mainly based on profits.
Later on in his presentation he compared private equity with Infrastructure funds, Hedge Funds and Venture Capital. He stated that the focus is on lower returns de-risked assets that are designed to produce a relatively fixed return for investors, pension funds and others who are seeking steady returns. Herman 2009. Regarding most Hedge Funds he pointed to their focus being on short-term investments with the high potential for returns, likely used in arbitrage, or as power tools. According to him hedge funds are advantageous for investments like Investors can pull out upon short-term notice and in general, partner economics mainly based on mark-to-market or mark-to-model profits. For Venture Capital he diverted focus on early stage mainly towards enterprises of smaller investment portfolio companies. Venture Capital mainly lacks in resources for capital investment.
Environment Management
Environment management is the process where in efforts are directed towards environmental sustainable goals. There are various activities like waste management, use of energy efficient machineries and automobiles, reducing non-biodegradable wastes, preventing use of plastic and adopting recycling practices are some of the activities of event management.
Environmental Sustainability
Environmental sustainability is a process wherein efforts are direct towards the efficient utilization of the resources, to preserve and conserve the natural resources and prepare the resources for the long term.
Different organizations, government and NGOs are working together in order to achieve the targets of environmental sustainability. Large corporate houses are adopting green measures, minimizing waste, recycling paper and plastic products and encouraging adoption of environmental friendly measures within the society. For example Hewlett Packard have focused on all its processes from the order of the product in the countrywide and international markets, purchasing power of individual consumers and other macro and micro economic factors and integrated the with the environmental sustainable goals of the organisation. The global citizenship is a larger project that requires more focus on the operational excellence, customer intimacy and product superiority. These things need to match the overall expectations of the society.
Graph 1 21st Century Corporate Value Proposition (Source HP)
There are investment and asset management organisation which provide information on the investments and their relation with environment. This consist of water, carbon emission, waste management, energy efficiency sector and many others i.e. Pluris Sustainable Investments, is a Swiss based asset manager whose investment universe falls into what is described as with care. The acronym WCARE stands for the sectors of interest. The investments in the environmental friendly projects and their returns before the recession have been very attractive particular to the energy efficiency and the renewable energy sectors. During the recession as well, the returns from these investments have been consistent.
Water InfrastructureTreatment
Water is an essential ingredient for life, a resource that is unfortunately limited. Its lack has been an ongoing issue, and quickly worsening with a growing world population. Currently, more than two billion people lack sufficient access to water, thus vast projects are urgently needed. Organizations like this are actively seeking to fund projects that positively affect the supply and demand side.
Carbon Emission Reduction
This is directly related to the reducing carbon emissions and their role in global warming. Because of the green-house gas burden, the organization is directing investment towards alternative sources. The effort to reduce Carbon emissions is also known as the Energy Efficiency Commitment. The objective of the same is to save energy, with focus on long lasting scenario indicators. There is great market potential for motors and machinery that emit less CO2. Financial measures have been set to control the carbon emission by many governments based on the Kyoto protocol. This allocates a level of carbon emission permitted to a business or organization. In the case the organization underutilizes it it can sell and or trade it through with some other company that wants to buy the same.
Agricultural sustainable growth
The sustainable growth standard ensures for the long-term productivity of the land as well as the improvement of the ecosystem. Ecosystems are what animals and plants depend on. The sustainable growth helps in protecting land and vegetation in a sustainable manner. The natural organic approach, optimum utilization of resources, recycling and improvement of the life and living standard of the people directly involved in the agricultural field are some of the aspects of the sustainable growth (Dore, 1997 Gold, 1999).
Renewable Energy
Renewable energy sources are one of the prime areas of energy research. The reason for its popularity is due to the exhausting of natural resources like petroleum products, coals and the like. Legislation from governments around the world requires its use in just a few years ahead. According to Zairilli (2003) the emergence of sustainable development and environmental considerations are important concerns in the energy sector. That is because energy has taken hold as the worlds number one commodity. Because electrical services are now a necessity, it supply is expected to be without any interruptions. However, resources are depleting and there is no choice but to seek for alternatives. Pluris stand is to invest in cellulosic ethanol, which is energy created from wood-waste, not from food crops. Investment is also geared towards concentrated solar power projects.
In a world were energy producing systems are outdated and inefficient, the opportunities are great. If starting from ground zero, the infrastructure needs to be examined as well as if it is private or publicly owned. In the developing world, energy liberalization has been driven by recognizing that the state is often incapable of providing the capital necessary to upgrade and maintain electricity supply systems against a background of rapidly increasing demand. Consequently there is a desire to attract private capital and unhinge it for it to reach market efficiencies. (Grimston, 2005)
An industry receptive to economic signals creates a sector more responsive to the use of taxes and instruments for the internalization of environmental costs (Kemper, 2002).
The energy investments are high investments and many companies, government organisation and non profit organisations working on the projects that are directed to achieve the objectives of energy conservations or working on alternate energies. There are significant challenges in enforcing the energy efficiency policies at national and international level. The incentives of the energy industry are fading due to the obligation of adopting efficient measures for the energy. Policy instruments are used to provide new framework for the economic goals of the economy. This trade-off between commercial motives and energy efficient policies has increasingly become important for the players within the market place.
Liberalized energy markets alone cannot be expected to meet the needs of the most vulnerable groups of the population or to protect the environment. Private companies, if free to choose, would most likely invest in utilities serving the cities and large urban areas and would cherry-pick profitable networks. Therefore, targeted government policies are needed to harness market efficiency in the public interest. (Zairilli, 2003)
Kemper (2002) states Energy liberalisation has the added advantage of making the energy sector more receptive to effective environmental policy instruments. The recent developments in the investment sectors for the energy efficient systems have opened new avenues in these liberalised markets for the investors. Various nations are also encouraging such investments in order to meet the growing energy needs and meeting the environmental goals with the same.
Fossil fuels are used for the production of different energy services. These are depleting sources. These require efficient use and conservation policies. Kemper (2002) states Economical energy efficiency has gradually been adopted as a common interpretation of energy efficiency actions. User at the gets benefits in various ways. They have many options in terms of selecting service and suppliers so that they get best service at best prise. Applying basic economics to speculated prices which may increase in demands. If a demand increases, than it could be failure of energy efficiency and energy conservation programs. Consumer wants very less to invest on energy efficient productions and energy accessories services as the cost of energy efficient products are always higher as for example CFL.
Based on the twofold conclusions of stronger market position for other energy sources and an imperfect investment environment another marker is revealed There is no guarantee that the liberalized market can foster diversification of supplies. The liberalized market cannot simply jump start or boost an energy source that faces so many unyielding challenges. (GPPI, 2007 pg 6)
The European energy policy (EEP) has focused on creation of harmony and liberation of energy and gas market and this market allow large number of private players of energy who can supply energy security among all members of state. Secondly they concern linked with environmental productions in order to decrease the consumption of energy and promoting new efficient technologies so that this can take place of fossil fuel consumption. The more versions of new and technologies renewable can cut imports and import dependency for the energy supply. (Belyi, 2003, Gilg, 2005)
Since July 1, 2004, all industrial and commercial users have been eligible and can freely choose their supplier. However, there is a great discrepancy between the legal market opening rate and the real one. Although it is difficult to evaluate the actual state of competition on a national gas market, given the large number of possible criteria involved, one can make an estimate based on the percentage of eligible customers that have effectively switched suppliers. In general, one observes that gas market opening is much less advanced in reality than in theory.
The Kyoto protocol helped it to set up principles according to the environmental and climate needs. Determination from all the member states is required to increase the cooperation among member states. According to Lecarpentier (2005) the EU energy security policy is based on two input conditions. These are the liberalisation and the Kyoto targets implementation. These have become field of action of the EU level. The
The EU enlargement stimulates the particular energy security policy in the regional sub-system, including the Pan-European area it reinforces the EU-Russia gas trade as a new strategic chapter and, meanwhile, it reinforces the security perception on Russian energy supplies and urges a need for a diversification of the gas supply. Consequently, the EU-Russia relations present new opportunities, related to an increased cooperation in the energy field a sub-regional Northern Dimension and the multilateral framework of the ECT, although both remain underdeveloped.. (Beyli, 2003)
In February 2003, the Energy White Paper Our Energy Future Creating a Low Carbon Economy set out a new framework for energy policy. It contained four goals
To put ourselves on a path to cut the UKs CO2 emissions the main supplier to global warming by some 60 by about 2050, as recommended by the Royal Commission on Environmental Pollution (RCEP),with real progress by 2020.
To retain the reliability of energy supplies
To sustain our industrial and business competitiveness
To ensure that every home is adequately and affordably heated
(UK ENERGY SECTOR INDICATORS 2006, pg 4)
The energy sector needed to manage for increased reliance on gas and oil imports and make sure that the marketplace delivers considerable and appropriate speculation in generating plant and networks so that households and businesses can effort electricity on affordable prices (Energy Review Overarching Initial Regulatory Impact Assessment July 2006). Government always determined to reduce the Carbon dioxide emission and has been worried regarding other environmental issues which are related to energy and energy sector. It has adopted Carbon impact of Energy Review, Climate Change Program Review and other measures. There has been declining in carbon allocation. The manufactured goods strategy enclosed the issues associated to minimum standards set and products according to new stipulation in order to manage Carbon have been delivered. Sufficient measures have been taken for the transport of energy including the renewable energy etc. All the activities or regulatory policies have limited time.
DeSombre (2005) has studied the environmental policies of US and EU and revealed that these two together are the largest producer for the greenhouse gas emission and this makes them responsible for directing their efforts and resources in order to minimize these emissions and setting examples for the world. DeSombre (2005) has explained the responsibilities of these two major players in the area of sustainable development and reinforcing environmental policies globally. DeSombre (2005) criticized the lack of commitment of these two countries in the area of implementing or reinforcing environmental policies.
Two of the major players in current international environmental politics are the United States and the European Union. Between them, these two actors account for almost half of the worlds GDP, consume a disproportionate share of the worlds resources, and produce nearly 40 percent of total greenhouse gas emissions. Understanding the ways of these two actors approach on the issues of global environmental, importance can most likely help to forecast and direct future environmental action at end authors in this thought-provoking edited volume attempt to explain the similarities and differences in EU and U.S. environmental policy. (DeSombre, 2005)
According to DeSomber (2005) these two federal governments are important and powerful in the environmental policy. The U.S. national government and the EU decision-making apparatus have pivotal role in directing the environmental policy. They are involved in various activities offunding, implementation, and enforcement. The European Union shares the responsibility with United States for research development assistance and sustainable development. However DeSomber (2005) criticizes that the global powers like US and EU, have not met their level of commitment in terms of implementing the environmental friendly and sustainable policies. These global giants perceive environmental protection policies as nontariff barriers for their aggressive desire of opening the world economy with limited nontariff barriers. According to (DeSombre, 2005) US and EU want to avail international exceptions for the policies they have to protect their local environments, social policies, and means of regulation
Burgermesiter (2009) have studied the strategies adopted by European Union and the learning US had with these policies. Burgermesiter (2009) emphasizes on the fact that US should be careful about promotion of renewable energy rather than simply following the European strategies for the same. According to the International Energy Agency (IEA) review a major failure of the European Unions green-energy policy is a dearth of investment in research and development of new green technologies, which, the agency says, will be crucial in providing abundant and inexpensive clean energy. (Burgermesiter, 2009)
The UN (2004) report stressed out on the need of countries making environmental friendly policies and encouraging investments in the areas of sustainable development and economic growth.
Creating a science and technology capacity that allows a country to meet its social and economic challenges requires the participation of a range of players, including academic institutions, RD centers, manufacturing enterprises, financial institutions and government bodies. Regulatory, legal and administrative policies have a large influence on those players and their interactions, and this in turn determines how knowledge and resources flow among them. The challenge for the Government is to create a policy environment and institutions that are supportive of technology development and diffusion. (UN, 2004)
New technologies have come up with different promises and hope for the future needs of the energy resources. Burgermesiter (2009) states wave buoys convert sea-wave energy into electricity, cellulosic bio fuels, dye-sensitized solar cells, and even third-generation photovoltaic (PV) modules that could bring the price of solar energy down to less than 20 cents per watt.
The United States national electrical network needs an enormous deal of investment before it can take up great amounts of renewable energy so that there can be continuous supply of power. President Barack Obamas recently announcement that of substantial investment in a new smart grid is a part of stimulus package and it could be a first step (Burgermesiter, 2009)
According to Burgermesiter (2009) the focus of U.S. government is more on the solar energy. It is developing as an energy option for the next generation. Solar energy is renewable and has more viable prospects among the energy options available for the future. This provides a lucrative renewable energy options and many of the projects are going on in this area of research. Solar energy is being used as an energy options in different types of activities from domestic purpose of cooking i.e. solar gas to the energy source for transportation systems like solar cars.
Europe has been a notable destination of the developments in the areas of non traditional energy sources. Denmark has developed wind energy sources to the level that it changed its position from importer to exporter of the energy services. The geographical conditions, wind speed and direction are favorable for Denmark. Government connected the private wind turbine to the national grid and ensured the constant supply of wind energy to the required areas.
INCLUDEPICTURE httpwww.finfacts.comirelandbusinessnewsuploadswinddec102007.jpg MERGEFORMATINET
Figure Wind Turbines Danish west coast (source Finfacts)
Green investments are the growing investment areas across the globe. The number of green projects is increasing consistently. It is in the form of investment in biodegradable products, to the new exploring and developing new sources of energy, for the biodegradable options of goods and others. Success of Denmark Wind energy set an example. The British Gas announced investment of more than 725 million pound sterling on the off the coast of Skegness in the wind farm of Linc. The investment of the wind farm investment was based on the fifty percent investment from the in the three wind farms. According to Tobin (2008)
With the help of new financing patter most important things which have been forgotten in the future development of Britains renewable energy requires. As according to experts the deal -- the first time that a private equity group has co-invested in a wind energy asset with banks -- was set to become the industry standard. German giant RWE is said to be considering a similar deal. (Tobin, 2008)
According to Ofgem (Tobin, 2008) the investments in efficient and new energy sources will increase in next few years. The investment will continue to grow in new power plants and energy storage facilities. The carbon emissions cut down is possible through the renewable energy resources. This would also provide an energy options for the future. The investment expected in next twenty five years is more than two hundred billions (Tobin, 2008).
Renewable Energy
Energy comes from natural resources is known as renewable energy such as wind, rain, tides, sunlight and geothermal heat and this energy are renewable. In 2006 near about 18 of global final energy utilization came from renewable, 13 came from biomass it mainly use for heating, and 3 came from hydroelectricity. Nowadays renewable energy projects and productions used in a large scale, renewable technologies are also suited to small off- grid, some I remote as well as rural areas where energy is regularly vital for human development.
Figure Total investment in top five countries
(Source Global Status Report, 2007)
There are eight areas of renewable energy identified by the World Economic Forum namely Solar Thermal Electricity Generation. Mature offshore wind, large quantity of renewable offshore wind, solar Photovoltaic Power (PV), sugar based ethanol, municipal solid waste-to energy (MSW) and Cellulosic and Next Generation Biofuels and geothermal plant.
Environmental sustainable properties
In the present scenario, major global houses and infrastructural projects are coming up with more environmental friendly solutions. The use of natural light and air in the new building and offices, use of environmental friendly methods and materials are some of major areas focused. Green and eco-friendly materials are used in constructions of green infrastructure. There are various related projects like city revitalization, waste management, transportation, solid water management, recycling of non-degradable products and others. These are areas of investments where funds are flowing in the form of foreign direct investments and investment by public and government.
Asian Development Bank (2009) is particularly focusing on the projects like carbon finance, energy, information and communications technology, transport, water and urban development. These are handled by the sustainable infrastructure division.
There has been increase in the popularity of green buildings and green products in the recent past. The increase in the popularity is due to various reasons like awareness of the environmental problems, desire of bringing change, controlling the waste and exploitation of natural resources are some of the main reasons of the same.
Though the idea of environmentally sound buildings is nothing new, the popularity of green buildings has increased in recent years, thanks in part to societys eagerness to combat climate change and limit the amount of corporate waste. As the pressure mounts for companies to launch green construction and retrofitting projects, risk managers would be wise to become familiar with the inherent risks (Holbrook, 2009).
According to Holbrook (2009) not all the projects on the environmental friendly base does not have risk or chances of failures. The example of this is The Bank of America Tower in Midtown Manhattan. This skyscraper tower has been designed in order to build the greenest skyscraper in the world. The height of the building is nearly 1,200 feet. It has 54 floors. The total area is 2.1 million square feet. The project started with nearly one billion dollar budget. The project was environmental friendly and the factors like insulating glass and its use, maximization of natural light and harvesting of rainwater was enabled in this project. The tower was build with the insulating glass from the floor to the ceiling of the building. The use of recycled material, availability of the pure and clean air are some the features of this tower.
The building is also made largely of recycled and recyclable materials, and not only is the air intake cleaned (as is the case in most buildings), but the air that is emitted from the building is also purified, which cuts down on harmful CO, gases thar buildings regularly spew into the atmosphere in massive amounts. With the Bank of America Tower as its emblem, New York is becoming a leader in green construction. But it still lags behind Washington and Oregon, which consistently rank as two of the greenest states (Holbrook, 2009).
However there were lots of issues which were argued over this project. The safety and comfort of the people was questionable and so was the funds invested in this project.
In the United States, Washington DC was the first that state that has adopted and enacted green building legislation. This made it mandatory for all the projects exceeding the floor area demand of five thousand square feet to follow this Leadership in Energy and Environmental Design (LEED). The design provides specifications for the construction as well as the renovations of the buildings. There are various other states where the law has been passed in the favor of green buildings.
In 2005, Washington State became the first in the United States to enact green building legislation. The law states that all major public agency facilities with a floor area exceeding 5,000 square feet are required to meet or exceed Leadership in Energy and Environmental Design (LEED) standards in construction or renovation. And going green is not just for major cities like New York, Seattle and Portland. In July of this year, Wilmington, Ohio became one of the first small towns in the United States to pass green building laws (Holbrook, 2009)
According to Holbrook (2009) the Green Enterprise Zone (GEZ) represents legally codified areas wherein it is a public commitment to involve in the green investment. This also has lower or reduced fees for LEED certified construction activities. The renewable energy installation is also charged less and exemptions are provided for that. In USA the projects of LEED are more than 14000. There are many projects undergoing in different countries. The numbers of countries are more than thirty. The inclination towards green constructions has increased in many folds. However the incentives given to people for adopting green measures are considered as the long-term boons as it will have implications on the future costs. The cost will be prohibitive once the charges are back to the normal. (Holbrook, 2009)
Questions also remain about the supposed financial savings associated with green buildings. The U.S. Green Building Council conducted research into the matter, eventually finding that a quarter of the new buildings that have been certified do not save as much energy as the designs had predicted (Holbrook, 2009)
Green Marketing
Green marketing is a process where in companies market their environmental friendly products and services to the target consumers. Green products consists of bio degradable products, organic food items, chemical less pesticides extracted from plant and animal resources and others. The large part of green marketing communication consists of information regarding the product or services. Consumer is given information on how particular activity is going to impact the overall environment in short run or how his decision will contribute to making sustainable growth.
Green consumption is a term that has come to mean all things to all people. In any one context, there are alternative discourses that surround alternative forms of green buying, which might pertain to a range of activities, from purchasing fairly traded tea bags to buying organic meat. (Gilg et al, 2005)
Gilg et al (2005) focus on the changing trend within the consumers communities. Some consumers are more likely to buy an environmentally sustainable or ethical solution for their need. This is the reason for growth of organic food or fairly food items. There are various incidences of consumer boycotts of products or companies involved in unethical practices. The list includes names like Shell, Nike, Reebok and others. Companies are treated as corporate citizen and are responsible for their activities to their society. Social welfare and sustainable growth has significant impact on the image and reputation of an organisation. The companies involved in experiments and efforts for environment-friendly solutions for consumer needs has better chances of sustaining competitive advantages and operating successfully in long run.
There are some activities listed by Gilg et al (2005) wherein consumer can be involved in green marketing such as purchasing of products or substitute with low environmental impacts like certain detergents developed that has low environmental impact. Consumers can avoid products with aerosols. They can be encouraged to purchase recycled products and can be involved in buying organic products. Consumers are usually interested on the fairly traded goods. The promotion of locally produced goods can help in sustaining the environmental goals. One of the important green activities is the purchase of less packaged goods. Packaging materials usually consists of paper and plastic. Paper is produced by trees and one of the major sources of raw materials for plastic is fossil fuel. A simple act of carrying ones own bag rather than using the plastic bag provided by the merchant can have larger impact on sustaining the environment.
Gilg et al (2005) argue that development of a sustainable lifestyle is a gradual process. Organisations need to focus on the term sustainable in their marketing efforts than the green itself, Gilg et al (2005) found out that behaviour and attitude of individuals vary with the demographic backgrounds. Ottoman et al (2006) on the other hand, identified various factors that can adverse the credibility green marketing can offer. The failure of understanding of factors like consumer value positioning, calibration of consumer knowledge, and the credibility of product claims may lead to spoiling the green market perspectives. Ottoman et al (2006) has studied the problems of the credibility of product claims of being environmental friendly and sustainable. The consumer value positioning deteriorates when false claims are made. Ottoman et al (2006) emphasis on designing the environmental products in such a manner these perform well from their nearest substitute. The promotion and delivery of value of the environmental products should be done towards relevant consumer market segments. The information regarding organic baby food will concern more to mother or care taker of babies than an office going bachelor. The appeal of the product can be enhanced by bundling the produced to other environmental friendly product like an environmental friendly detergent can be bundled with the eco-friendly or energy efficient washing machine or others. There can be fixed pricing schemes for subscribers of the non traditional energy users like renewable energy users.
Ottoman et al (2006) has discussed on the calibration of consumer knowledge. Consumers need to be communicated regarding various environmental products and product attributes. These can help in building the desired consumer value i.e. pesticide-free produce is healthier energy-efficiency saves money or solar power is convenient. Consumers need to inform about how the product can provide solution to their needs.
Companies can reach the consumers with various platforms and involve consumers and prospects for interactive session regarding the products. Tide Cold waters interactive Web site allows visitors to calculate their likely annual money savings based on their laundry habits, utility source (gas or electricity), and zip code location. (Ottoman et al 2006)
Companies can utilise social networking platforms for communicating and spreading word of mouth. Ottoman et al (2006) focuses on maintaining the credibility of Product Claims.
Employ environmental product and consumer benefit claims that are specific, meaningful, unpretentious, and qualified (that is, compared with comparable alternatives or likely usage scenarios). Procure product endorsements or eco-certifications from trustworthy third parties, and educate consumers about the meaning behind those endorsements and eco-certifications.
The websites are being used in a major way for communicating, involving, compelling, creating interest, entertaining visitor in educative manner (InfotainmentEdutainment). The Coldwater Challenge of Tide allow visitors to track their influence on their friend whom they send message for trying out the product and the number of friends who request for sample. (Ottoman et al, 2006)
Demeritt (2005) states in the article What makes a green consumer that Consumer purchases of green or sustainable products are not just motivated by the products themselves, but by the values they represent. For some consumers, these values do not translate into actual behaviour, while for others they become a way of life.
Today consumers are more concern about information and with the help of single click whole information are available for them. The availability of information and competition among various organisations attract variety of consumer groups and this make challenging for the companies to attract consumer and retain them.
This is actually influencing the way business has been done and policies were developed in the past. The environmental friendly products and services on one hands are receiving various promotions and regulatory freedoms, inflow of funds and investments for research and development. On the other hand the products and services with non sustainable practices of manufacturing or service providing, negative impact on environment is being prevented, regulated, taxes are imposed or complete ban on such products and services have been done. In many states across the world, there is complete ban on the use of plastic bags. These plastic carry bags are non-degradable and hazardous for the global environment. People are encouraged to use their own carry bags or buy biodegradable bags.
According to Gilg et al (2005) there are different ways a green consumer can be engaged in the product and services of any company. Gilg et al focused on personalisation of environmental issues. Citizens can be engaged in information sharing platform and trust can be build up.
An informed consumer would give priority to the value to the sustainable factor of the product. The value product is offering against the price consumer pays. This depends on various other factors. These are significant in helping consumer to make a purchase decision. These factors can be trade-offs pertaining to price, health, safety, buying locally and helping the environment, social concerns related to the product or service or company as a whole.
There are various ways through which a company can use green marketing efforts to attract green consumers and other consumers as well. Phillips, (1999 as cited in Prakash 2002) states that one of the poll report indicates that 87 of U.S. adults are concerned about the condition of the natural environment. This also enhances the significance of marketing communication procedure of the green attributes of products and the efforts companies to step on environmental concerns. There are various strategies which can be adopted by any marketer even in the traditional marketing and communication which can be incorporated with the present days technologies to spread the messages. Osterhus, (1997 as cited in Prakash 2002) States that 75 consider themselves to be environmentalists. The cultural icons, cultural issues and societal issues can be included in the strategy development and implementation processes. Prakash (2002) notes that Ottman (1996) states 80 of the respondents believe that protecting the environment will require major changes in current life-styles. Prakash (2002) states that some scholar believes that consumers will be willing to pay premium for the products having green attributes over the traditional products attribute like quality and price. Consumer communicated that their choice can make variation in altering life and its excellence and help world to make better place to survive. Company should also communicate itself as being grave leader for the environmental and technological concerns related to the world and industry. This will be extremely challenging to integrate environmental concerns. Companies require experimenting around as well as focusing on developing environmental friendly processes and communicate regarding it with stakeholders. The mix marketing strategies must be analogous to the conventional offers. The main focus on this should be the quality and pricing strategies. Phillips, (1999 as cited in Prakash 2002) states that 50 of Americans claim to look for environmental labels and to switch brands based on environment-friendliness. This is an indication of the shift in the traditional factors responsible for purchase decision of consumer. This is importance for environmental concerns and innovations. Some authors argue that the environmental innovations and concerns can not be compromise with the quality and service of product. They further state that even style should be maintained as it is important in the automobile products. The branding strategies of the green products should be as eye-catching as conventional products. Consumer should be informed about the choices available to him in order to make good and green choices. Other stakeholder groups should also be involved in the decision making and difference making processes. This can impose a competition within the industry and even the competitors have to adopt effective strategies. Emphasising on environmental concerns will help in creating environment of making green choices among consumer groups
Peace and Welfare Community
Peace is defined in different manner by different scholars and professionals. Some consider it absence of war some consider it absence of conflicts whereas for others it is the basic requirement of life to enjoy it. A situation that lacks peace results in different levels of problems from safety of individual rights to the right to live and earn decently.
Lipschutz (2002) has explains peace in the following manner, Peace is more than just the absence of war. It requires that the basic constitutive conditions of social life be broadly accepted within a society and depends on a social consensus over the terms of peace (Lipschutz, 2002).
The definition given to sustainable development is, Sustainable development is more than just the maintenance of resource flows it requires that members of a community come to some sort of agreement about the shared interests that override their individual ones and depends on having in place the social organization that is based in a framework that helps to facilitate social consensus and peace. (Lipschutz, 2002).
Population, peace and availability of resources are interconnected with each other. The estimated world population by the year 2030 will be somewhere near 7.7 billion. The growth in the population is exponential from the 1950s when the population was nearly 2.5 billion and to 2030, it is almost one and a half times higher. The growing population is exerting pressure on the resources of the earth. The fossil fuel supply is said to be exhausted by the year 2020. The high volumes of green house gases have been released from different domestic and commercial activities which continue to pollute the environment and risk all living species on earth.
The growth of population, increasing differences, poverty and lack of resources put people in situation of conflicts. According to Dale (2005) economic growth is the only thought to eradicate Poverty in modern world. Distribution of wealth from rich to is a too slow process of growth like Unemployment. Demands of good should be increased. There should be services on low interest rates for loan or investment. This can lead to more jobs opportunities and well form of growth like over population.
The proper economic growth can be considered as a part of the overall, if the development comes from economy as well as social sectors of the society. The economy is extension that encroaches too much on its surrounding ecosystem. It is possible to give up natural capital such as- fishes, fossil flues. These are more important than man-made capital i. e. example- factories, roads and appliances. These all are uneconomical growths. These help the rich section of the society and have least impact on changing conditions of poor. According to Shekar and Nguyen, (2008) U.S.A is one of the most uneconomical growth countries.
Defining and then refining green economics as a way to steer it toward bigger change is at the root of understanding the socio-political and economic possibilities of this moment. Van Jones calls for a historic approach, one that considers the world economy in stages of refinement. Green capitalism is not the final stage of human development, any more than gray capitalism was. There will be other models and other advances-but only if we survive as a species. (Shekar Nguyen, 2008)
Dale (2010) explained that the sustainable economy only in general terms, and this can maintained for an indefinite period as like bio-physical limits. To implement such an economy just need to specify what is to be sustained from year to year. Economists have discussed five factors like GDP, utility, throughput, natural capital and total capital. Total capital consists of the sum of natural and man-made capital.
Sustainable development and Peace
Lipschutz (2002) argues that Sustainable development is not simply making the resources last It depends on having in place the social organization that is based in a framework that helps to facilitate social consensus and peace.
There are various ongoing debates on the issues of sustainable economy. Some argue that sustainable economy should sustain the growth rate of GDP. It is clear that sustainable economy growth is equal to the growth of economy. The other fact to be considered is if sustained growth is feasible. Many economists tried to define sustainability in terms of constant GDP but its proved problematic because GDP conflates qualitative improvement of development with quantitative growth (Dale, 2010).
The sustainable economy growth rate has been slow of stagnant for some time but it was never negative. The major idea behind sustainability is to move the lane of development from enlargement. However, this is not sustainable for the development and peace (Dale, 2010).
This does not mean, of course, that global peace or governments are irrelevant they are a very necessary part of a comprehensive formula. It does mean, however, that if sustainable development is to become more than a mantra, it must address the specific needs of people in specific communities through their own collective and collaborative efforts (Lipschutz, 2002)
Therefore there is strong relationship existing between sustainable development, economy and peace.
The business goals and environmental goals do not go along with each other. The main motive of any business is to operate profitably and to serve the stakeholders. Commerce, trade and investment and the exchange of ideas and knowledge, business has become an integral part in culture and people. In the present scenario, the trends have been changing. Communities are looking at the business houses to show more respect and understanding to their community. Business success has much to do with a companys ability to understand and respect the communities in which it works.
Human being respect cultural diversity and many programs to support understanding and dialogue. The organizations has diverse environment in the present scenario. The process of learning to work together is not always free of tension and mistakes are made. But overall business has become critical force in support of culture understanding, building bridges between cultures and people by offering the prospect of economic opportunity.
The mission of the United Nations Alliance of civilizations and the role of business in supporting this agenda are more even more important as economic decline increase social tension. The challenges of the organizations across the world were intensified in the current context of a global financial crisis and economic downturn. The cross-cultural polarization could fuel the resentments. Rohatyn and Stanger (2008) argue, The globalization of finance, technology and information mean that the fates of countries and of individuals are interwoven in unprecedented fashion. The unraveling of those connections could be more disruptive and more devastating, and on a more massive scale, than anything we have ever collectively experienced
The recession is over. The global organizations are involved in various economic activities and looking for new avenues of business and growth. The international organizations and nations across the world have developed some guidelines and regulatory framework within which the companies need to work.
Companies can develop their sustainability plans according to their business, vision, mission and competitiveness of the market place. They formulate the sustainability vision and programs which are relevant for their business. This is very important that corporate sector of the economy understand their stake and role they can play to meet the global challenge of fostering intercultural understanding and dialogue.
It appears that businesses are grappling with the same cross-cultural challenges that governments and society are facing. To face these challenges, a number of companies are developing concrete, innovative responses to meet these challenges and to foster understanding and cooperative intercultural relations in the business environment. They are working to create inclusive environments in the workplace, to understand diverse customers, to cooperate more effectively with suppliers and venture partners in different markets, and to reflect the cultural values of communities in which they operate. A few companies have even made intercultural understanding a theme of their sustainability vision and social investment programs. Some common themes emerge about the role of business in promoting intercultural understanding. Because of its bottom-line imperative to bring people together to achieve a common goal, business can act as an important connector across divides, providing a forum for overcoming stereotypes, demystifying the other through dialogue, building trust and creating a sense of common purpose. Because of the growing need to manage diversity in a globally interconnected world, business is in some cases leading the way in learning to value difference and to create inclusive mindsets that reflect the perspectives of its diverse employees, customers and other stakeholders in society. As highlighted during the Istanbul Forum, a number of companies provide cross-cultural training programs and develop human resources policies in order to integrate diversity and inclusion in their business operations. To promote these issues in the marketplace, some companies have already utilized their core competencies. Contributions from business in improving stakeholder relations through culturally sensitive marketing practices and dialogues have proven to be successful at the community level Business representatives, the UN Alliance of Civilizations and the UN Global Compact recommend seizing the opportunity to promote intercultural understanding and dialogue on the sustainability agenda. This will improve collaboration among governments, business and civil society, in addressing environmental, economic and social challenges.
There is also a need to identify best practices in fostering intercultural understanding and dialogue and sharing those practices among a wide range of companies across the globe. In addition, business representatives recognizing the critical role of education suggested that governments and academia could support better educational programs for cross-cultural learning as well as exchange programs for young people. The UN Alliance of Civilizations and the UN Global Compact were inspired by the business communitys interest and support in establishing an affinity group composed of business, civil society organizations, and business associations. This group would provide partners with a platform for discussing relevant private sector activities, opportunities for partnerships, and sharing best practices
Green Ventures
Green ventures allow investments in the ventures where companies, industries, government or private labs are trying to develop or improve a green technology and are involved in environment friendly activities. These investments are part of the larger investments company does. These are careful decisions of the investor. These investment decisions are bound with ethical framework of an organization. These are also known as ethical investing socially responsible investing or green investments. Investments in green ventures can be done in various ways. Companies can invest in development and growth of agriculture sector in the form of development of organic food. Organic food items have created its niche in the market place. One of the reasons of high level of acceptance of such food is the direct impact on the body. Organic food items are produced without using any artificial fertilizers, pesticides or genetically modified seeds or plants. The perceived direct implications on the health have helped in growing popularity and acceptance of organic food across the world.
Figure Investment Universe
Source The Green Fund Presentation (Pluris Investments, SA)
Green Economy
Green Economy is policy driven activity that includes all the activities linked with the environmental sustainable and environmental friendly projects. These imply on all the activities that either is directed to efficient use of resources or conservation of the resources. The efforts of reducing pollution and sustaining environmental growth come within this topic. This is a vast topic with many implications on the overall society, local and global environment.
The Green Economy Initiative will encourage and enable economic, planning, finance, labor, environment, and other policymakers to support increased investments in environmental assets and green production while ensuring a fair and just transition towards a green economy. (UNEP, 2008).
According to Shekar Nguyen (2008) there are many implications of green economies on the future generations. This is a process where the problems and issues of current scenario have been identified and the efforts are being made for passing a clean earth to the coming generations. The investments in green economy not only affect our present but also our future and generations after that.
Green economics needs to be eventually policy-driven. If not, the greening of towns and cities will definitely set in motion the wheels of gentrification, Pinderhughes adds. Without a set of policies that explicitly ensures checks and measures to prevent gentrification, green economics cannot be a panacea for the ills of the current economy that actively displaces and marginalizes people of color, while requiring their cheap labor and participation as exploited consumers.(Shekar Nguyen, 2008)
Green economies are extension and improvement of the previous economies which were based on exploitation man and environmental resources (Shekar Nguyen, 2008). The labor will have considerable leverage in the green economy. The carbon taxes, taxes on the activities that are not environmental friendly, banning the manufacturing of the hazardous products and encouraging development of the environmental friendly substitutes are some of the significant aspects of Green Economy.
Greeneconomics can create a momentum-a political moment akin to the civil rights movement. But unless workers are organized, any success is likely to be marginal. So the key problem is in organizing a political base, adds Clarke. (Shekar Nguyen, 2008)
Green Funds
Green fund are mutual funds and this invest in socially- responsible companies which never take part in unethical or immoral activities. As according to rule of thumb, it is different tobacco and gaming companies. Mutual funds only invest in companies generally who all are deemed socially aware in their business as well as in their dealings or environmental responsibilities. Green fund can be come in the form of investment means for big companies who mainly engaged with environmental business as like alternative energy, green transport, water and waste management and for suitable living. Green funds strategy based on company criteria (Businesses such as guns, alcohol, gambling, pornography, animal testing, etc.), on other positive side (environmental programs, energy conservation, fair trade, etc.), or a mixture of both strategies. Still performance is not clear whether green funds and social responsible investment can create better return. Social awareness is increasing. This has increased worldwide as well as increased federal funding for energy and for other programs.
Green fund is a mutual fund or an investment in other forms that has been directed to be invested only in those companies that work for the social benefit and directly or indirectly promote environmental responsibility in their business dealings. The strategy behind generating the concept of green funding is to suppress the rise of negative companies and to promote the growth of positive companies. Negative companies basically include businesses such as guns, alcohol, gambling, pornography, animal testing industry and many more. Positive companies is the term coined for environmentally supportive businesses such as alternative energy, green transport, water and waste management, fair trade and sustainable development.
Globally, environmental management practices are aimed to promote community welfare by sustainable development of the economy as a whole. However, major hindrance to the successful operation of these practices in various countries is the lack of knowledge and financial support. Therefore, to support environmental sustainability, the governments of various countries have started green ventures and funding environmental projects. The funds are provided at different government levels central, state, local, government offices and regional local development agencies. These funds constitute some percentage of the economic stimulus package that is allotted by the government for social and economic activities to promote economic growth of the country at tax rebates.
The major areas for which funds are unobjectionably provided are development of energy efficient infrastructure, increased use of renewable sources of energy, prevention of greenhouse gases and carbon emissions, methods for conservation of water, development of clean technologies, bio fuels and development of green infrastructure for roadways, waterways and railways.
Other than green funding, numbers of innovative ideas have been introduced to facilitate sustainable development. These will be discussed in detail.
Green Venture Capital
Although the concept of funding environment supporting companies, businesses or programs has achieved success in near past but still many companies that are ecology oriented remained under funded. To solve this problem, an innovative approach known as Venture capital has been emerged which has drawn the attention of important financial sector. Our area of interest is to discuss about environment-related VC (or green VC).
Venture Capital is not a very old phenomenon. The VC industry was originated in US in 1946 and then in 1970s, the industry was established in Europe. After that, various government policies such as tax rebates and exemptions, subsidies have been launched due to which VC growth was observed in many countries. This made VC a strong financing source for several business activities. Venture Capital is defined as
venture capital is a type of financial capital provision, usually in equity form, which is invested in high risk ventures and which offers the possibility of significant gains to compensate for the risks involved in such investments (Reid, 1998, p.14)
Venture Capital is mainly meant for start-up businesses. The lead players in venture capital industry are entrepreneurs who require finances, investors who make investments in the business of entrepreneurs and VC managers who decide which entrepreneur is to be funded so that hundred percent returns on the investment is assured.
Since, the idea of VC was originally generated for sustainable development of the economy, therefore, now this investment is directed towards eco-innovations. The investments are made in businesses after considering the fact that there is positive link between environmental and social activities performed by the companies and their financial performance. Green VC is a kind of SRI (Socially Responsible Investment) that inhibits the growth of negative activities of the companies. The criteria on the basis of which companies are judged among their sector, for investment to be made are environmental policies and programs carried out by the company, environment management systems incorporated, the use of renewable resources, relationship with suppliers and stakeholders etc.
However, the same selection criteria can not be implemented for environment related VC because during start-up, environment oriented firms come up only with the idea or innovative approach for making new product or service for social benefits. Initially, these firms are comprised of only two to three people they have no management systems, supply chain issues and environmental or social impact reports. Therefore, these businesses are needed to be judged on the basis of their foreseen future performance rather than actual performance.
One of the approaches that can be useful to foresee the future impacts of the product or services, which will be ultimately generated by the firm, on environment and society is eco-innovation. Eco-innovation is defined as the measures undertaken by firms, politicians, unions, associations, churches or private households for development of novel ideas, processes, products and services and finding its application in reduction of ecological burdens and to meet defined ecology sustainability targets.
A most obvious example of eco-innovation funded by VC is the production of wind turbines for electricity generation. Investments on production of wind energy come under green VC investment because of its environmental benefits wind is the renewable source of energy and there are zero emissions of GHGs while using turbines. Moreover, commercially wind energy has shown significant progress in last few years as compared to other renewable technologies that has been emerged. Today, wind energy is giving competition to all forms of fossil fuel based power generation and is much cheaper than nuclear power, also it is estimated that the costs of wind power will decrease up to 45 in next 15 years (Turkenburg, 2000).
In spite of growing innovative technologies developed by environment oriented companies, there is large difference between the VC incurred in mainstream industries and green industries in USA and Europe. According to the findings of EVCA (European Venture Capital Association) in 2001, the investment of VC in mainstream companies such as communication, software, IT was 154 billion Euros while that in green companies such as renewable energy, water and cleaner technology equipment, it was 100 million Euros which was 0.08 of the size of mainstream VC investment. Also, there were around 1600 VC investments made in mainstream industries whereas only 45 VC investments were made in green industries which were 4.5 of the number of mainstream VC investments. The most important points that need to be focused is that the main source of financing mainstream industries were pension funds and banks whereas for green industries, it high net-worth individuals. (Randjelovic, 2001).
The data basically presents the huge difference between the mainstream and green VC investments. This difference is probably due to the difference in the time of ROI (Return on Investments) between the two it is generally 1-2 years in mainstream VC and 3-5 years in green VC. Other than this, people know less about the green companies therefore hesitate to invest. However, in coming future, green VC investments are expected to rise because the environmental risk factors are negligible and rather it adds on value to the environmental sustainability factors whereas the major risk factors that are accounted for deciding investments to be made or not in mainstream industries are future environmental and social implications.
The data collected by EVCA in 2001 states that currently green VC firms invest in wind, solar and wave energies, water recycling and desalination of ocean water, organic farming, fuel cells and novel and economical industrial processes.
It is expected that with the passage of the time, most of the problems faced by green VC investments will be resolved when the market view will be directed towards sustainability. At the same time some revolutionary innovations are required to be made in green industries that draw the attention of venture capitalists and assure high returns on investments.
Green Buildings
It is defined as the set of strategies and efforts employed to create, sustain and accelerate necessary changes in the practice, behavior and technology meant for reducing the adverse effect of buildings on environments and at the same time creating places that are healthier and satisfying for the people. The strategies include integrative design, use of renewable materials in construction, installation of water conservation measures in water supply systems, on-site renewable energy generation etc. There are various aspects of the green buildings or constructions. These have legal implications and have to have the safety and comfort levels similar or better than the traditional constructions. The safety and security of the inhabitants are important factor to be considered. Apart from these the business codes and other rules are also associated with the green buildings. These rules can be the liabilities for the future. Moreover this is a transition phase from one form to other therefore levels of uncertainties are there. Decision making process is affected by various factors.
Energy Efficient Infrastructure
Technological factors are vital for the industry leaders like Hewlett Packard. Hewlett Packard has been pioneering for declaration of new ways or processes to make the product environmental friendly and have small collision on the cost consumer will be willing to pay.
Graph 2 Benefits of Designing for the Environment (Source HEWLETT PACKARD)
Water projects
Green investments in water technologies includes the sewage treatment, energy production from the sewage which forms renewable energy, recycling of the waste water to make it drinkable and other re-use of the water. This is one of the major research areas as it leads to solving the drinking water problem of future and provides a prospective source of energy. Investment in water technology can help in achieving sustainable water supplies in future as well. Human needs water directly and indirectly for drinking, cleaning to agriculture. Water harvesting of rain water, water recycling and others are some of the most important projects for investment.
Usage of Expansion in Economic and Social Activities
There have been various views on the conservation of forests and investments in the grass root level. These investments have impact on the social and economic well being of the people in that particular society. Mohammad Yunus (2006) received Nobel Peace Price for his micro-credit lending based Grameen Bank project in Bangladesh. This allowed economic and social development of people at or below the poverty level. The implications of microcredit are empowered women and fight against poverty. Most of the members of Grameen bank are involved in the works that are directly linked with the nature like they keep cattle like goat, cow and sell milk and by products. These people are utilizing the natural sources in most natural ways. Poverty is one of the main roots of major social evils of the society. The empowerment of people at that level has various social implications in the society and in their lives.
Similarly the other notable Noble Prize winner Prof. Wangari Maathai identified the problem of plantation faced by women in Kenya and started her Green Belt Movement. This project helped in combating the deforestation problem in Kenya. The forest has been the oldest source for various resources for the people living at the grassroots levels. It provides wood and other forest products which they use for food, cooking, making handicrafts and useful household items that becomes their source of income. However, the deforestation led to the problems of soil erosion and shaken the balance of ecosystem and human relations in the areas.
The more I looked into the environment, the more I realized that what we were complaining about were the symptoms. And we needed to understand the causes of those symptoms. (Maathai, n. d.)
Green Belt Movement was started by a noble peace prize winner Wangari Maathai in 1977 to address the challenges of deforestation in Kenya. This movement has been a great success among rural women and families for encouraging them to plant more trees to fight against deforestation, poverty, ignorance, embedded economic interests of traders and government corruption. This movement has provided an opportunity to women of rural communities to emerge as a strong political force that has been responsible for the fall of 24 year old political dictatorship in Kenya.
The mission of the project is directed towards environment protection, fair political governance and peace of the society. The success of the project is evident from the fact that at present, around 40 million trees have been planted across Kenya, thousands of local forests are restored and thousands of women and their communities are living healthier and more productive lives.
Inspired by the role of Wangari Maathai in bringing Green Belt Movement into practice, Alan Dater and Lisa Merton have made a dramatic narrative documentary Taking Root The Vision of Wangari Maathai to tell people across globe about one womens role in the turbulent political and environmental history of her country. This documentary is rooted at guiding people regarding what all issues (environmental or social) are required to be observed in neighborhood or community and steps that can be taken to solve these problems. All these issues are discussed in the film by giving reference to the life of Wangari Mathaai. She was a rural woman and founded the movement by reconnecting her life with the life of other rural women and their problems. At that time, the problems faced by them were going to far-off places to collect firewood, scarce water, soil erosion and malnutrition then Mathaai suggested solution to all these problems just in one sentence Lets plant trees.
We said if you plant a tree and the tree survives, the movement will compensate you. And this motivated the women. So they started very, very, very small. And before we knew, the tree nurseries just started mushrooming.
-Wangari Mathaai
The film also includes various suggestions, activities, tips and resources (both serious and funny) to deal with problems around you. These small steps can bring about big changes in future.
The little, little, grassroots people, they can change this world.
( Lilian Nj ehu, Kanyariri Mothers Union Tree Nursery)
The film addresses various questions that can click the mind of the people to think. e.g.
How do trees make you feel
Which part of your neighborhood or town dont have trees and why
It also suggests various resources for looking at the nature, type and number of tress around you, e.g. online websites maps.google.com, how to look at tree canopy of your area on this website. Other links o get connected to people by writing an reading blogs on trees, link to access tree journal are provided. The film also gives detail about other tree planting movements working in various parts of the world, such as Guerilla Tree Planting, The concept of right tree in the right place is also discussed in the film. Naobi Kabura Mukunu, the chairperson of Kirangari Mwireri Womens Group said
Trees bring rain. When they sway in the wind they purify the air. When the leaves drop to the ground, they hold the soil no matter how hard it rains. I was sure planting trees was good for my needs. I give young men lumber to build their houses, too. (Wangari Mathaai)
The film also mentioned contacts and links to various non-profit organizations that are working on the project of tree plantation. Some of them are Abor Day Foundation, American forests, Green Belt safaris, U.N Environmental Program etc.
The film also presents the wisdom of Wangari Mathaai. Her core philosophies in solving community problems are
- Connect tree issues to community problems
- Connect local issues to regional and national issues.
- Connect problems to systemic causes.
Above all, the film presents the importance of Green Belt Movement in reminding people that everyone has the right to live in healthy environment and to take actions that determines hisher well being and livelihood. The Green Belt Movement focused on areas like networking of people, advocacy of cause, environmental education, tree planting, forest conservation, and prevention of deforestation, Green Belt safaris and bringing change by women and to womens life. The project helped the inhabitants to protect the economy and culture and grow.
Reduction in Green house gases and Carbon Emissions
International attention on the reduction of the green house gases and carbon emission has attracted investors towards investing in such projects (Kyoto Protocol, 1997 Garnault Climate Change Review, Carbon Pollution reduction scheme, EU Emission Trading Scheme and others). There are some systems evolved that allow companies to sell and buy carbon credits in a trading platform. The system known as Cap-and trade system allows this. The market based mechanism regulates the carbon emission of companies across the world (Stavins, 2001). There are emission trading systems developed in US, UK and other countries in order to control the pollution and provides economic incentives through reduction of the carbon and other pollutant emissions (Stavins, 2001).
Figure Reduction of Greenhouse Gases
Source DWS
Development of Green Vehicles
One of the main areas of green investments in the recent past has been in developing energy efficient systems and automobiles. This is a vast area of research. The automobiles based on fossil fuel are the major source of air pollution. The hybrid cars in the present scenario are the progress towards achieving environmental friendly transportation options.
In the US alone, Honda and Toyota have introduced hybrid vehicles. Toyota has launched its Prius to the American market in the year 2000. Honda was already selling it hybrid two-seater Insight model in the U.S. since 1999. U. S. sales in Hybrid vehicle industry grown up over 570 percent by year 2000 only. There are more hybrid vehicles models were introduced by the key players in the market place. However the dominating hybrid models in the US market have been the Toyota Prius, Honda Insight, and the Honda Civic Hybrid.
Toyota will offer a Li-ion plug-in Prius to fleets in 2010 and to the public in 2011. It would be a mistake to under-estimate the importance of plug-ability for the serious eco-road-warriors. For green halo seekers, nobodys going to know whether your Prius is a plug-in or not, except for the port and attending badges. An aftermarket in fake plug-in ports (and badges) is as assured as the current market for fake Buick Lucerne portholes. (Niedermeyer, 2008)
The hybrid cars offered fuel efficient and better mileage. These cars overshadowed the traditional fuel based automobiles with these two factors. However, the prices of these cars are usually high.
Clean Technology
Clean technology refers to the energy efficient, low pollution products of everyday use of people in general. These are part of daily life of individuals across the world. CFL tubes are much expensive than one yellow bulb. However, CFL is more energy efficient than the yellow bulbs and demand for convenient production increased at the cost of energy efficiency.
Price signals are the most important drivers in energy efficiency development. When energy prices fall, consumers are less likely to initiate energy efficiency investments due to poorer project economics. Fewer new technologies are economical. On the contrary, lower energy prices fuel demand for energy. Liberalisation in one energy market such as electricity may change relative prices between energy carriers and cause substitution effects, which may significantly escalate demand for electricity. (Kemper, 2002)
Figure Clean Technology and Fund Investment
Source DWS
Conversation of Resources
There are various conservation projects for natural resources that can lead to the sustainable development. There are various resources like land, water, energy, forests and others. Conservation of natural resources helps in wise utilization of resources. This helps in sustainable development.
Peace and Economy
It is well known that we are part of the world that is growing unsustainable day by day in every way. Most of the businesses in current scenario, are striving to earn short-term economic profit at any cost without considering environmental issues. Also, the governments of most of the countries ignore environmental issues until their native country is affected by it directly. Continuous environmental degradation from several decades now has lead to adverse climatic changes such as global warming. This has made it mandatory for businesses and governments to promote those factors that let sustainable development of the economy through sustainable production and sustainable consumption.
Lipschutz (2002) have linked peace and sustainable development and states that this can be realized within the context of specific communities. Sustainable developmental goals can be achieved when a community works together towards a common goal. Global peace and role of governments in this process is very significant. However one strategy working on one particular area, not necessarily works on the other area. The inclusive and democratic environment is the basic requirement for achieving goals of sustainable development and social peace (Lipschutz, 2002). Peace also has its dark and bright sides. Peace on one hand signifies stability, a condition where management is good conflicts are resolved in time before they can result in disturbing peace, consistency of the relationship among various stakeholders of the society. However the negative side of peace is that it is identified with the absence of turmoil, tension, conflict and war. (Lipschutz, 2002).
Today, people across the globe are finding the concept of sustainable development highly significant to curb further deterioration of the environment and to secure it for future generation. All the companies, firms and organizations have understood that the profit has to be earned but in a way that is socially, economically and most importantly environmentally acceptable. This understanding has given rise to the concept of triple bottom line which means generating economic value and at the same time taking care of environmental and social responsibility. This activity of producer comes under sustainable production.
The term sustainable consumption is equally important for promoting sustainable development. It is a way to give reward to businesses and governments that are putting efforts for sustainable development. The consumer is required to have the ability to make choices regarding what to consume and what not to consume. For making sustainable choice, the consumer should be educated. If the end consumer will be educated, they will be aware of the potential benefits of environmental friendly products and the harms of other products, therefore will go for high price high value products rather than low price low value products. For example, brand such as Bodyshop has made the consumers aware of ethical purchase by including issues such as no animal testing in the advertisement of the products. In 1980s, this was the first brand to raise concern among people to buy ethical products i.e. those which have not been tested on animals. After that, many brands acme up with innovations and scientific proof for how their product is different and better than others. In this way, sustainable consumption plays an important role in the development of innovative products.
Unless both social peace and projects of sustainable development are conceptualized and implemented in these terms, and strive to be inclusive and democratic, they will be hard put to succeed. Peace is not simply bringing an end to war Its sustainability also depends on a social consensus over the terms of peace (Lipschutz, 2002)
United Nations has launched UN Global Compact in 2000 with the objective to carryout businesses with environmental peace. UN Global Compact laid down strategic policies for businesses which are ready to operate in accordance with the 10 universally accepted principles framed for the protection of human rights, labor, environment and corruption. It means that businesses should adopt policies and strategies that do not violate human rights, clean and safe working conditions should be provided to workers, the environmental impact of business operations should be taken care of and corruption within or outside the organization should be avoided. Such businesses are finding great opportunities for growth from government in the form of subsidies on raw materials, easy licensing, tax rebates etc. Even workers avail the benefit government provides them with houses to live, open school for their children and gives them training to become skilled. Investors, communities and whole society directly or indirectly get benefitted from businesses that operate for sustainable development.
According to the Report of Research and Market The environmental management practices are directed towards the welfare of the community, and economy as a whole. The major problem affecting the development of environmental framework in various countries is the lack of knowledge support, and monetary funding. To support the environmental sustainability, governments of various countries are funding environmental projects and green ventures. The funding is made available through government bodies such as central government, regional government, local government, government offices, and regional local development agencies. Government funding for environmental management practices are usually allotted as a percentage of the economic stimulus package, which is a bail out money allotted by the government to boost the economic growth of the country. The stimulus package consists of the government funding for various economic and social activities, and includes tax rebates. The focused areas for funding are energy efficient infrastructure usage expansion of renewable source of energy reduction in green house gases and carbon emissions development of low carbon vehicles, clean technologies, and green infrastructure for waterways, roadways, and railways and conservation of water resources.
Peace and Economy
The vision of achieving sustainable economy and society has given birth to the concept of green jobs for preservation of environment. Green jobs are defined as the work in agriculture, industry, services and administration that contributes to preserving or restoring the quality of the environment. (United Nations Environment Program, September 2008)
The main aim of green jobs is to bring down the impact of enterprises and economic sectors to an acceptable level. They are available in various sectors of the economy agriculture, construction, transport and recycling industries.
According to Shekar Nguyen (2008) there was a drop in the bucket for financing and infrastructure needs of the green job. The promised amount was 125 million under the Green Jobs Act. This was the amount needed to create the required infrastructure. The clean energy investment proposals were discussed by the Democratic presidential candidates who committed billions of investments in the same. However the seriousness of political interest in developing green economic stimulus and green jobs across the world is questionable. Shekar Nguyen (2008) further criticize the Community Jobs n the Green Economy and the efforts taken by the key players.
Many of the answers will have to come in the doing, and the details, as green industry continues to take shape. There are plenty of ideas about how to create equitable policies, as outlined in the report Community Jobs in the Green Economy by the Apollo Alliance and Urban Habitat. They include requiring employers who receive public subsidies to set aside a number of jobs for local residents and partner with workforce intermediaries to hire them. Some cities are already requiring developers to reserve 50 percent of their construction jobs for local businesses and residents. (Shekar Nguyen, 2008)
These jobs involve activities that reduce the energy consumption, promote water conservation and efficient utilization of raw materials. Reduction of greenhouse gas emissions in the atmosphere especially carbon dioxide is an important objective of these jobs in current scenario. These jobs also take care of reduction in air, water and soil pollution to restore ecosystem and biodiversity.
Even in cases where the official requirement is reasonably high, officials may face demands from companies for a waiver. After United Solar Ovonic got nearly 100 million in subsidies for the plant in Battle Creek, the company brazenly demanded a waiver from the citys wage requirement. At a hearing on the issue, a retired union worker scolded company officials The city has bent over backwards to give you breaks. When is enough, enough United Solar was not swayed. It threatened to locate the plant elsewhere unless it got its way, so local officials caved. The company is now paying 14 an hour, which represents just 70 percent of what it takes for a fulltime, year-round worker in the area to earn the equivalent of a basic budget for a family of four. Still, when job-quality standards are set high enough and are rigorously applied, they can be a great boon for workers at companies receiving public subsidies (Mattera, 2009).
However, there are various jobs that are called as green but practices involved are not green. It means that carrying out a series of processes to produce an environmentally sustainable product but the activities required for its production result in undesired environmental impacts. In that case, it should be kept in mind that such processes or technologies or methods will not come under green jobs as the dream of obtaining sustainable economy cannot be fulfilled at the cost of environment and society.
To be fully effective, however, the standards also have to come with adequate means of enforcement. In the subsidy field, that means the inclusion of clawbacks--provisions under which officials can demand repayment of the subsidies if the company does not live up to its obligations. It is also helpful to adopt subsidy disclosure requirements, so that journalists, watchdog groups, and the general public can track what level of aid companies have received and what standards they are supposed to meet. (Mattera, 2009)
There are millions of green jobs one can think of. The worth of green jobs are analyzed in terms of amount of GHGs emission, use of natural resources as raw materials, amount of energy conservation and use of renewable sources of energy, water conservation and its contribution to the growth of economy.
The renewable energy sector alone generates about 2.3 million green jobs globally. But the energy generated by this sector constitutes only 2 of the worlds energy. Wind power and solar thermal industry are the major players in this sector. The concept of bioenergy has been emerged quiet recently as an alternative fuel for petrol and diesel. Biofuel and biodiesel have been tested successfully as an alternate the only obstacle in large scale production of these fuels is the high cost of production.
With enactment of the Obama recovery bill, with 38 billion to subsidize development of renewable energy and energy efficiency, government will gain even more leverage to produce good green jobs--if government uses it. If employers are left to their own devices, some of the new green manufacturing jobs will remain substandard. It is only through more aggressive union organizing--ideally done on a more level playing field--and government intervention in the form of job-quality standards that green jobs can become truly good jobs.(Mattera, 2009)
Buildings and construction also play an important role in reduction of GHGs emission and waste management. It has been calculated that construction of buildings alone account for 30-40 of all energy use. Development of green buildings can have potential to cut energy cost by 80 as compared to traditional building construction.
Transportation industry also has the potential to generate green jobs. Railways come under public transport and are generally regarded as the source of green employment. Statistics show that about 1.3 million people work in public transport in Europe and US alone. Green employment is also increasing with the introduction of electric buses and substituting diesel with CNG (Compressed Natural Gas).
The backbone industries of an economy such as iron and steel, aluminum, steel and pulp and paper producing industries cannot be neglected due to its importance. These industries require huge energy and raw materials. Therefore, the best method of reducing the impact of these industries on environment is through recycling of waste or by products. For example, secondary steel production from recycled waste of primary steel production, require 40 to 75 less energy than later (UN, 2008). Green jobs are also available in agriculture sector and forestry. Thus, it provides occupation to diverse profile, skills and educational backgrounds individuals. It has been estimated that by 2030, biofuels will constitute 59 of total jobs in renewable energy sector, 10 will be constituted by wind power and 13 by Solar PV
Greeneconomics, then, is not just agreenversion of current economic models but a fundamental transformation, outlines Brian Milani, a Canadian academic and environmental expert who has written extensively ongreeneconomics mentions in his book Designing theGreenEconomy that Greeneconomics is the economics of the real world-the world of work, human needs, the earths materials, and how they mesh together most harmoniously. It is primarily about use value, not exchange value or money. It is about quality, not quantity, for the sake of it. It is about regeneration-of individuals, communities, and ecosystems-not about accumulation, of either money or material. (Shekar Nguyen, 2008)
Environmental policy involves science, ethics and politics. The problems of uncertainties are associated with the policies, e.g. which is the relevant method that will surely show positive effects the amount of environmental damage that will be reduced by the policy what are the current and future costs of the policy etc. A major problem faced by environmental policy makers while making policies for environment management is how to deal with the uncertainty issues associated with the methods employed. This problem can be solved by understanding the nature of scientific uncertainties and exposing it to the people. This will result in development of new methods that confer sustainability with reduced uncertainty. Shekar Nguyen (2008) have listed four uncertainties of environmental policy i.e. Uncertainty of prognosis, political uncertainty for the long term changes, environmental uncertainty and uncertainty of environmental pioneers about the changes and risks.
People often take this fact very casually that the relationship between environmental cost and benefit is non-linear. This can be explained from an example the amount of damage caused by air pollution is not equal to the amount of greenhouse gas emissions. The damage is get noticed only when it crosses some defined threshold value. Similarly, the cost of implementing pollution control measures at pilot scale is low but rises exponentially when introduced at large scale. One cannot obtain expected results because the estimated value of the cost and benefit function is always different from the actual value. Therefore, underlying uncertainties are needed to be studied to get the actual results nearby expected results.
Also, unlike other capital investments, environmental policies get returns after a very long time may extend up to hundred years or more whereas NPV (Net Present Value) calculations of organizations goes maximum up to 20 to 25 years. Projects such as prevention of global climate change and safe nuclear waste disposal require long time. As a consequence, the status of the project cannot be foreseen beyond 20-25 years and therefore uncertainties remain associated with long term practices.
Precautionary principle is one such approach that has been adopted by environment management communities to deal with the problem of uncertainties. This approach works on the principle that instead of waiting to see the results of the policies and then modifying it accordingly, the policymakers should take precautionary measures on the basis of anticipated potential hazards linked with the designed methods. These precautions are required to be taken along with implementation of the policies. This approach is so widely used by international environmental management organizations that it is being thought that it is a rule laid down by international environmental law and is necessary to be followed by environmental policy makers while designing policies for sustainable development. A drawback of this policy is that it does not tell about what all precautionary measures should be taken in different situations to decrease the probability of adverse outcome in future. ORiordan has laid down six guidelines as a precautionary measure
When no definite proof of actions and consequences exist, it is necessary to act with a duty of care.
When the benefits from the policy are judged to be superior to the cost of delay, an initiative should be taken by the policy makers to explain society the reasons behind taking such decision.
If the policy causes possible irreversible damage to natural life-support functions and has been foreseen by the policy makers, then immediate precautionary actions should be taken irrespective of forgone benefits.
Always, eyes and ears should be kept open to sense the need for change in the existing policy and be ready to introduce necessary changes. This requires monitoring the impact of policy on environment and society at short intervals.
Transparency in operations should be maintained by making all the information public. This is helpful in knowing public responses.
If the society is not comfortable with the policy, extensive debates and discussions should be carried out to let them know actual long term goals of the policy and how it will be beneficial for them.
(Economic and Social Research Council, 1999)
There is yet another approach of dealing with uncertainties in political environment. It is the study of size of the stakes. In this, a graph is plotted between degree of uncertainty and decision stakes. The area near origin is the area of low uncertainty and low stakes and decisions made to operate policy under this region are based on normal applied science, applied engineering and professional consultancy. All these measures provide good judgment and opinion with strong scientific base to decrease uncertainties.
The inflow of the funds in the green investments has increased across the world. The .major investments have been done in the energy sector
The green spending in the major countries of the world are as given below. This indicates that the major investment has been done by China 221 billion, followed by US with 112 billion. The green spending by US was majorly done in the areas of energy efficiency products and systems. Energy efficiency, renewable and water waste are the three main areas of the green spending in US.
Many of the great economist argued that the American economy is heading towards uneconomical growth and due to this, the issue of sustainability is largely ignored. America has come very far in growth when comparing to developing countries. But the facts are uncontestable the biosphere is limited and non-growing, (except for the constant input of solar energy). At a certain point, any economic empire ceases to grow and mainly like a steady state. Birth rate must have to be equal to death rate and rate of commodities production must be equal to the depreciation. According to Daly (2005) in his life time of 67 years the human population has tripled and number of human artifacts or whatever things produced by human. Ecological footprint studies illustrate that the whole energy and resources required to continue and replace our artifacts has also greatly increased. As it is clearly visual that world became full of our use but its became empty of what was here before. To deal with such new way of pattern of shortage scientist and economist must need to develop full world and replace traditional empty world.
In the study of microeconomic- economic only involve in dealing with cost balancing and benefits of particular activities, due to this individual and business man are clearly getting indication to stop expanding of uneconomical growth and activities. When any activities expand, its generally displaces some of the other enterprise and mainly support to displacement is counted as a cost. At certain point people do stop where the marginal cost equals the marginal benefit.
Summary
The reduction of the Carbon emission reduction is also known as Energy Efficiency Commitment. Countries are adopting Kyoto protocol to control the emission of carbon in their countries. The sustainable growth ensures the continuing productivity of the land and the relationship of the environment and organism. The high volume of the green house gases have been releasing from different domestic and commercial activities which is polluting the environment and risks the all the lives on this earth. Renewable energy sources are one of the prime areas of the energy research. The reason for this is exhausting sources of natural resources like petroleum products, coals and others.
Services always should be accessible without any interruptions, value of service should be the similar it has been promised before liberalisation, it must be available in most excellent prices in market and factors which are related to consumer influence the results of liberalisation. Policy instruments are used to provide new framework for the economic goals of the economy. The European energy policy (EEP) has focused on creation of harmony and liberation of energy and gas market and this market allow large number of private players of energy who can supply energy security among all members of state. According to the International Energy Agency (IEA) Review (Burgermesiter, 2009) a major failure of the European Unions green-energy policy is a dearth of investment in research and development of new green technologies, which, the agency says, will be crucial in providing abundant and inexpensive clean energy. UN (2004) emphasized on the need of having a policy environment and institution that is supportive to the development of technology and diffusion in various areas of environmental sustainable projects. Denmark has developed the wind energy sources to the level that it is supplying electricity to its neighboring countries. This new source of energy has placed Denmark from importer to exporter of the energy services.
The carbon emissions cut down is possible through the renewable energy resources. The use of natural light and air in the new building and offices, use of environmental friendly methods and materials are some of major areas focused. Green and eco-friendly materials are used in constructions of green infrastructure. Asian Development Bank (2009) is particularly focusing on the projects like carbon finance, energy, information and communications technology, transport, water and urban development. There are some activities listed by Gilg et al (2005) wherein consumer can be involved in green marketing such as purchasing of products or substitute with low environmental impacts like certain detergents developed that has low environmental impact. Ottman et al (2006) has studied the problems of the credibility of product claims of being environmental friendly and sustainable. The consumer value positioning deteriorates when false claims are made. Consumers need to be communicated regarding various environmental products and product attributes.
Companies can utilize social networking platforms for communicating and spreading word of mouth for green products and their features and long term impact on health and society. The availability of information and competition among various organizations attract variety of consumer groups and this make challenging for the companies to attract consumer and retain them. The environmental innovations and concerns should not compromise with the quality and service of product. Peace and sustainable development strongly linked with each other. The economy is extension that encroaches too much on its surrounding ecosystem. It is possible to give up natural capital such as- fishes, fossil flues etc. These are more important than man-made capital as for example- factories, roads and appliances. These all are uneconomical growth help the rich section of the society and have least impact on changing conditions of poor. U.S.A is one of most uneconomical growth country. Sustainable development about making the resources last and helping a community to develop social consensus regarding the sustainability goals and results in peace. The sustainable economy has stop at certain point of growth but it need not stop rising. There is no motive to bind the qualitative development in plan of products, which can boost GDP without growing the quantity of capital used.
Companies can invest in development and growth of agriculture sector in the form of development of organic food. Organic food items have created its niche in the market place. Water harvesting of rain water, water recycling and others are some of the most important projects for investment. Micro Credits of Grameen Bank and Green Belt Movement are the perfect examples of sustainable growth, green investment, social and economic development and peace. Poverty is one of the main roots of major social evils of the society. The empowerment of people at that level has various social implications in the society and in their lives.
In Kenya, deforestation led to the problems of soil erosion and shaken the balance of ecosystem and human relations in the areas. The mission of the project is directed towards environment protection, fair political governance and peace of the society. The Green Belt Movement focused on areas like networking of people, advocacy of cause, environmental education, tree planting, forest conservation, and prevention of deforestation, Green Belt safaris and bringing change by women and to womens life. Cap-and trade system is a market based mechanism regulates the carbon emission of companies across the world (Stavins, 2001).
On the other hand there have been tremendous growths in the development of the energy efficient automobiles and acceptance of these among the consumer groups. The hybrid cars offered fuel efficient and better mileage. This overshadowed the traditional fuel based automobiles. At the same time in the household goods, CFL is more energy efficient than the yellow bulbs and demand for convenient production increased at the cost of energy efficiency. .
Green fund can be come in the form of investment means for big companies who mainly engaged with environmental business as like alternative energy, green transport, water and waste management and for suitable living. The criteria on the basis of which companies are judged among their sector, for investment to be made are environmental policies and programs carried out by the company, environment management systems incorporated, the use of renewable resources, relationship with suppliers and stakeholders.
However, in coming future, green VC investments are expected to rise because the environmental risk factors are negligible and rather it adds on value to the environmental sustainability factors whereas the major risk factors that are accounted for deciding investments to be made or not in mainstream industries are future environmental and social implications.
There are various aspects of the green buildings or constructions. These have legal implications and have to have the safety and comfort levels similar or better than the traditional constructions. Continuous environmental degradation from several decades now has lead to adverse climatic changes such as global warming. Peace on one hand signifies stability, a condition where management is good conflicts are resolved in time before they can result in disturbing peace, consistency of the relationship among various stakeholders of the society. Reduction of greenhouse gas emissions in the atmosphere especially carbon dioxide is an important objective of these jobs in current scenario.
Green jobs are also available in agriculture sector and forestry. Thus, it provides occupation to diverse profile, skills and educational backgrounds individuals. All these measures provide good judgment and opinion with strong scientific base to decrease uncertainties. The inflow of the funds in the green investments has increased across the world. The carbon emissions cut down is possible through the renewable energy resources. The use of natural light and air in the new building and offices, use of environmental friendly methods and materials are some of major areas focused. Companies can utilize social networking platforms for communicating and spreading word of mouth for green products and their features and long term impact on health and society. The availability of information and competition among various organizations attract variety of consumer groups and this make challenging for the companies to attract consumer and retain them.
The economy is extension that encroaches too much on its surrounding ecosystem. It is possible to give up natural capital such as- fishes, fossil flues etc. These are more important than man-made capital as for example- factories, roads and appliances. Green fund can be come in the form of investment means for big companies who mainly engaged with environmental business as like alternative energy, green transport, water and waste management and for suitable living.
Peace on one hand signifies stability, a condition where management is good conflicts are resolved in time before they can result in disturbing peace, consistency of the relationship among various stakeholders of the society.
Conceptual Framework
Research Methodology
Research Design
Research design provides the description on how the research has been conducted.
The qualitative research has been defined by Creswell (2009) as a means for exploring and understanding the meaning individuals or groups ascribe to a social or human problem. The qualitative research process consists of questions and procedures. The data is typically collected in the setting of the participant. The data analysis is helps to develop a general theme in an inductive manner. Researcher interprets data and derives meaning out of it. The report of qualitative research is flexible in structure. The inquiry support goes from a way of looking at honors in an inductive cycle. The focus of qualitative research is on the meaning of the data collected. The significance is given to the rendering of complexity of a given situation (Creswell, 2009). Qualitative research based on secondary sources is the process wherein existing literary sources are studied in order to answer research questions.
Qualitative research is a broad term. It can be of various forms. and consist of many things such as case studies that can be single or multiple, cross sectional or longitudinal, ethnography or grounded theory. These studies have elements that are free to be used separately or together. According to Punch (2005) the issue of conceptual framework in qualitative studies can be identical however the results these are never the same (Punch,2005). Qualitative study utilises different methods of data collection like collecting data from secondary sources or from primary methods of data collection like observation schedules, structured interviews. The procedures proposed for data collection for both qualitative and quantitative studies should be delineated and it should be pointed out why data collection activities have been chosen at all (Punch,2005).
Research Methods
In qualitative research, researcher uses the literature in a consistent manner with the assumptions of learning (Creswell, 2009). The use of the literature in qualitative research varies significantly from one research to other. Researcher plays a key role in data collection process.
Research Appropriateness
This research is based on the economy, policies, peace, sociological perspectives and environmental study. This is a very integrated study that efforts in collecting information from all the relevant sources regarding the same. The information of this sort can not be obtained from the primary sources. This is the reason researcher has adopted secondary data sources for the study. There are no human respondents involved in the study therefore the ethical issue related to the respondents is not applicable. However, regarding the data collection, researcher have relied on the secondary sources and acknowledged information compiled and presented in this study. The data and groups used in the study have not been changed. According to Punch (2005)
Ethical issues in the research problem In writing an introduction to a study, the researcher identify a significant problem or issue to study and present a rationale for its importance. During the identification of the research problem, it is important to identify a problem that will benefit individuals being studied, one that will be meaningful for others besides the researcher (Punch, 2005).
The literature review, research objective and questions have helped in determining the research method for this study.
