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14 THE FUTURIST July-August 2007 www.wfs.org

W o r l d T r e n d s & F o r e c a s t s

Capitalism with a ConscienceTipping point or Gold Rush? Socially responsible investing takes off.

Investors have been puttingmoney where their values are forat least the past two decades, but

now socially responsible investing(SRI) has gained powerful new mo-mentum, according to independentfuturist Hazel Henderson in her

most recent book, Ethical Markets.Economists, Wall Street analysts,

and financial media have discountedthe trend toward sustainableeconomies and socially responsibleinvesting for two decades, shewrites. Now, a tipping point hasbeen reached in the growth of SRIand its robust rates of return. In the1980s, SRI assets totaled about $40 billion, mostly owned by main-stream religious groups and chari-table foundations whose values al-ways went beyond the bottom line.

Today, the Social Invest-ment Forum reports thatvalues-based investorsaccount for more than11% of all investmentsunder professional man-agement.

Driving much of therecent push in SRI areventure capitalists, whoseforays into supportingc lean and g r eencompanies surged in2006, reports Henderson.

Venture capital has al-ways played a uniquerole in the U.S. econ-omy, she says, spawn-ing our rapid technological innova-tion during the industrial age.Venture capital fueled the dot-com

companies of the 1990sand in-vestors lost trillions of dollars whenthis bubble burst in 2000. After lan-guishing and licking their wounds,venture investors have now discov-ered the next big thingtechnolo-gies needed to create more sustain-able societies.

There is fear about SRI becominganother dot-com bubble: The herdbehavior of investors has initiated arush, which may be too much, ac-cording to Nick Parker, who doesntwant to see a new bubble occur incleantech, writes Henderson.Nicholas Parker is founder and

chairman of Cleantech CapitalGroup, which sponsors regular Ven-ture Forums attracting hundreds ofcapitalists.

This next-big-thing mentality isone reason even venture capitalistslike Parker are reluctant to associatetheir interest in green companies andtechnologies with SRI. The drive toinvest in cleantech, Parker told TheNew York Times, is not the ventureequivalent of socially responsible in-

Economics

U.S., European Cleantech Venture Capital Investment

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

WFS PHOTO ILLUSTRATION / PHOTOS.COM; CINDYMI LLER (2007 TOYOTA PRIUS)

Total U.S. and European venturecapital investment in cleantechtechnologies and companies devotedto advancing sustainabilityreacheda record $3.6 billion in 2006, represent-ing a 45% increase over 2005, accord-ing to Cleantech Venture Network.Approximately 72% of this investmentwas in energy-related cleantech, ac-cording to co-founder Nicholas Parker,who cites high energy prices, growingawareness of global warming, and fa-vorable public policies as among thefactors favorable to venture capital in-vestment in clean energy.

billions

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vesting. This isnt about creating afew shekels for a communitygroup. It is about making money,plain and simple.

The power of money to shape thefuture is clear to growing numbersof investors. Henderson quotesWayne Silby, founder of the CalvertGroup and co-founder of the SocialVenture Network: When we investour money, its like voting for thekind of world we want to create. Itsexpressing our values.

Cynthia G. Wagner

Source: Ethical Markets: Growing the GreenEconomyby Hazel Henderson, with SimranSethi. Chelsea Green Publishing, 2007.Approx. 245 pages. Paperback. $30.Available from the Futurist Bookshelf,www.wfs.org/bkshelf.htm.

Chinas Barriers to Growth

Chinas bright economic futurewith GDP widely predictedto exceed that of the United

States before 2035still faces a fewshadows in the near term.

A new survey of internationalbusiness leaders and futurists, con-ducted by Global Futures and Fore-sight (GFF) and Fast Future, identi-fies the biggest barriers to Chinasgrowth:

Bureaucracy (identified by 41%of respondents).

Corruption (32%). Energy shortages (22%). Lack of experienced managers

(18%). Protectionist behavior in export

markets (18%). Insufficient speed of market re-

forms (18%). Social unrest (18%).The reports author, Rohit Talwar

of GFF, notes that, though the re-spondents did not perceive the re-moval of bureaucracy and corrup-tion as key drivers of growth, theirpersistence in Chinese institutions isan impairment.

The need to modernize the bu-reaucracy and a lack of transparency[make] it hard for outsiders to trustofficial statistics and local govern-ment actions, Talwar writes. Onerespondent remarked, There is little

transparency in big decisions linkedto corruption at provincial and locallevels. This leads not only to dis-gruntled local people but also to anegative impact on long-term invest-ment.

As energy demand increases witheconomic growth, supplies havebeen a major worry. However, Tal-war reports that the bottleneck ofcoal, oil, and electricity supply has been alleviated. . . . There is anincrease in coal transportation andoutput of electricity generation sofewer and fewer places have seen theblackout of electricity.

Since Chinas increasing hungerfor energy affects global supply,competition will drive up energyprices globally. Despite having madedeals with suppliers such asVenezuela, Russia, and Iran, somerespondents questioned Chinas

ability to pay relative to rich Westernnations, according to Talwar.

Other concerns cited by the re-spondents include rising labor costs,transport problems, lack of availablefinance, and tensions over Taiwan.

Cynthia G. Wagner

Source: The Future of Chinas Economy: ThePath to 2020Opportunities, Challenges andUncertainties by Rohit Talwar. Global Futuresand Foresight (www.thegff.com) and FastFuture.

THE FUTURIST July-August 2007 www.wfs.org 15

Laborer sleeps outside Beijing construction site. Despite its rapid growth, Chinaseconomy faces major challenges, including inefficient bureaucracy, corruption,

and energy shortages.

FREDERIC J. BROWN / AFP/ GETTY IMAGES / NEWSCOM

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