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Opportunities in Green Investing
May 21, 2009
Climate change, resource scarcity, and a host of other environmental issues are in the headlines daily, if not hourly. The new administration has made conservation and energy independence an important part of its stimulus package and signaled its intent to address environmental concerns through additional initiatives. We believe the influx of public and private capital into green solutions offers tremendous opportunity for private enterprise and therefore the potential for profitable investing.
Jack Robinson, founder and president of Winslow, outlines the broad opportunities that we see in four important sub-sectors, including renewable energy, water management, resource scarcity, and green buildings.
Will Baker, President and Chief Executive of the Chesapeake Bay Foundation since 1982 and a director of Brown Advisory, provides an overview to frame the key issues. Many of the challenges confronting the Bay can be seen as smaller versions of global ones, including water management and natural resource constraints.
Opening Remarks
Michael D. Hankin
CEO, Brown Advisory
Overview of the Environmental Issues
William C. Baker
President and CEO, Chesapeake Bay Foundation
Opportunities in Green Investing Keynote Presentation
Jack W. Robinson
Founder and President, Winslow Management Company
Maryland Public Television's "direct connection"
Interview with Ken Stuzin
April 2009
Maryland Public Television's "direct connection"
Interview with Ken Stuzin
April 2009
Investor Luncheon
The Impact of the 2008 Election
September 23, 2008
Brown Advisory partners Buck Chapoton and Terry Beaty, along with Tom Gallagher, discussed how both outcomes of November's presidential election could affect investors' portfolios. They also consider the election's impact on current and proposed federal tax legislation.
Brown Advisory NOW '08
Tuesday, April 1, 2008
Baltimore Marriott Waterfront
Welcome
Michael D. Hankin, CEO, Brown Advisory
How Radical Technologies are Revolutionizing our World
Joel Garreau, Washington Post
Where we are today looks like a turning point in history. Instead of aiming our technologies outward to modify our environment, we are increasingly aiming our technologies inward to modify many aspects of ourselves, including our minds, personalities, metabolisms, memories and even our children. We have become the first species to take control of our own evolution. These changes will not occur in the distant future, but in the next 10 to 20 years, and all are technologies that currently exist, or are in the pipeline right now. We are living in a period of exponential change. According to Moore’s Law, the amount of computer fire power that you can purchase for one dollar doubles every 18 months. There have been 31 doublings since 1959; that is an increase of over 1 billion times. A parallel is the railroads in the 19th century. The number of railroad miles doubled about 14 ½ times from the 1840s to the 1910s, and changed cities, industries and the way people lived. Another implication for exponential change is that the last 20 years is not a guide to the next 20 years, but instead a guide to the next 8 years. How did we get anything done before Google? It has only been ten years since the “dot com” phenomenon, but our lives have changed dramatically.
Innovation Beyond Radical Evolution
Michael Goldblatt, Ph.D., President & CEO, Functional Genetics, Inc.
Mark Kodenski, Brown Advisory
Health care throughout the late 20th century centered on the treatment of chronic diseases (i.e. heart disease, cancer, diabetes). Around the turn of the century, however, the world witnessed an increase of infectious diseases such as SARs, Mad Cow Disease, West Nile, and the mutated strains of the Avian Flu. While Michael Goldblatt noted a link between cross border commerce, climate change, and the increase of infectious disease globally, it is the velocity of mutations within these infectious diseases that he finds so alarming. Just as one vaccine is developed to treat a disease, a simple mutation resets the process, as is evidenced by on-going HIV efforts to find a cure. Goldblatt added that Functional Genetics looks to address the host of the virus, as the virus depends upon the host for its survival. By eliminating the host instead of the virus itself, the lifesource for the mutated virus is removed--a universal solution to a gamut of known and yet-to-be-known infectious diseases.
Read More (PDF)
Investing for the Next Technology Wave
Maria Cirino, Co-Founder and Managing Director, .406 Ventures
Harry Weller, Partner, New Enterprise Associates
Interviewed by Tim Hathaway and Chris Berrier, Brown Advisory
What have been the major changes in the environment since the late 1990s tech bubble?
Harry: Moore’s law applies here; there has been exponential change in next-generation technologies, although it varies by sector. For example, the cost of alternative energy (wind was noted specifically) has decreased at an exponential rate. In health care, our understanding of the use of DNA for various health care applications has grown exponentially. The key is to get in before the kick-up in the development cycle.
At the same time, at such an early stage, there is not much in terms of context. In trying to get a foothold in a specific sector, you overcome this by taking the “spider web” approach--i.e., rather than trying to find that one great single source of information, you take a greater number of small steps, all across the web.
Maria: A key difference between then and now is selectivity. In contrast to years back when money flowed freely, today there is a much greater emphasis placed on expertise. As an entrepreneur, you must bring expertise and knowledge to the table. VCs are now looking deeper, seeking the ‘cream of the crop’ type of entrepreneur versus the past mentality of “spraying the farm.”
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Smart Grids
Rob Lamneck, VP, Strategic Alliances, ESCO Technologies
We are facing a global energy problem – rising demand, and thus rising costs. Global energy use is expected to triple over the next 40 years, driven in part by growth in emerging markets. Widening gap between available supply and needed demand: for example, the US exported 8% of total coal production, up from 5% the previous year, to meet growth in global demand. The net result is higher energy prices.
Our electricity power grid is “the largest machine in the world” – an interconnected system of power plants, substations, wires and transmission lines. It is also outdated since it was designed to serve an “analog” world. 100+ year old technology and processes still in use today which is inflexible and inefficient - incapable of handling growing future energy needs. Higher load demands are resulting in grid congestion, service reliability problems and power disturbances in the system.
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Enhanced Humanity: Heaven or Hell?
James J. Hughes, Executive Director of the Institute for Ethics and Emerging Technologies and Professor of Health Policy, Trinity University
George J. Annas, Boston University School of Public Health, Chairman of Department of Health Law, Bioethics & Human Rights
Joel Garreau, Moderator
The question of ethics and societal responsibility is at the core of any discussion of “enhanced humanity.” Joel Garreau, our morning keynote speaker, moderated the panel, which examined the ultimate impact of “GRIN” technologies (Genomic, Robotic, Information and Nanotechnologies) on mankind. While the investment implications of these technologies are numerous, so are the unintended consequences.
After finding common ground in agreeing that “we all want what is best” for society and mankind, Hughes and Annas offered dissenting definitions of what that means and how we arrive at that aim collectively as a society.
Garreau began the discussion by asking Dr. Hughes if he was “out of his mind” in advocating citizenship for telekinetic monkeys or implantable memory chips in our brains.
Read More (PDF)
Election 2008:Analyzing the Political Landscape
Dana Milbank, Washington Post
Dana Milbank treated the NOW ’08 program attendees to a humorous review of the people, practices and customs that constitute Washington insider politics. Drawing heavily on his recent book, “Homo Politicus: The Strange and Scary Tribes that Run our Government”, he took the role of anthropologist and shared several anecdotes comparing the rites and rituals of the curious tribe he calls “Potomac Man” to those of ancient or more primitive civilizations. His descriptions of the misdeeds of several well-known politicians and lobbyists gave credence to the phrase, “Truth is stranger than fiction.
Harnessing the Green Wave: Exploiting Environmental Challenges to Build Long-Term Value
Andrew Winston, Author of Green to Gold
CEO’s and companies are catching the “Green Wave,” which is about innovation and change. The planet is changing everyday. Scientists and business people no longer disagree: climate change is unequivocal. Instead, they are asking how they should respond. Those companies that respond to change and can adapt their strategies and products will succeed and gain competitive advantage.
The Green Wave is being driven by: real constraints – water and climate change and by Stakeholders (both social and environmental) – NGO’s, communities, banks, customers, and employees
Is this a fad? No! There is a market-shifting change in the works. Companies are now advertising their green initiatives. Businesses are coming together to form agreements about caps on carbon emissions. Examples include BP, GM, Ford, DuPont, Deere, GE, Conoco Phillips, Caterpiller, AIG, Johnson & Johnson, etc. Banks are imposing environmental requirements on companies borrowing money to open new coal plants. Companies are starting to ask themselves: What is our environmental footprint? How much water do we use? How much electricity do we use? What are our carbon emissions?
Read More (PDF)
Scenes From A Changing Planet
Gary Braasch, Award-Winning Photojournalist and Author, Earth Under Fire
As a global population, we are contributing to the climate change through fossil fuel emissions. Air, water, and land react together in these changes. Mt. St. Helens and similar sights of degradation are proof that the world could be resilient to effects of global warming, if we act now to prevent fewer catastrophes in the future.
Alaska’s climate is changing much more rapidly than any other area. One of the reasons is the burning of fossil fuels from the opposite side of the country--an example of how an event across the world can still have a direct effect. The increase in temperatures is affecting not only the lands, but also the animals that inhabit Alaska. In other parts of the world that are experiencing the same phenomenon, plants are slowly moving up mountains to seek cooler temperatures, and birds are migrating at different times.
Read More (PDF)
Perspectives on Green Investing
Nancy Kopp, Treasurer, State of Maryland
Jack Robinson, President, Winslow Management Company
David Powell, Brown Advisory, Moderator
According to Nancy Kopp, Maryland’s pension fund is increasingly emphasizing “green” as part of its investment approach. By conducting interviews, the State seeks to understand the degree to which its managers are “forward- thinking” with regard to environmental issues. Treasurer Kopp does not believe that green investing and her fiduciary duty to meet certain rates of return are mutually exclusive. In fact, the State already invests directly in private ventures deemed to be “green.”
Admittedly, no formal measurement tool is available to rank managers according to a “green” benchmark, and the State has not incorporated “green” into its requests for proposals for manager selection. However, the State is increasingly cognizant that climate change, energy security, and resource conservation are long-term investment themes that could offer tremendous growth opportunities for its pension plan constituents.
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Freedom From Oil
David Sandalow, Senior Fellow, Foreign Policy Studies, The Brookings Institution
The U.S. imports more petroleum than ever. Oil provides 96% of the fuel we use for our cars and trucks. Our total dependence on oil for transportation is odd--unlike most situations where we have options, we don’t have any when it comes to oil for transportation. For example, if we are thirsty, we can drink water or milk or orange juice to quench our thirst. However, if we want to travel from point A to point B, gasoline is our only option.
Drawing energy from the electric grid to power cars equipped with rechargeable batteries (plug-in hybrid engines) is the “critical next step” in reducing our dependence on oil. Despite our electric grid being powered mostly by coal, which poses its own challenges to the environment, it is more energy-efficient and less damaging to the environment than burning fossil fuels to run cars. In addition, electric motors are far more efficient than gasoline engines, and they emit much less heat into the atmosphere.
Read More (PDF)
Where do we go from here?
William L. Paternotte, CFA, Senior Client Advisor, Brown Advisory
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