How might I invest in green energy projects?
Mark Winstein, The Ecological Finance Review
July 20, 2005
On June 17, Associate Press reported that Zilhka Renewable Energy hopes to complete a $100 million wind farm in eastern Oregon by December 2006. The article said the company owned wind farms in eleven states. For many investors, green or otherwise, this would seem like a great company in which to own stock. Whether or not the numbers would bear that out, a savvy investor would first want to know, “How might I buy a piece of Zilhka or invest in their projects?”
I went to the company’s website, and quickly found that Zilhka was the very company that not long ago made headlines by selling a majority ownership stake to the large New York investment firm Goldman Sachs. So I got on the phone to Goldman Sachs to learn more.
Goldman told me they felt that wind was going to be a growing field, and that Zilhka was one of the last independent wind farm developers of scale that had not already been rolled into a larger enterprise.
Wow! Here I thought wind power was just really starting to reach critical mass and economic validity, but instead, it may already be too late for most of us to invest profitably in what will surely be a large growth industry over the next decade. Like solar panels, wind production is mostly in the hands of larger players for whom this industry is just one corner of much larger and more general business interests.
The nice fellow at Goldman told me that Zilhka had always been a privately held company, and never had a public stock offer. Under Goldman’s ownership, the company is remaining private. One could purchase shares of Goldman’s publicly traded stock, but Zilhka only represents a tiny fragment of their overall business today. The environmental impact of an investment in Goldman for the purpose of having a smidge of an interest in Zilhka would be diluted by all the other more generic business activities the company does.
In other words, if you are looking to make a 100% “green” investment, you would not likely have been able to invest in Zilhka at the outset, through their growth phase. According to the Goldman contact, you cannot do it now either.
The great investor Warren Buffett suggests that people invest in what they like. For him, that meant investing in the Coca-Cola Company and the Washington Post. But if your values tend toward the ecological, there are scant few public investment opportunities. For example, you might purchase shares in Whole Foods Markets, but if you eat, say, Stonyfield Farms organic yogurt or Cascadian Farms organic foods, as I have for a decade, there never was a public offer. Like Zilhka, Stonyfield and Cascadian were private companies that recently sold privately to large companies, group Danon, the makers of Danon Yogurt, and General Mills respectively.
Many people in the “socially responsible investment” (SRI) field are currently debating the relative benefit to society of these kinds of mergers. My personal opinion is that as green values become more mainstream, it is only natural that the lines between mainstream and green businesses will continue to blur. There is a new question to ask: Given the state of the biosphere today, which companies are being responsible for which part of the solutions to our ecological challenges? If one wishes to invest for profit and for ecological progress, what percentage of the investment is going to implement solutions, and which percentage is going to sustain problematic business activities.
The Ecological Finance Review