Green Investing in Trying Times

"A lot of those opportunities exist on the venture capital and private equity sides," LaPann admits, "But that doesn't mean that there aren't publicly traded companies that aren't exploiting some of the opportunities developed by the venture capital guys. At this point, because they're publicly traded you're participating along with them."

For advisors and their clients who are interested in pursuing green goals through their investing, LaPann notes there's really no substitute for doing your homework. "You can go to [mutual] funds that specialize in green investing, but what's satisfying for a lot of investors is to do their own homework and decide what's important to them," he says.

Among his own clients, LaPann says he's seen a universal attraction to companies that are focusing on developing energy-efficiency improvements to products and systems that are currently in use. They can see the commercial applications," he explains. "Many of these technologies are questions of simple engineering, and there's a common sense element to it. So it's the combination of commercial viability and common sense that makes those kinds of investments most attractive."

During LaPann's session at the climate change investment conference, Diana Propper de Callejon, general partner with Expansion Capital Partners, LLC, a clean technology venture capital firm, said she is looking for clean tech investments that will deliver in the short term and sees that coming from energy efficiency. "It delivers faster results and costs less," she said. "It really is the low-hanging fruit for climate change [investing]."

Propper also suggested that these entrepreneurial clean tech firms are going to need professional management from enterprises like GE, 3M, or some of the more successful Silicon Valley firms to realize their full potential.

Another step that Propper sees as essential when it comes to alternative energy in the U.S. is the establishment, at the federal level, of national standards. "We need to take the long-term view," she said, "and not continue to try and address it with incentives and regulations with short horizons."

Making a Difference Through Proxies

A different area where LaPann says his clients have attempted to bring a green lens to their investments is by working with money managers who are active in proxy voting. "Often those managers or groups of those managers will raise green issues for a corporation, not necessarily that they're going to push for a vote at the annual meeting, but just to raise the issue and get into a discussion. Many times management is receptive to that," LaPann says. "That's a way of using your capital to bring about change without making a direct investment in the energy area."

Another often overlooked green-related investment consideration is what LaPann calls the "non-financially quantifiable environmental impact," of companies. He asks: "Is there a cost that's being generated by the company that does not show up in their financials? Is there a cost for a future cleanup, a cost for harm to the environment? We're trying to figure out ways we can bring that kind of a perspective to helping our clients make investment decisions, but it's a very complex area."

Although investors in just about everything are skittish right now, LaPann is optimistic about the future for green investing. "What's interesting for me, and we've been in business for 18 years, is that, whatever you call it, social investing has evolved. It started with screening, but now it's really progressed to where clients want to use their capital to make profitable investments that further their mission. That's a big progression in a short period of time and it's a big progression in the right direction."