Focus: SRI

Outside the US, the Obama effect is proving very positive for green investors. In recent months, investors have seen the introduction elsewhere of stringent environmental policies and green stimulus packages that may not have emerged had the US government prolonged its resistance to climate change policy.

Total global green stimulus is now estimated to be around $470bn. China in particular stands out in its commitment to green projects. It plans to invest around 34 per cent of its $586bn economic stimulus package on improving its transport system, updating its electricity grid and boosting water and waste services.

Mr Obama’s green policies and his commitment to low-carbon initiatives are also providing a positive backdrop for new opportunities for the global trade in green products and services. In a recent speech to mark Earth Day, he said: “The nation that leads the world in creating new sources of clean energy will be the nation that leads the 21st century global economy. America can be that nation. America must be that nation.” This speaks of the importance of clean energy in his economic thinking.

The speed at which Mr Obama is introducing incentives to decarbonise the economy is very positive. However, it is vital to remain mindful of the timing associated with the allocation of stimulus funds and focus on the longer-term opportunities.

Importantly, the UN climate change conference in Copenhagen in December is shaping up to be a bellwether for the long-term legislative and financial environment for climate change investments. A robust agreement in Copenhagen would provide the best indication yet of the depth of the Obama effect on the global green investment thesis.

Charlie Thomas is fund manager at the Jupiter Ecology fund