Does anyone know of any good studies on the impact that socially responsible investing (SRI) has had on “green stock” valuations?

One of the things that I find investing on the public market side is finding mismatches between the value of a company and the price that Wall Street is paying for that company at any point in time - you know stock analysis 101 as preached by Ben Graham, Warren Buffet and their disciples. Well…. to say that I do what Graham or Buffet does would be a misnomer - I have my own methodologies which are a bit more about percieved valuations - but that’s a post for a different day.

What is unique about green stocks, however, is this concept of SRI - people assigning value to a firm and investment that is not driven by the profit motive. Nobody invests in technology companies based on an intrinsic value similar to saving the planet - well at least not that I am aware of (e.g., would gamers buy the stock of a gaming company to keep it in business so they can make more games for them?)…

I am interested to see if SRI throws traditional valuation metrics out of whack when comparing a “green stock” to a non green stock in terms of pure economic return - financial investment goals…

I came across this today, Vertical Farming, which is pretty cool.

Vertical farms, many stories high, will be situated in the heart of the world’s urban centers. If successfully implemented, they offer the promise of urban renewal, sustainable production of a safe and varied food supply (year-round crop production), and the eventual repair of ecosystems that have been sacrificed for horizontal farming.

This has lots of angles to it, including encouraging higher density urbanism, in-fill potential for decaying inner cities, the retirement of agricultural land for preservation, not to mention the obvious value of having food production close to population centers where there are customers - and more importantly workers. There are some pretty cool and out there architectural studies on the site as well.

I have no idea if the economics work (particularly in high cost real estate markets like NYC or San Francisco) - not to mention what the neighbors might say (500+ acres worth of farm smells in one city block?) - but if we are headed to $8 gas - ideas like this merit some consideration.

It also reminded me of a recent conversation I had with a former analyst of mine about derivative (not financial derivative) plays off of the high cost of oil - trickle down stuff that might have been overlooked by the Street in general.I suggested to look at the agriculture sector to see if …

Since this blog is about green investing and green economy - is it heresy for me to consider that big oil might be a good investment? Taking aside the value of the social responsibility of investing in green (a topic I want to revisit in another post) big oil might be a good investment alongside green from a thematic standpoint.

When I think about trends and investment themes I like to look at them from all sides - winners and losers. I don’t necessarily think it always (or even often) makes sense to invest in both sides of any particular trend (long the winners - short the losers), but I like to consider these angles because it helps me when sector valuations and sentiment swings around - often creating valuation opportunities on the other side of where you started out with an investment thesis. In tech that dichotomy is often spelled out in net sum zero terms - new companies take or make obsolete old companies.

On the topic of the emergence of alternative energy, though, I am pretty sure those rules don’t fit.

Yesterday,towards the end of my post I talked about how I thought that green investing was following a path I observed in Telecom during the 90’s post-dereg days - where one of the biggest - if not the biggest winner of the post-dereg consolidation was old line SBC (now AT&T). …

Fortune’s Green Wombat has out a couple items that I think provide some insight to the challenges and opportunities of green investing with regard to entrenched interests. First is a write up of a networking event sponsored by VentureBeat where Ray Lane of Kleiner Perkins compared green investing to biotech.

Unlike the first dot-com era or even the current Web 2.0 age, there’s no quick exit on the horizon for investments in green tech companies that may be years away from producing a product and require hundreds of millions, if not billions, in project financing to build car factories or solar energy power plants.

Lane compared investing in green tech to the long-term horizon needed for investing in biotech startups, where the key is to hit milestones that allow investors to calculate valuations.

The second was today’s news that Google would be investing $115 Million in start up solar energy company BrightSource.What’s interesting about this is not so much the Google investment - but instead the list of other BrightSource players - BP, StatoilHydro, and Chevron - which illustrate the degree to which we can expect the entrenched players to be active, if not dominate, in this space - and underlines Kane’s point about this not being the same as Internet investing.

There is one point, however, where I differ from Kane on his assessment of investor expectations - and that is the …

Pensions & Investments has a story out about the amount of private capital flowing into green investments:

According to New Energy Finance, a London-based global clean-energy research firm, $148.4 billion in new private equity, venture, government and corporate capital was invested in clean technology in 2007, up 60% from $92.6 billion in 2006. During the same period, total assets of global private equity and venture capital specialist clean-tech firms grew to $23 billion in October 2007 from $15.9 billion in October 2006, according to data from New Energy Finance.

There are some estimates here about amounts of capital committed, invested, etc., for those that like that kind of thing.

The general tone of the piece is about how investors are waiting on the sideline to put more money into this group given the imbalance between interested money and investable ideas. This, it should be pointed out, is not a problem restricted to green investing. Across most of the alt investment sectors, (hedge funds, venture, private equity), there is generally too much money chasing too few ideas regardless of the industry.

Of course, this begs the question, with so many poorly or underfunded green ideas out there, why aren’t more them getting capital if the market is awash in dollars looking for these kind of investments?

I think part of this can be attributed to the unique role that subsidies play in the industry - and the uncertainty that those subsidies (both for green …

Welcome to Green Street Investor.

Green Street Investor is a forum for discussion of “green” investing, finance and the green economy. So what does that exactly mean? Like most things labeled green today it can cover a pretty wide range of topics - food, cars, building, land and real estate, and of course energy production are just a portion of the industries that are being “greened” - and similar to the early days of Internet - the definition of what qualifies as part of the green industry - or if green should even be its own category is not well defined.

At Green Street Investor we plan to cover all aspects of the green revolution from a financial perspective. Stocks, venture investing, technology trends, government regulations - all things that might impact an investor that is looking to profit from the green revolution.

This means we will be also delving into some old line industries - in so much that green investment trends might impact these companies, or these companies might influence the fortunes of green firms. Like the internet in the 90’s the potential impact of the green trend is broad in its reach - perhaps even broader - providing a fertile ground for ideas, both in established companies adapting to a new environment and new companies bringing emerging technologies to market.

Personally, as a professional investor, I find the green trend to be one of the most fascinating …