What is a Cleantech Fund?

Donna Ryan

A cleantech fund is an investment fund that is comprised of stocks that represent companies whose clean technologies support energy conservation, environmentally sensitive cleaning, and protecting the environment. A cleantech fund thus backs "green businesses" that make up wind power, solar power, hydropower, information technology, green transportation, and energy efficient technologies. The objective of such companies is to channel renewable energy resources to reduce waste and pollution.

A company that makes energy efficient CFLs might be included in a cleantech fund.
A company that makes energy efficient CFLs might be included in a cleantech fund.

Remediation companies that clean up "brownfields" that have been tainted by contamination and make them into habitable "greenfields" can be part of the stocks included in a cleantech fund. Emerging technologies, like sensors or scrubbers to reduce pollutants, and semiconductor companies may also be part of these holdings. Stocks of companies that produce ethanol that pollutes less than other fuels are other cleantech ventures. Likewise, companies that produce energy efficient light bulbs, wind turbines, or geothermal energy are considered appropriate for inclusion.

A wind turbine company could be included in a cleantech fund.
A wind turbine company could be included in a cleantech fund.

Part of the motivation behind investing in cleantech is due to world responses to global warming, climate change, and CO2 emissions. Therefore, a cleantech fund is a financial vehicle used in environmental finance to promote clean or green technologies. The three major clean technologies included in this type of fund include wind power, biofuels, and photovoltaics.

Generally, stocks in a cleantech fund can be categorized into several groups. One is renewable energy, such as wind, hydropower, biomass, and ocean thermal energy. Another group includes energy efficiency technologies, such as solar power, motor technologies, and geothermal energy. Environmental remediation, such as emissions and hazardous waste, make up another category, as does clean water technologies.

A number of clean technology conferences have been held to address the growth in emerging technologies, to overview clean business practices, and to gain insight into how to further clean technologies for a more sustainable future. These conference agendas have included subjects pertinent to investments that are part of cleantech fund portfolios. Conference topics have included renewables, solar and photovoltaic use, bio energy and bio fuels applications, and energy storage, including fuel cells. There have also been discussions on remediation practices, waste management, and water treatment systems, as well as green building, green computing, and green chemistry. All conference topics relate to the resources and developments related to the companies that influence stock holdings in cleantech funds.

The cleantech fund is an fund that investors expect will continue to develop and grow in the environmental financial arena. As green businesses and technologies expand and grow, these investments may contribute to the realization of a more sustainable future.

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