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Real Estate Industry Quietly Embracing Green Development

Although much less public than the major media announcements of the world’s largest corporations, GE and Wal-Mart, the real estate industry is quietly transforming by embracing sustainable business practices and green technologies. In an analysis of the industry, Progressive Investor reports that 41% of the 300 U.S. real estate investment trusts (REITs) are actively pursuing energy efficiency and green building upgrades and another 27% plan to do so. Yet, we found that most social/environmental investors (SRI) aren’t aware of even one investment option in the area that meets their criteria — one of the few asset classes that remains a hole for SRI portfolios. “That will change over the next few years,” predicts Rona Fried, Progressive Investor CEO. “Industry leaders are forming a responsible property trade association, creating criteria for certification, integrating green building into the appraisal process and into broker databases,” she says. Progressive Investor identified the following drivers for the trend: — Developers and building owners are feeling the crunch of high energy and water costs, which, according to the Building Owners and Managers Association (BOMA), constitute 28% of operating costs for downtown office properties, and 30.4% for suburban properties. They see the quick payback and cost savings […]

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CEOs, Shareholders and Labor Groups Sign Principles, Would Scrap Quarterly Earnings

An influential group of CEOs, business organizations, institutional investors, labor unions, corporate lawyers, accountants and consultants have signed off on a watershed set of guiding principles, The Aspen Principles, that commits them to encouraging and implementing long-term management and value creation strategies. Key Provisions of The Aspen Principles: – Companies to stop providing quarterly earnings guidance to analysts, and to not respond to analyst estimates. – Corporate boards to communicate with “long-term oriented investors” on senior executive compensation. – Requiring senior executives to hold stock they are given for at least some period beyond their tenure with the company, thus tying them to the long-term growth of the company. – Banning senior executives from hedging the risk of stock options of long-term oriented compensation. – Providing for “clawbacks,” which involve recouping senior executive compensation that was awarded based on the achievement of performance targets that were subsequently slashed or wiped out by corporate financial restatements. The signing of the four-page document is the culmination of a two-year process spearheaded by The Aspen Institute Business and Society Program in collaboration with the Council of Institutional Investors and the Business Roundtable, an association of chief executive officers of leading U.S. companies with […]

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Philips Offers $688M for Color Kinetics

Royal Philips Electronics NV (NYSE: PHG), the world’s largest lighting company, has offered $688 million to acquire LED-maker Color Kinetics Inc. (Nasdaq: CLRK). CLRK management favors the deal, which would give them $34 per share, a 14% premium over its stock price. Color Kinetics shares have risen by about 50% since April 1 – it had sales of $65 million in 2006. Philips Lighting CEO Theo van Deursen said the company is interested in Color Kinetics becaue of its patents on how LED lighting is controlled, specifically the software and hardware that makes it possible to adjust color and brightness. Philips licenses the controls for its “Living Colors” color-adjustable LED lamps for the home market. The acquisition, which is expected to be completed by year end, is Philips’ third targeting the LED market. It bought Agilent Technologies Inc. share of a joint venture for $950 million in 2005, and purchased Canada’s TIR Systems for $71 million in March. Philips expects the LED market to grow by over 20% a year, reaching $20-30 billion in 2025. The company now dominates the entire LED supply chain. Siemens AG is its major competitor in LED components.

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