Gambling on Global Warming

This new product from the US allows stock market investors to gamble on the "climate change solutions industry".

This is a nice little index that fits within the "ethical investment" craze. The returns to date seem impressive.

The question is whether climate change is all hype and whether there are technological solutions to the current problems.

It is hard to see demand for solutions falling given the IPCC figures so this might be a canny investment at least over the short to medium term or until there is something else to worry about or the oil price falls so much that no solution is cost effective.

US-Based Index Allows Bets on Global Warming Fight

NEW YORK - Boston-based group KLD Research & Analytics licensed an index on Wednesday that allows investors to bet on companies taking steps to combat global warming.

KLD says its Global Climate 100 Index holds small to large-cap companies whose activities reduce the social and economic consequences of climate change.

The weighted index holds 100 companies ranging from the energy and utility sectors to industrials and consumer products. Some of the companies invest in efficiency and buy power from renewable sources.

That differentiates the index from pure-play renewable energy investment products, KLD spokesman Chris McKnett said.

"We are trying to provide investors exposure to the global climate solutions value chain. The sources of climate change are dispersed across the economy and our view is that sustainable solutions also have to be dispersed across the economy," he said in telephone interview.

Last quarter the index achieved a return of 5.87 percent and annualized returns since the index's inception in the summer of 2005 were 22.38 percent, KLD said.

Among companies the index holds are Whole Foods Market, Inc., which purchases renewable energy credits to offset 100 percent of its electricity needs in North America, and Itron, Inc., which manages the delivery and use of energy and water to increase efficiency.

It also holds Japanese company Sekisui Chemical Co. , which has built homes that operate on solar energy since 1998.

KLD licensed the index with Fixed Income Securities, L.P.