Sunday is Earth Day and one thing you can expect when you have a day for something as big as a planet is some pretty big statements, and now that the economy is on the mend, there are those who believe the already burgeoning environmental movement is regaining steam.
And any momentum in what last year was a $250-million-plus industry makes for a pretty big attractive hunk of pie for insurers and agents in the market for some “green.”
“Earth Day is pretty consistently participated in by about a billion people and 192 countries every year,” said Bryan Buchanan, an Earth Day Network spokesman.
He added, “It does seem like it’s coming back up.”
The theme of this year’s Earth Day is “Mobilize the Earth,” and Buchanan said he expects Earth Day organizers to celebrate the culmination of a campaign that started in 2010 with a count down to a “billion acts of green” on the steps of the National Mall in Washington, D.C. on Sunday.
The “billion acts of green” program, an amalgam of responses collected from thousands of partner websites as well as EarthDay.org, tallies environmentally friendly activities people and businesses report to have performed. These acts can be as small as changing out a light bulb for a more energy efficient bulb or as large as a group conducting major environmental campaigns like planting 1,000 trees. Organizers say well over 940 million acts have already been reported.
In 2011 the “green movement” constituted a $250 billion industry, that’s up 30 percent from 2010.
People selling insurance products, such as efficacy insurance, should not only expect a larger slice of that pie next year, they can expect the industry to continue to grow, said Mike Zimmer, senior counsel and Thompson Hine in Washington, D.C., a business law firm with a large environmental practice.
Zimmer, a former chair of American Bar Association’s Renewable and Distributed Resources Committee, and current chair of the association’s Energy and Environmental Markets and Finance Committee, said 2011 was a year of rapid expansion for “clean, green-tech, renewable products” and he expects some of that momentum to continue despite this year bringing the uncertainty of an election year.
“We’ve seen this year that the economy has recovered, and people are feeling more confident,” he said.
Last year was a banner year for sectors like green buildings, alternative fuels, L.E.D lighting, solar and wind projects, and development of software to manage resources and energy utilization, Zimmer said.
And such growth is making financial inroads for the insurance industry, according to Zimmer.
“The confluence of these factors, or considerations, is creating new risk management opportunities and a very attractive environment for new insurance products,” he said.
Most notability the desirability of efficacy insurance is on the rise, he added.
Zimmer said he started to see a rise in demand for efficacy insurance over the prior 12 months in the early part of 2011, and “I’m seeing the demand increase in 2012 forward.”
And apparently, having efficacy insurance to cover the failure of a product or to manage the risk of a service being performed under specification is being increasingly viewed as an important investment factor by financiers.
“It is becoming more desirable to attract capital,” Zimmer said, adding that as government incentives and tax breaks begin to fade away, mechanisms like insurance from the private sector are becoming a larger consideration.
“Insurance is becoming an important part of the performance and financing part of the project,” he said.
Economist Robert Kleinhenz said he believes consumer interest in “green” products and environmentally friendly causes and services may rise along with a continued economic uptick.
“I certainly would expect that to pick up steam as the economy is improving more and more,” said Kleinhenz, chief economist for the Los Angeles County Economic Development Corp., a group that tracks economic and business activity throughout California.
The first Earth Date was on April 22, 1970, and is widely credited with launching the modern environmental movement.
During the “Mobilize the Earth” rally on Sunday at the National Mall, organizers say they expect to hold an event that will “galvanize the environmental movement.”
Buchanan noted that with the election year, ongoing worldwide efforts to jumpstart micro and macro economies, and the upcoming “Rio plus 20” landmark Earth summit, 2012 is likely to be the year to get the green message across with a decisive and long-lasting impact.
“What’s going on this year is going to set the global agenda for a long time to come,” he said.