Can an investment help the pocketbook and the planet at the same time?

Definitely, says R. Paul Herman, author of The HIP Investor: Making Better Profits by Building a Better World. Following is an excerpt from Herman's book. Explore the options, and put your money on a wiser course...

What frameworks are useful in evaluating real estate investments? The Sustainable Land Development Initiative (SLDI), a member-owned organization dedicated to promoting land development around the world, seeks to balance the needs of people, planet and profit – for today and future generations. SLDI is piloting a project at Ocean Mountain Ranch in Oregon using its “SLDI Code” (based on a holistic model) to pioneer innovations in eco-forestry and sustainable living (https://www.triplepundit.com/author/sldi/).

Green Investing - By R. Paul Herman

As the world now has 7 billion people, what innovative approaches to housing, land and forestry are available to investors?

A potential allocation for a HIP portfolio is investing in real estate and forestry, which can offer interesting opportunities for increased human impact and profit. Half of wood use worldwide is for subsistence use, specifically energy and cooking, says Peter Mertz, CEO of Global Forest Partners. “We seek to deliver units of wood from much smaller areas and in a sustainable way that is also profitable,” he said at the Social Capital Markets conference in San Francisco in September 2009, describing his firm’s investment approach. Global Forest Partners (GFP), a forestry-focused investment manager, manages $3 billion in assets, where half of its investing is allocated to sustainably cultivating forests in emerging markets. These yield both profit and positive human impact, by creating jobs, building a safety net for the community, and establishing a sustainable foundation for societal advancement.

“We are replacing rural development, like ranching and cattle, with more sustainable development,” he says. GFP offers housing for workers, not just managers, as well as showers for daily good hygiene, complete with stocked personal care products. Workers bring their families to the camps on weekends to show off the amenities, he says, continuing: “I was educated as a forester, so I think at a different level of responsibility.” This approach requires more investment to achieve the positive impact, but it also results in lower risks, more dedicated workers and an above-market profit. GFP is registered as an investment adviser that offers managed accounts and co-mingled funds to invest in these projects, which have delivered 9 percent annual returns over the past decade, according to GFP.

What frameworks are useful in evaluating real estate investments? The Sustainable Land Development Initiative (SLDI), a member-owned organization dedicated to promoting land development around the world, seeks to balance the needs of people, planet and profit – for today and future generations. SLDI is piloting a project at Ocean Mountain Ranch in Oregon using its “SLDI Code” (based on a holistic model) to pioneer innovations in eco-forestry and sustainable living.

R. Paul Herman is CEO and founder of HIP Investor Inc. He's is the author of “The HIP Investor: Make Bigger Profits by Building a Better World,” published by John Wiley & Sons in 2010.