Schools Go Green!!!
McDonalds and Phillip-Morris are experts in this field.
What kid today doesn't enjoy a Big Mac and a Marlboro after third period social studies?
Okay, sarcasm aside - there's no denying that most of what we learn as children sticks with us throughout our lives.
From multiplication tables to good (or bad) manners to core religious and social beliefs. So it's no surprise that today's most successful companies tend to be those that continuously tap this demographic.
And Green Chip companies are no exception. In fact, for the past few years, we've clearly seen evidence that the most profitable LOHAS companies are aggressively marketing their goods and services to this demographic.
Look at Whole Foods Markets (WMFI:Nasdaq) for instance.
Walk into any Whole Foods Markets and you'll find healthy, organic kids' cereals, dinosaur-shaped macaroni and cheese and brightly-colored juice boxes in all the favorite flavors - grape, cherry and fruit punch.
You can even find Scooby Doo Yoga tapes and Yoga mats.
I'm not kidding.
And they're making a fortune!
But what's important to understand here is that LOHAS integration for children isn't just about marketing immediate goods and services - it's about marketing a lifestyle that has long-term benefits for the LOHAS marketplace.
And that's exactly what the Green Building industry is doing now. Indirectly, anyway.
You see nowadays, to adults, the concept of solar cells, water recycling and daylighting is one that holds potential for the future of building construction. Something we expect to see much more of, five to ten years from now. But to a child, living or going to school in such a building today - well, that's all he knows. Therefore, that's all he'll come to expect in the future.
What we're witnessing in 2006 is the first generation in history to see green building as the status quo - not some random, government-funded sociology experiment.
Schools Go Green!
As we've seen in recent years, the economic benefits of green building are staggering. (You can read more about the economic benefits of green building here) And school buildings are no exception.
The Massachusetts Technology Collaborative (MTC) and the Massachusetts Department of Education recently teamed up to launch a pilot program that encourages school districts to construct or renovate school buildings that will cost less to operate and provide healthier learning environments for students. The program is also helping influence how future schools will be designed and built in Massachusetts.
Data from this Green Schools Initiative showed that via green building, energy savings would average about 30 to 40% above state code requirements. These energy savings translate to an expected annual cost savings of $70,000 per year.
At a time when most U.S. school systems are struggling just to put diesel in their buses, these kinds of savings are massive. And let's face it, there's not a PTA bake sale big enough to pull in $70,000 per year!
So now, a number of school systems here in the U.S., hoping to benefit from these types of savings are getting on board with green school initiatives.
Tonight's Top Ten
In an effort to draw attention to the economic, social and health benefits green schools can offer, Greenbiz.com created its Green Guide - America's Top 10 Green Schools.
What they found holds a lot of promise for the future of this industry.
Here are some highlights:
- Clackamas High School (Oregon) - Secured a 44% reduction in energy consumption.
- Michael E. Capuano Early Childhood Center (Massachusetts) - Attained 41% less energy use than code requirements.
- Punahou School (Hawaii) - Reduced energy costs by over 40%.
- Sakai Intermediate School (Washington State) - utilizes an integrated pest management program eliminated the use of pesticides.
- Creek Elementary School (North Carolina) - utilizes a reflective metal roof, waterless urinals and automatic shut-off faucets.
- Lick-Wilmerding High School (San Francisco) - commissioned windmills to provide power and utilizes recycled carpet tiles.
- Goodwillie Environmental School (Michigan) - utilizes a heating system powered by a geothermal heat loop.
- Clearview Elementary School (Pennsylvania) - Reduced water consumption by 39%.
- John M. Langston High School (Virginia) - Allows for the reclaiming of roof-top rain waters and installed formaldehyde-free, strawboard-based cabinetry.
- Willow School (New Jersey) - Utilizes waterless urinals, metered faucets and low-flow toilet fixtures.
Some of this stuff may sound a little too touchy feely for some of you. But everything mentioned above translates into tangible opportunities for 'green' businesses. Some of which are publicly-traded.
H2O Déjà vu
A large chunk of green building certification comes from water conservation.
You see, with increasing water shortages and restrictions on the horizon, the cost and availability of clean water will follow - pushing operating budgets for buildings to new heights.
In fact, it's already happening.
For example, flow in the Colorado River, which feeds the Las Vegas Valley, has dropped by almost half between 2000 and 2005 due to successive droughts.
And according to a recent study, California, already under tight water restrictions, is estimated to have a 40% increase in water demand over the next 25 years. In fact, by 2010, the Association of California Water Agencies predicts that the state will face chronic water shortages in less than 5 years, as current water supplies simply cannot keep up with population growth and skyrocketing demand.
Meanwhile, water from the Great Lakes, which contain about 20 percent of the fresh water on the Earth's surface, is only being renewed by 1 percent each year.
The fact is, developers know increased water costs are going to have a massive impact on their bottom line. And buildings with advanced water conservation and recycling systems intact will demand higher leasing costs and increased revenue.
That's why companies operating within this arena are poised to make a killing in the years ahead.
In fact, one company I've been following for awhile, Zenon Environmental, Inc. (ZEN.TO) is the perfect example of just how lucrative this segment is.
Zenon is a leader in drinking water treatment, wastewater treatment, process water treatment and water recycling.
Last week GE acquired Zenon - and the stock shot up more than 50% in one day.
As these smaller, publicly-traded water conservation and water recycling companies continue to grow and land more and more contracts thanks to the increased demand for green buildings - behemoths like GE will continue to swallow them up...allowing those who get in early to exploit these acquisitions for profits.
I'm telling you, from new high-rises to local school buildings, these systems will become standard.
So you might as well grab a piece of some of these companies now - while they're still trading at ridiculously low levels.
For more on the current water shortage situation and solutions, click here.
Until next time...
Managing Editor, Green Chip Stocks
"Our hope is that our investment in green buildings will be returned many times over through energy savings and environmental, community and health benefits."
New York Mayor Michael Bloomberg