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June 3, 2008
LOHAS –
Opportunities for Ethical Investors
by Ron Robins*
Investors who read this website are probably
“Cultural Creatives” and “LOHAS” consumers. So
this likely means you as well. Let me explain these
terms and how they relate to your investments.
Cultural Creatives, becoming a major force, are also
LOHAS consumers
In a previous editorial, I wrote about
Cultural Creatives (CCs), and how they and their
values will become a major force on the world scene in
the decades ahead. Dr. Paul Ray and Sherry Ruth Anderson
in their
book on CCs, refer to them as caring “… deeply
about ecology and saving the planet, about
relationships, peace, and social justice, about
self-actualization, spirituality, and self-expression.”
The lifestyle CCs espouse is encompassed in LOHAS –
Lifestyles of Health and Sustainability. The term was
coined by Natural Business Communications in the U.S. in
the 1990s. It encapsulates a burgeoning marketplace of
products and services, "... focused on health, the
environment, social justice, personal development and
sustainable living.” (From
www.lohas.com.)
According to Dr. Ray, the percentage of adults in
Western Europe and in the developed countries of the
far-east who are CCs, and therefore LOHAS consumers,
exceeds that of the U.S., where they are estimated at
19% of adults. The
figure for
Japan
is around 30%.
Global LOHAS Markets probably total around $1
trillion
The U.S. LOHAS
organization estimated the size of America’s LOHAS
marketplace at $209.3 billion in 2005. It breaks-down
as follows:
- Personal Health: natural, organic products;
nutritional products; integrative health care;
dietary supplements; mind-body-spirit products =
$118.03 billion
- Green Building: home certification; energy star
appliances; sustainable flooring; renewable energy
systems; wood alternatives = $50 billion
- Eco Tourism: eco-tourism travel; eco-adventure
travel = $24.17 billion
- Natural Lifestyles: indoor & outdoor
furnishings; organic cleaning supplies; compact
flourescent lights; social change philanthropy;
apparel = $10.6 billion
- Alternative Transportation: hybrid vehicles;
biodiesel fuel; car sharing programs = $6.12 billion
- Alternative Energy: renewable energy credits;
green pricing = $380 million
Again, this data is for U.S. markets as they were in
2005. When you examine the market segments above, it is
clear that in the three years since this data was
published, many of these segments have experienced
incredible growth. Since the U.S. represents around 20%
of global consumption and most other affluent countries
ahead of it in the development of LOHAS markets,
world-wide LOHAS sales are possibly around $1 trillion.
Investment implications
But it is the young people in the developed countries
who promise to further push LOHAS markets into the
really big time in the next few years. Illustrating this
point is a recent U.K. article reviewing a
study of teen attitudes. The study found that,
“65 per cent [of teens] said they will use their
spending power to make a real difference in social and
environmental issues… 85 per cent of teens felt they had
the responsibility to ensure firms they might invest in
did not harm the environment.” Incidentally,
companies offering LOHAS goods and services may already
be in many socially responsible, green, spiritual, or
ethical investment portfolios. And the number of
investors having such portfolios is growing rapidly.
The
Ethical Investment Research Services, also of the
U.K, says that there are, “almost three quarters of a
million accounts in [U.K.] ethical funds, up from around
137,000 accounts in 1997.” In the U.S., “… from
2005 to 2007, SRI [Socially Responsible Investment]
assets increased more than 18 percent [from $2.29 to
$2.71 trillion] while all investment assets under
management edged up by less than 3 percent.” (See:
Social Investment Forum.)
As I indicated at the beginning of this editorial, most
of you visiting this website are CCs and LOHAS consumers
already. This puts you at a distinct advantage from
‘conventional′ investors as to having insight into the
investment opportunities that are opening-up in LOHAS
markets. You might like to review your values, insights
and intuition concerning your investments in relation to
the these markets. Then discuss them with your
investment advisor to see what additional investment
opportunities there are – and if they make financial
sense for you.
*
Ron
Robins, MBA, is founder,
Investing for the Soul, (http://investingforthesoul.com/),
Huntsville, Canada. He advocates, writes and teaches on the subject of
ethical investing. To contact him, e-mail to
Ron Robins or call 705-635-3034.
© Ron
Robins, 2008. |
