Smart Investors target carbon tax opportunities

Opportunities

The move is on to a global clean energy economy. Our re-insurers, superannuation funds and smart investors are beginning to realise this is the case. In 2010 clean energy investments hit record levels globally at $243 billion(1). The EU and China are leading the charge with renewable energy and energy efficiency investment expected to grow between $180 -260 billion pa to 2030 (Bloomberg). Australian investment is lagging behind the rest of the world.

Regional boost from renewable energy

The Climate Institute commissioned leading energy and industry specialists to model the opportunities and to talk to regional business and community leaders, to not only see what extra opportunities exist but to see what else is necessary to turn this opportunity into reality. This research is from Sinclair Knight Merz-MMA and Ernst & Young titled Clean Energy Jobs: Regional Australia.

This recently released research shows the largely untapped energy resources that Australia has in geothermal, large-scale solar, bio-energy, hydro, wind and natural gas. The modelling shows that by 2030, close to 43 per cent of Australia’s electricity could be produced from clean energy, up from around 12 per cent today. Regional analysis shows that greater proportions of renewable electricity are attainable with extra policies and focus.

“The smart investor mitigates their investment risk by selecting companies and investments that are actively addressing their carbon use and climate change risks,” said Louise Edkins, a Brisbane based director of Ethical Investment Advisers Pty Ltd (AFSL 276544).

Being an ethical investment specialist for over 17 years, Louise has found that many of her investors have benefited from the investment performance of companies with sustainable practices.

Investment opportunities

There are many listed companies that are actively reducing their carbon footprint and addressing carbon risk. A few examples of these companies are highlighted below:

“QBE Insurance is a signatory to ClimateWise in Europe, which provides a framework for insurance companies to build climate change into their business operations. They also participate in US NAIC Insurer Climate Risk disclosure each year,” said Karen McLeod, Authorised Representative at Ethical Investment Advisers Pty Ltd.

Karen McLeod also cites smaller companies like Blackmores who take carbon risk seriously. “The company’s headquarters, opened in 2009 has a carbon footprint one eighth of that of a comparable development, along with a range of additional environmental features. In addition they actively reduce product packaging and have an LPG vehicles fleet.”

It will be increasingly important for all companies to proactively address their carbon footprint. As the Responsible Investment Association Australasia (RIAA) states, “… almost every industry will be affected by climate change. Carbon efficiency will become an important component of economic efficiency and productivity. Many ways of making money today won’t be profitable tomorrow. In the automotive and aluminum industries, for instance, up to 65% of their value could be at risk if they fail to find ways to reduce their emissions and energy usage. Just as responsible investors want to be ahead of the curve in investing in clean technology, they want to avoid investing in companies that are not taking sensible, strategic moves toward energy efficiency.”

Investment risk

There are certainly a number of companies that stand to suffer reduced valuations in a low carbon environment. Deutsche Bank analysts recently reported that the hardest hit companies, in terms of net present value, will be Virgin Blue, Caltex and Alumina. BlueScope Steel, Qantas, Origin and OneSteel are also high on the list.

Karen McLeod of Ethical Investment Advisers believes that all prudent investors should review their portfolios in light of the changing carbon environment. “Smart investors need their portfolios to be future ready”.

Interested investors can find out more about ethical investing and climate change at our talk next week.

Talk on Ethical Investment and Climate Change
6:00 pm – 7:30pm Wednesday 16th March, 2011
Michael’s Oriental Restaurant and Function Centre
223 Padstow Road, Eight Mile Plains Qld

RSVPs for the seminar can be sent to Karen McLeod: kmcleod@ethicalinvestment.com.au, or by phoning 07 3333 2187.

Ethical Investment Advisers – is Queensland-based Ethical Investment Advisers Pty Ltd (www.ethicalinvestment.com.au) is an ethically minded and socially conscious financial services firm that specialises in ethical investments and self-managed superannuation funds. With combined experience of 36 years in the Australian investment market, its ethical investing services include strategy and insurance advice, ongoing management and investment portfolio management.

Karen McLeod
Ethical Investment Advisers
1/189 OXFORD STREET
BULIMBA QLD 4171
Phone: 07 3333 2187
Fax: 07 3399 3237
kmcleod@ethicalinvestment.com.au

This release was published on openPR.