Environmental changes a chance for investors  

The Australian has a report on global warming driven opportunities in the cleantech sector in Australia - environmental changes a chance for investors. There isn't a lot to choose from in the local market, with the preferred picks being companies like Energy Developments (landfill gas), Ceramic Fuel Cells (cogeneration), GeoDynamics (geothermal energy) and (not quite so clean) Origin Energy (coal seam gas).

TO professional investors, climate change is not just a problem, it's an opportunity.

Many of the processes that will be used to fight, or ameliorate the effects of climate change will make huge profits -- and that's where any self-respecting investor wants to be.

The investors who hope to get a head-start in climate-change winners are those involved in sustainable investment, a subset of ethical and socially responsible investment (SRI). Sustainable investment concentrates on supporting technology, infrastructure and business models that reduce carbon emissions, improve efficiency and conserve natural resources -- particularly in sectors such as energy, water, and materials -- as well as working to cut pollution and reverse existing environmental damage.

Much of the opportunity set trawled through by sustainable investors looking for stocks that will benefit from addressing climate change is found in the sector called "cleantech", the term used to describe companies involved in renewable energy, biofuels, energy efficiency, water purification technology, salinity, carbon sequestration projects, alternative engine technology, electrical switching devices, clean coal technologies and new materials.

Sustainable investors are hoping to save the world, but they want to make money doing so. "We definitely want to make money for our investors, but we want to do it in stocks that meet our criteria for having a positive effect on climate change," says James Thier, executive director of leading ethical/SRI fund manager Australian Ethical Investment (AEI).

"Climate change is a business opportunity for a lot of companies, and it's important for investors to remember that. Governments across the world are underpinning that business growth through mandatory renewable energy targets. In Australia, for example, the government is talking about 20 per cent of the nation's energy needs coming from renewable sources by 2020. That's going to have to be supplied by somebody. It's a huge opportunity."

SUPERANNUATION funds are emerging as a crucial driver in the shift towards a carbon-constrained economy, according to a key report. ...

The report, Carbon Counts 2008: The Carbon Footprints of Australian Superannuation Investment Managers, was provided by Trucost, a UK-based consulting firm recognised as a leader in the analysis of the environmental performance of companies.

It examines 14 of the largest superannuation funds in Australia, accounting for $31.6 billion in equity holdings, and looks at the greenhouse gas emissions associated with 100 equity portfolios that employ different investment styles.

"This will have a very significant impact on the investment strategies of super funds," says Andrew Barr, policy and research manager for the AIST. "It provides a solid base of data.

For example, it shows that the average carbon intensity of 14 funds was 357 tonnes of carbon dioxide emitted per million dollars of revenue. This is actually better than the average for the ASX 200 Index, which is 370 tonnes, but obviously there is a great deal of room for improvement. The figure of 357 tonnes is 20 per cent larger than the MSCI All World Developed Index, for example.