April 22nd, 1970, saw the celebration of the first ever Earth Day. This movement was established by former US senator, Gaylord Nelson, with the purpose of raising awareness of climate change and to encourage sustainable actions. The catalyst for Nelson was a catastrophic oil spill in California 15 months prior, where approximately 3 million gallons leaked into the Santa Barbara coastline (1). 20million Americans took part in the demonstrations of the first Earth Day, and the event swiftly gained traction across the globe and is now observed annually in over 190 countries. Earth Day, therefore, marks an important day in the calendar.
The theme for this year’s Earth Day is ‘Invest in Our Planet’, an initiative that is particularly pertinent to our Ethical Investment Plans. We have decided to take this opportunity to highlight three companies that our Ethical Plans invest in that are advancing the sustainability of the planet.
Republic Services ♻
One company that positively impacts the planet is Republic Services, a waste management and environmental services provider in the US. The company boasts an extensive history of recycling – a vital process in reducing our global footprint. Last year, Republic Services recycled a staggering 4.6million tons of various commodities including cardboard, metals, and oil (2). The company plans to increase this by over 34% by 2030, as well as aiming for a 35% reduction in its direct and indirect emissions(2).
Republic Services has numerous innovative methods of recycling materials, however, its ability to convert waste into renewable energy really sets them apart. The company has established 75 projects across its sites which transform the landfill gas produced by waste into various low-carbon energies. An example of this is renewable natural gas, an alternative fuel which produces 70% less greenhouse gas emissions than diesel (2). Republic Services, and the range of services it provides, is playing a pivotal role in developing a circular economy.
What Pictet think:
“We like Republic Services’ leading position in the North America waste sector with the second largest network and a proven track record of consistent growth.”
Republic Services features in the Pictet Global Environmental Opportunities Fund.
Microsoft is establishing itself not just as a market leader in its industry, but also in sustainability. It has already achieved a remarkable feat of net-zero carbon emissions – decades ahead of most companies and countries. Microsoft even has ambitions to eliminate the carbon it has emitted since it was founded in 1975 by 2050 (3). Other bold targets include replenishing more water than it consumes, as well as being a zero-waste company by 2030 (4).
Microsoft is undoubtedly one of the most prominent companies across the globe, and it is using this influence to assist communities with their environmental goals. The company has committed to allocating $1bn to its Climate Innovation Fund, where it will invest in technologies and solutions that combat climate change (3). In addition, through its ‘AI for Earth’ scheme, Microsoft has provided over 850 grants to organisations, across 110 countries, to support their efforts in preserving ecosystems (4). Microsoft has also recently launched a Sustainability Calculator to enable companies to understand and reduce their environmental impact.
What Microsoft have to say:
“We remain dedicated to building a world better than the one we found, and to helping our customers and partners achieve the same.” Brad Smith, President & Vice Chair and Dr. Lucas Joppa, Chief Environmental Officer, 2021 Sustainability Report
Microsoft is part of the recently introduced, Legg Mason ClearBridge US Sustainable Leaders Fund.
Smart Metering Systems (SMS) 📏
SMS’ products, which include energy management and carbon-related data solutions, position the company to benefit from, and accelerate, decarbonisation in the UK. As its name suggests, the company’s services are built around smart meters, devices perceived by the UK Government as essential in its transition to a greener economy (5). The Government aims to replace every energy meter in the UK with a smart meter by 2026, a decision estimated to be the equivalent of removing 26 million cars from the road for a year (5). SMS is expected to play a crucial role in fulfilling this initiative, with over 28 million energy meters still to be exchanged (6). Similar to Microsoft, SMS is leading in terms of its net-zero initiatives, with the company aiming to achieve this by 2030.
What SMS have to say…
“SMS is operating at the centre of the UK’s changing energy system, creating smarter energy solutions to deliver the net zero agenda.” Tim Mortlock, CEO, 2021 sustainability report
Smart Metering Systems is a holding in the Liontrust UK Sustainable Future Growth Fund.
To wrap up 🎁
The innovative products and services provided by Republic Services, Microsoft and SMS are not only reducing their emissions, but also facilitating the sustainable transitions of countless companies and communities. From an investment point of view, the double-digit annualised returns generated by the shares of these companies over the previous 5 years demonstrate that investing in our planet can also benefit our portfolios. (7)
However, we cannot rely on these companies alone to achieve our preservation goals. Earth Day, with over 1 billion annual participants worldwide (8), presents an invaluable occasion for us to understand the negative implications of our actions on the planet, and to learn about the methods in which we can positively affect it.
- Data from Morningstar looking at 5 years from the end of March 2022.