Three companies that are building a better world
Professional investor Rupert Welchman of Union Bancaire Privée picks three stocks that are making a positive impact on the world.
How we live our lives and how we choose to invest our savings have typically been worlds apart. Happily, it has recently become possible to bring these two elements much closer together. There’s a growing number of listed companies that are working hard to understand their place in the world beyond simply generating profit.
Business leaders have a better chance of building strong foundations for equity returns when they understand that they can only deliver sustainable profits in the long term by respecting the environment in which they operate and the people their organisations affect. Positive impact as an investment strategy builds on this growing corporate self-awareness by championing companies that provide fixes to problems that will cost the planet more dearly in the future if left unattended.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The leader in LED lighting
We often find attractive opportunities in established companies that are culturally pivoting towards the beneficial outcomes generated by their products. One example is Signify (Amsterdam: LIGHT) – the lighting giant spun out of Philips in 2016. The company combines industry leadership in the global shift to LED lighting with a corporate strategy focused on net-zero carbon emissions, zero waste to landfill and a portion of employees’ pay related to sustainability targets. This refreshed corporate culture has already generated impressive financial results, with the company developing an ability to surprise the market positively. While no longer as attractively valued as it was, Signify still offers a decent 3% dividend yield.
Greener ventilation
Another company enjoying rejuvenation by combining strong leadership with a deep focus on sustainability is Trane Technologies (NYSE: TT), which was spun out of Ingersoll Rand last year. Trane focuses on ventilation and refrigeration systems, which represent a combined 25% of global greenhouse-gas emissions. With the US government’s focus on better ventilation in public buildings, it’s seeing strong demand for its products. Trane now partly bases compensation of its 2,300 top executives on sustainability indicators. It has set a target of saving its customers a gigaton of carbon dioxide by 2030 through the use of its products.
Muck to brass
Recycling is a growing source of value for investors as a circular approach to natural resources displaces our traditionally linear model. This opportunity extends far beyond civic refuse processing. One example is Befesa (Frankfurt: BFSA). Its business is focused on the industrial recycling of hazardous waste generated in steel and aluminium manufacturing. Befesa’s process diverts toxic material entering landfill and its end products can be used in place of virgin ingredients in cement, ceramics and insulation. With a 50% market share in Europe and Asia, it is well set to dominate this area of industrial-waste processing.
-
Investors will reap long-term rewards from UK equitiesOpinion Nick Train, portfolio manager, Finsbury Growth & Income Trust, highlights three UK equities where he’d put his money
-
The graphene revolution is progressing slowly but surelyEnthusiasts thought the discovery that graphene, a form of carbon, could be extracted from graphite would change the world. They might've been early, not wrong.
-
'Investors will reap long-term rewards from being bullish on UK equities'
Opinion Nick Train, portfolio manager, Finsbury Growth & Income Trust, highlights three UK equities where he’d put his money
-
The graphene revolution is progressing slowly but surely – how to invest
Enthusiasts thought the discovery that graphene, a form of carbon, could be extracted from graphite would change the world. They might've been early, not wrong.
-
A strong year for dividend hero Murray International – can it continue its winning streak?Murray International has been the best-performing global equity trust over the past 12 months, says Max King
-
The shape of yields to comeCentral banks are likely to buy up short-term bonds to keep debt costs down for governments
-
The sad decline of investment clubs – and what comes nextOpinion Financial regulation and rising costs are killing off investment clubs that once used to be an enjoyable hobby, says David Prosser
-
How to profit from the UK leisure sector in 2026The UK leisure sector had a straitened few years but now have cash in the bank and are ready to splurge. The sector is best placed to profit
-
Who won the streaming wars?The battle of the TV and film streaming giants for dominance looks to be entering a final phase. The likely winner may surprise you, says Simon Wilson
-
'Investors should expect a good year for equities'Opinion The economy is positive, and investors are still cautious, says Max King
