We believe that steering companies with more questionable records, or in more polluting industries, towards sustainable practices should help to manage investment risks over the long term, improve returns and benefit the planet. Here are three stocks that are proving themselves and working towards reducing their carbon footprint.
An eco-conscious cement maker
HeidelbergCement (Frankfurt: HEI) is a global leader in aggregates, cement and ready-mixed concrete production. The main component of cement is clinker, a by-product of sintering limestone (heating it so that the minerals fuse together). Its production is carbon-emission intensive.
HeidelbergCement has been increasingly focused on growing its share of the market’s sustainable low-carbon products, designing factories that operate with alternative raw materials and fuels. Currently, the company allocates about 80% of its research and development (R&D) spend on reducing energy consumption in its
Subscribe to 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
manufacturing process.
In June 2021, the firm announced plans to build the world’s first carbon-neutral cement plant in Sweden. This is expected to start operations in 2030. In 2019, it became the first cement company to announce an emissions-reduction target that is in line with the Paris Agreement on climate change, which aims to prevent a rise in the Earth’s temperature over 2°C by 2050.
Playing a part in renewable energy
Steelmaker ArcelorMittal (Amsterdam: MT) is committed to achieving net-zero carbon emissions by 2050 and has a broad and flexible transition strategy in place. The company has identified three distinct pathways that have the potential to deliver a significant reduction in carbon emissions: clean-power steelmaking, using hydrogen and electrolysis; circular-carbon steelmaking, which uses circular-carbon energy sources that remove carbon dioxide from the atmosphere – such as waste biomass – to replace fossil fuels; and fossil-fuel carbon capture and storage, where the current method of steel production is maintained but the carbon is then captured and stored or reused, rather than emitted into the atmosphere.
The company is also making new steel products that help their customers’ transition to a low-carbon future, such as materials for wind turbine construction. As the second-largest steelmaker in the world, it is well positioned to develop the required technology and capture the potential competitive advantage.
Carbon footprint improvement
BP (LSE: BP) aims to get to net zero across its operations by 2050 or sooner. It is also aiming for a 50% cut in the carbon intensity of products it sells by 2050 or sooner. The firm plans to install methane measurement at all major oil and gas processing sites by 2023 and reduce methane intensity of operations by 50%. It also intends to increase the proportion of investment into non-oil and gas businesses over time.
We believe the oil and gas sector as a whole faces a profound challenge in adapting to the energy transition. But we think BP is better placed than others to manage the transition effectively due to the greater operational flexibility it has developed in the years since the Deepwater Horizon oil spill, caused by the explosion of an oil rig off the coast of Louisiana.
-
The best travel websitesLooking for the best travel websites to make your holiday planning easier? From finding flights to researching restaurants, we’ve got you covered for all your travel essentials
-
FTSE 100 dividends: where to find the best yields for UK equitiesFTSE 100 dividend forecasts have plateaued but investors can still find good yields in UK equities with payments expected to reach £78.6bn in 2024
-
LSL Property Services: a profit-machine in the property sectorLSL covers every area of the residential real estate market and should thrive after its shake-up
-
Global car shares slide amid lower demand in China – what happens now?Has the car sector run into trouble? Britain’s Aston Martin and Germany’s Volkswagen are among the key automobile brands that have issued profit warnings.
-
Qualcomm could acquire rival Intel – but securing the deal won't be easyA tie-up between Qualcomm and its semiconductor rival Intel would be a coup. But multiple regulatory and commercial hurdles lie ahead.
-
How to invest in the quiet market monthsHere's how to invest in the quiet market months, since “sell in May” hasn’t paid off this year.
-
Spire Healthcare: invest in the booming demand for private healthcareSpire Healthcare is one of the few listed companies benefiting from the growing trend in private healthcare. Should you invest?
-
Are insurance companies a good investment?Costs may be soaring but the insurance sector is currently going through one of its most profitable periods. The market has been slow to realise the opportunity here
-
Google's legal challenges – could it be broken up?Google is fending off legal challenges from both the EU and the US. But would breaking it up actually work?
-
Apple shares slide amid underwhelming demand for new iPhoneApple shares fell last week after disappointing demand for the new iPhone 16 Pro. Can Apple depend on AI to give it a boost?
