Eco Investor Helps To Guide The Green Dollar
Victor Bivell has been an editor for 27 years and a publisher for 22 years. He is the founder of Eco Investor Media and the editor and publisher of Eco Investor magazine.
What lead you to establish Eco Investor?
In 1992 I published the Environmental Investment Directory of Australia, which was my first publication after giving up my day job as an editor. At the time some people said I was ahead of my time but being young I shrugged it off. But they were right, sales were modest and I was lucky to just get my money back on the project.
Public interest in environmental issues and ethical investment continued to grow and in 2005 I decided to try again, this time with a magazine.
I have no doubt we will continue to see more people wanting their investments to reflect their values and interests. Environmental investments are part of that as most people are disturbed by polluted and unhealthy environments. They want the man-made environment to be clean and healthy and as much as possible of the natural environment to be preserved.
Eco Investor is there to help these investors add an environmental theme to their investments.
What are you looking for when deciding whether or not to add a company to your coverage list?
Environmental investment is a positive screen that identifies companies that have a solution to an environmental problem. Lots of companies claim to be environmental but often what they are doing is more about sustainability. By that I mean they are more about using solutions rather than offering solutions.
Very early on I developed a three point method to identify environmentally positive companies. This looks at Environmental Activity – where the core business activity is a solution to an environmental problem; Environmental Focus – where at least 50 per cent of the company’s business activity is focused on the environmental activity; and Environmental Commitment – where the company has a commitment to being an environmentally positive business.
Tassal Group make the cut for their work in reducing the environmental impact of salmon farming | Image: Tassal
Less than 5% of ASX-listed companies make it onto your list. What does that tell us about the environmental consciences of Australian companies?
Eco Investor’s positive screen is one of the toughest in the world so I am not surprised that less than five per cent make it.
But that is not a bad thing. Most companies don’t make it because their core activity is addressing another problem, such a providing financial services, or retailing, mining, transport, agriculture and so on through the economy. All of these companies are potential clients of environmental companies as they can improve their sustainability by incorporating environmental products and services into their business operations.
Investors can judge the environmental conscience of these companies by how much they adopt sustainability.
Why is the cleantech sector so high risk for investors?
In normal circumstances, cleantech would be no higher risk for investors than any other business or technology sector.
But cleantech has many disruptive technologies and some of these can threaten major long term assets, such as power stations and coal mines, so cleantech can be more political than say biotech or infotech.
At present the two big risks are the Federal Coalition Government and the vested interests in the fossil fuel sector.
The Coalition Government is working hard to dismantle the success enjoyed in recent years by many environmental companies, particularly in clean energy. It has taken away some key supportive government programs and tried to take away others, which has damaged markets and investor confidence.
This has made it particularly hard for speculative companies – the early stage and innovative companies that do not have cashflow to support their development and rely on investors to periodically top up their equity.
It has also made it much harder to develop large infrastructure assets such as clean energy projects.
A change of Government could remove those risks almost immediately.
You make it clear that the information you publish is not financial advice. How easy is it to keep personal views out of your coverage?
As a journalist I know the difference between a fact and a personal view. Generally, I put facts in the stories and my views in the editorial. But some stories need a view, such as on the importance of a development or how a company may be traveling. In those circumstances I look at it from the investors’ point of view, both conservative investors and punters.
I put my money where my mouth is and I have both income generating and speculative environmental investments. That also helps me to see things from my subscribers’ points of view.
Eco Investor provides analysis as well as the bare facts.
Which environmental ‘themes’ are having the biggest influence on Australian business at the moment? What changes have you witnessed since you started publishing Eco Investor in 2005?
The biggest changes I’ve seen since 2005 was the boom in environmental interest and IPOs under Howard and Rudd, and the bust since Abbott became leader of the Opposition and then Prime Minister.
Environmental sustainability is still a big theme for business. I think most want to do the right thing with their energy, waste and water and to save on costs at the same time.
What are the urgent environmental issues that Australian businesses should be addressing but aren’t?
The urgent issues for business are energy, waste and pollution, and water, and I think many are addressing these. Certainly those with quality management are doing so.
Any hot tips for a stock that’s about to take off?
Eco Investor doesn’t do tips, but I’m happy to say that despite the problems at the speculative end of the ASX, there are a good and growing number of cleantechs at the top end that pay regular dividends, so yield investors are doing well.
Title image| Andreas Poike via Flickr (CC)