stocks up as sustainability becomes profitable

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    http://www.theage.com.au/news/business/stocks-up-as-sustainability-becomes-profitability/2007/06/01/1180205512795.html

    Stocks up as sustainability becomes profitability


    Vanessa Burrow
    June 2, 2007
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    * THE MARKETS Shanghai metal gives local market leaders a lift

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    SUDDENLY carbon trading is a topic of fierce debate. And, as the major political parties outline their plans for carbon trading, we're getting a glimpse of who might win and who might lose economically.

    Elsewhere, the environment and how it will co-exist with industry is just as controversial. But some initiatives appear to be working.

    In Europe, Intercontinental Exchange carbon futures for December 2008 have reached a 13-month high of €25.15 a tonne. Yesterday, they rose 3 per cent to €23.70 a tonne after falling to €12 earlier this year.

    And, in Australia, geothermal energy explorers Petratherm and Geodynamics held on to Thursday's huge gains to end the week 8 and 9 per cent higher respectively as the S&P/ASX 200 Index gained 20 points, or 0.3 per cent, to 6333.5 points.

    According to Sustainable Asset Management Australia research director Francis Grey, investors have become progressively more choosy about where they put their money since Hurricane Katrina in August 2005 and the release of Al Gore's An Inconvenient Truth a year ago.

    SAM Australia, like its international arms, produces a sustainability index (the AuSSI) that includes 72 S&P/ASX 200 companies that are working hard to improve their environmental credentials (see graph comparing gains on the S&P/ASX 200, the AuSSI and the Dow Jones Sustainability World Index).

    It also has about $700 million under management in the SAM Sustainability Leaders Australia Fund and an equivalent international fund.

    By April 30, the Australia Fund had returned a net 22.7 per cent since the start of the financial year, compared with the 25.6 return of the S&P/ASX 200 Index — a healthy result.

    AMP Capital Investors has been operating similar funds for more than five years. Sustainable funds head Michael Anderson said people were looking for strong returns from companies that were environmentally and socially aware and had good governance.

    The AMP Capital Sustainable Australian Share Fund has returned an average of 18.36 a year, over five years.
 
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