Almost 12 years ago—having already been screening global companies for environmental risk and opportunity for 11 years—Tony Tursich and Jim Madden published a list of “the top 10 green companies for 2011.” It was a point-in-time report from the portfolio management team of one of the country’s few environmentally-conscious funds. In 2010, Tursich and Madden were managing money for Portfolio 21 while today they lead the Calamos Sustainable Equity team (read more).
Almost no one describes companies as “green” anymore. ESG funds now number in the hundreds, with more launched every month. In the years since their original list was published, sustainable equity investing has gradually become mainstream, thanks to broader public awareness, regulation and climate change itself.
With their 30 years of expertise, Tursich and Madden have a perspective few others can offer about global equity opportunities. So, as 2021 draws to a close, we’ve asked the team to again provide a list for the new year. If you’re expecting to read about hydrogen-powered cars or wind turbines, you may be in for a surprise. As Tursich has explained, the team concluded long ago that thematic investment strategies aren’t the way to invest in ESG (see interview).
Over time, Madden says, “As investors, we have been especially interested in the way companies have adapted, or not, to the evolving landscape of natural capital constraints. Success has come to those who understood the environmental risks but, maybe more so, taken advantage of the emerging environmental opportunities. Below are some lesser-known companies who effectively adapted their business models during the last 10 years, increasing their probability of success in 2022 and beyond.”
Cowick Hill, UK
Creates and sells innovative, sustainable, high performance specialty chemicals relied on by industries and consumers.
2022 growth drivers:
As consumer demand for natural products has grown, Croda has shifted its business focus to meet the needs of its customers, including Unilever and Procter & Gamble. By 2030, over 75% of the company’s organic raw materials by weight will be bio-based.
This business model move has been driven by a decade of strategic acquisitions and organizational restructuring. In addition to these acquisitions, Croda continued to develop its sustainability credentials. In 2020, the company launched its Purpose, Smart science to improve lives™. Part of this initiative included its new sustainability commitment “to become the most sustainable supplier of innovative ingredients, providing solutions to some of the world’s biggest challenges in the coming decades.”
Croda recognizes that its business model, built on bio-based raw materials that absorb carbon from the atmosphere, will eliminate four times more carbon emissions from the atmosphere than the company emits across its entire operations and supply chain.
Irving, Texas
The world's leading innovative developer and producer of sustainable organic ingredients.
2022 growth drivers:
Darling’s business model has also been steeped in sustainability, transforming edible and inedible residual bionutrients into valued resources. But the company has not always marketed itself as an environmental leader. In fact, in 2017, as part of the Sustainable Equities team’s due diligence, the team met with Darling to better understand the company’s business model and to encourage the company to begin disclosing its resource conservation initiatives and associated impacts.
However, more impressive than the company’s improved disclosures are the company’s continued commitment to converting waste stream into value-added ingredients for health, nutrients and bioenergy. Through tactical joint ventures and acquisitions such as its 2009, Darling JV with Valero Energy Corporation and Diamond Green Diesel, Darling has built renewable diesel production facilities capable of producing hundreds of millions of gallons per year from animal fats, used cooking oil and inedible corn oil; waste streams acquired via other calculated acquisitions.
Lisbon, Portugal
A 225-year-old international group whose primary business is food distribution in Portugal, Poland and Colombia.
2022 growth drivers:
Jeronimo Martins is a Portuguese food retailer with a history dating back to 1792. Its evolution, expansion and rebranding has been extensive, and the company has demonstrated progress and future commitment to the area of sustainable sourcing. For instance, they’ve seen a 300%-plus increase in the number of products with sustainability certificates from 2016 to 2020.
The company is committed to guaranteeing that 80% of its food product purchases are sourced from local suppliers. In 2020, the goal was exceeded, achieving around 90%. The company also works to certify high impact commodities such as palm oil, paper and wood, beef and soy. For instance, to promote sustainable sourcing of palm oil, the company is a Roundtable on Sustainable Palm Oil (RSPO) member. Less than 1% of its beef comes from countries at risk of deforestation.
Paris, France
A global Luxury group, Kering manages the development of a series of Houses in Fashion, Leather Goods, Jewelry and Watches including Gucci, Saint Laurent, Bottega Veneta, and Balenciaga.
2022 growth drivers:
As the parent of Gucci, Kering has continually developed and evolved, ultimately becoming a pure player in Luxury in 2018. Three years earlier, the company developed and launched its environmental profit and loss methodology (EP&L). EP&L is a tool that enables the company to measure the impact of an economic activity on the environment, applying financial metrics.
According to the company, “Kering can thus use the EP&L to guide its sustainability strategy, improve its processes and supply sources, and choose the best-adapted technologies.” The development and subsequent implementation and application of this methodology makes Kering a leader in quantifying environmental risks and opportunities, a fundamental component of the Sustainable Equities investment philosophy.
Waukesha, WI
A leading global designer and manufacturer of a wide range of energy technology solutions, providing power generation equipment, energy storage systems, grid service solutions, and other power products to the residential, light commercial and industrial markets.
2022 growth drivers:
With growing awareness of the impacts that climate change and extreme weather is having, Generac is transforming its business model to be an energy solutions provider. As back-up power systems become more of a requirement and less of an option, the company’s product portfolio is evolving to include new products such as solar battery power systems.
With trailblazers Tursich and Madden part of the Calamos Investment team since August 2021, US, international and global sustainable equities strategies are now available. Additional offerings are planned.
Investment professionals, contact your Calamos Investment Consultant at 888-571-2567 or email caminfo@calamos.com to learn more.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
The information provided in this report should not be considered a recommendation to purchase or sell any industry, sector or particular security. There is no assurance that any industry, sector or security discussed herein will remain in a client’s account at the time of reading this report or that industry, sectors or securities sold have not been repurchased. The industries, sectors, or securities discussed herein do not represent a client’s entire account and in the aggregate may represent only a small percentage of an account’s holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
Past performance is no guarantee of future results.
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Archived material may contain dated performance, risk and other information. Current performance may be lower or higher than the performance quoted in the archived material. For the most recent month-end fund performance information visit www.calamos.com. Archived material may contain dated opinions and estimates based on our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions at the time of publishing. We believed the information provided here was reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance reflected at NAV does not include the Fund’s maximum front-end sales load. Had it been included, the Fund’s return would have been lower.
Archived material may contain dated performance, risk and other information. Current performance may be lower or higher than the performance quoted in the archived material. For the most recent month-end fund performance information visit www.calamos.com. Archived material may contain dated opinions and estimates based on our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions at the time of publishing. We believed the information provided here was reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.
Performance data quoted represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Performance reflected at NAV does not include the Fund’s maximum front-end sales load. Had it been included, the Fund’s return would have been lower.
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