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Share Watch – 26 September 2021

Share Watch –  Better Future Fund (ASX:IMPQ)

As it becomes more obvious that issues like climate change and diversity need to be addressed, more investors are looking to invest in companies that perform well on ESG, otherwise known as sustainable investing. It sometimes seems counterintuitive that this can also lead to good returns, but to date investors in the eInvest Better Future Fund (ASX: IMPQ) have experienced that the two can go hand-in-hand.

A great example of how investing in technology that is being used in the battle against climate change can also deliver strong returns is Calix (ASX:CXL) which is up over 450% over the last 12 months and has been a holding in IMPQ for a number of years.

Calix is an industrial solutions company dedicated to solving global sustainability challenges. One of the uses of their technology is a process to separate carbon dioxide in the lime and cement production process. This process has been put through its paces as part of Project LEILAC – in collaboration with some of Europe’s largest cement and lime companies.

The lime and cement industry is responsible for ~9% of global greenhouse gas emissions and therefore addressing the emissions in this sector is critical as we progress towards a net zero emissions economy.

Calix has announced partnerships with some large global companies on projects to help decarbonise their operations. For example, it executed an agreement with AdBri (formerly known as Adelaide Brighton) to co-develop a Calix calciner for lime production with carbon dioxide capture. Lime is used for producing steel, aluminium, rare earths and gold, but it emits 1 tonne of carbon dioxide for every 1 tonne of lime that is produced.

Calix also signed a memorandum of understanding with Pilbara Minerals (ASX:PLS) to develop a midstream lithium chemicals processing plant for a low-emissions lithium salt as an input for lithium batteries. It has also announced MOUs with Tarmac for a lime calciner project in the UK and RHI Magnesita to advance carbon dioxide emissions reduction in the refractory industry.

Calix recently announced that a New York based impact investor, Carbon Direct Capital Management, took a 7% stake in Calix’s LEILAC business for A$24.5 million, valuing the project at about A$350 million. This received a lot of interest, particularly as this is just one of a number of promising technologies that Calix is developing.

Financial indicators

The VIX fear gauge down by 3.20 points since 12 September to 17.75.

The Dow Jones Industrial Average up 190.28 points or 0.55% since 12 September to 34,798.00, the STOXX 600 down 2.05 points or 0.44% to 463.29 and the Shanghai Composite index down 90.04 points or 2.43% to 3,613.07.

Gold down to 1,750.00. US 10-year Treasury Bonds up to 1.454 and oil up to 73.95. Cryptos Bitcoin down by 3,128 points or 6.94% to 41,947.

ASX 200 down 116.30 points or 1.55% since 12 September to 7,406.60. The Aussie dollar down to 72.58 US cents.

Carbon Market Spot Prices

LGC $35.00                                                                 STC $38.90

ESC $38.60                                                                 VEEC $78.00

ACCU $26.00                                                              EU ETS €60.60 (up €2.46 this week)

NZU $NZ64.50                                                             UK ETS GBP59.20 (up 4.16 this week)

Sources: RenewEconomy, demandmanager,  Reuters, SMH, Market Watch, Ieta, Stockhead

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