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Reaching the next level
Environmental investment i no longer for the ethically conscious, it is a growing market
Elsewhere in Europe, Alfa Laval is among Sweden's biggest engineering groups. It now derives more than 40 per cent of its revenues from energy efficiency products and services and rapid growth in this segment of the business has contributed to the company’s impressive top-line growth. Alfa Laval also has a number of smaller environmental units - from water treatment equipment, to ballast tank cleaning and biofuels – with organic growth rates far above group average.
Across the pond, US industrial gases group Praxair, with a market capitalisation of over $25bn (£13bn), has significant exposure to environmental markets. Praxair supplies a range of gases to the water and wastewater treatment sector, emissions testing, insulation and incineration markets to name just a few.
The company has earmarked the energy market and the supply of hydrogen to the refining process - for fuel desulphurisation- as areas of particularly strong growth going forward, while the promise of large-scale CO2 sequestration remains a remarkable long-term opportunity.
With these companies and many more, investors can balance the security offered by large, established businesses, with the staggering growth of the environmental sector.
Investment opportunity aside, the fact that mainstream companies are developing green products and services is a profoundly positive step for the environmental cause. Start-ups will always be the first to jump on new business opportunities. Their involvement is vital in terms of discovering what is profitable, demonstrating what regulation is needed, and building a viable marketplace. But the involvement of big business takes the industry to the next level. Only with the financial clout and resources of large companies can we reverse the damage wreaked upon the planet over the past few centuries.
But it is not just the investors that benefit. As mainstream companies throw their resources behind the environmental cause, there will be a step-up in the fight against climate change. Start-ups were necessary to sow the seeds for what is now a thriving market. Now we need the financial might of big business to take it to the next level.
Ian Simm is chief executive of Impax Asset Management
