Five companies delivering both environmental impact and strong returns
The Rize Environmental Impact 100 UCITS ETF remains one of the top performing SFDR Article 9 ETFs this year. The fund is aligned to the six environmental objectives of the EU taxonomy and has benefited from its broad exposure to a range of environmental sub-sectors. Legislative developments such as the US Inflation Reduction Act and EU Green Deal Industrial Plan have supported not just clean energy but also investment in sectors such as carbon capture, energy efficiency, pollution control and energy storage. Given its all-encompassing nature, the strategy has been well positioned to capture these tailwinds and as a result the Foxberry SMS Environmental Impact 100 NTR index has returned +14.37% year-to-date (as of 06 June 2023).
Below we look at five companies in the fund that are not only making a positive net impact on the environment but have also generated strong returns for investors this year.
Alfa Laval is a Swedish company that specializes in the manufacturing and supply of equipment and solutions for heat transfer, separation, and fluid handling. The company is recognized as a leading global provider of solutions in areas such as energy efficiency, environmental protection, and food processing.
Alfa Laval has returned +27.31% year-to-date. Its focus on innovation and sustainability has contributed to its success. When it published its 2023 Q1 earnings on April 25th, it disclosed revenue of SEK 14.1 billion which was around 5% higher than consensus analyst forecasts. It also disclosed net income of SEK 1.5 billion, which exceeded forecasts by an even higher 19%. It unveiled 14.9% organic sales growth (23% in the energy sector specifically) supported by easing supply constraints following lockdowns but also improving demand for its high-margin pumping systems.
Itron is an American technology company that is at the forefront of the utility industry’s digital transformation. Itron offers a wide range of solutions for electricity, gas, and water utilities. The company’s products and services enable utilities to manage resources efficiently, optimize operations, and improve customer service. The company specializes in smart meters, data analytics, and communication networks that enable utilities to collect and analyse data for better decision-making.
Itron has returned +34.00% year-to-date. It continues to leverage advanced technology that helps its utilities customers enhance grid reliability, reduce energy waste, and drive sustainability in the industry. On May 4th, it announced Q1 2023 net income and EPS of USD $22.4 million and $USD 0.49 respectively, which were both over 360% higher than analyst forecasts. CEO Tom Deitrich attributed the results to “strong operational execution underpinned by improved component supply.” This prompted several analysts to raise price targets and recommend a buy on the stock.
Fluence Energy is a global leader in energy storage solutions. The company provides advanced battery-based energy storage systems that enable the integration of renewable energy sources and enhance grid flexibility. Fluence Energy’s storage platforms help utilities and commercial customers to optimize energy usage, stabilize grids, and deliver reliable power supply. With its expertise in battery technology, software controls, and grid optimization, Fluence Energy plays a crucial role in enabling the transition to a more sustainable and resilient energy infrastructure.
Fluence Energy has returned +42.86% year-to-date. For some time the market was concerned the company had a long road to profitability, but this is no longer the case. At its Q2 2023 results announced on 10th May, the company declared revenue of $USD 700 million which was 66% higher than forecasts. Whilst the company made a net loss of $USD 25 million, this was significantly less than the $USD 38 million analysts expected. In response, Bank of America abandoned its bearish stance on the company stating that near-term opportunities now outweighed the long-term risks. Analyst Julien Dumoulin-Smith raised his stock-price target by 85% to $26 from $14 and said the financial results supported “visibility to a better-than-expected profitability ramp.”
SMA Solar Technology AG, based in Germany, is a prominent player in the solar energy industry. The company designs, develops, and manufactures innovative solar inverters and monitoring systems. SMA Solar’s products are essential components in photovoltaic systems, converting the energy generated by solar panels into usable power for homes, businesses, and utility-scale projects. The company’s inverters are known for their efficiency, reliability, and advanced grid management capabilities.
SMA Solar Technology has returned +49.21% year-to-date. SMA Solar’s commitment to renewable energy and its continuous technological advancements have positioned it as a key player in the solar industry. At its Q1 2023 earnings, SMA announced it delivered more than 3.2 gigawatts of inverters in Q1, a 16% year-over-year increase. Revenues also soared over the quarter by 67% to $USD 367 million and the order backlog rose to around EUR 2.5 billion. The company recently started building a 20 GW inverter factory at its headquarters in Hesse, Germany. Furthermore, it is exploring investing in a factory in the US to capture subsidies on offer by the US Inflation Reduction Act.
Maxeon Solar Technologies
Maxeon Solar Technologies Ltd is a leading global supplier of solar panels and solar energy solutions. The company focuses on high-efficiency solar photovoltaic (PV) modules that deliver exceptional performance in a wide range of applications. Maxeon Solar’s panels incorporate innovative technology and materials to maximize energy production and withstand challenging environmental conditions. The company’s commitment to sustainability and its dedication to research and development have allowed it to consistently push the boundaries of solar technology.
Maxeon Solar Technologies has returned +75.97% year-to-date. Its solutions continue to contribute to the global transition towards clean energy and a more sustainable future. At its Q1 2023 results on May 10th, the company revised FY2023 sales higher and swung to profitability surprising the market with EPS of $USD 0.46 compared to an EPS loss of $1.45 a year earlier. The company noted strong customer demand and announced it booked several new projects in North America with production now booked out through 2025. It also noted it was “actively looking for opportunities to expand (its) North American supply chain” given the favourable backdrop of clean energy subsidies provided by the Inflation Reduction Act.
 Bloomberg, as of 30 May 2023. Alfa Laval 2023 Q1 Results, May 2023. Available at: https://www.alfalaval.com/globalassets/documents/investors/english/quarterly-publications/2023/2023-q1-quarterly-report.pdf
 Bloomberg, as of 30 May 2023. Itron Q1 2023 Results, May 2023. Available at: https://investors.itron.com/news-releases/news-release-details/itron-announces-first-quarter-2023-financial-results
 Bloomberg, as of 30 May 2023. Fluence Energy Q2 2023 Results, May 2023. Available at: https://ir.fluenceenergy.com/news-releases/news-release-details/fluence-energy-inc-reports-second-quarter-fiscal-2023-results
 MarketWatch, “Fluence Energy’s stock surges after BofA abandons bearish stance on the pure-play ESS investor”, May 2023. Available at: https://www.marketwatch.com/story/fluence-energys-stock-surges-after-bofa-abandons-bearish-stance-on-the-pure-play-ess-investor-365df407
 Bloomberg, as of 30 May 2023. SMA Solar, “SMA success in North America: Installed capacity in the large-scale plant sector exceeds 20 gigawatts”, May 2023. Available at: https://www.sma-uk.com/newsroom/current-news/news-details/news/5325-sma-success-in-north-america-installed-capacity-in-the-large-scale-plant-sector-exceeds-20-gig.html
 Bloomberg, as of 30 May 2023. Maxeon Solar Q1 2023 Results. Available at: https://mediaroom.maxeon.com/2023-05-10-Maxeon-Solar-Technologies-Announces-First-Quarter-2023-Financial-Results