Companies compared on green performance
The potential of Australia's top 300 companies to thrive in a low carbon economy has been assessed by market analysts.
Research firm RepuTex has published a list of 13 leading companies from the S&P ASX300 index, Australia’s equivalent of the FTSE, which produce significantly less carbon per dollar of profit than their peers.
The highest performing company is Babcock & Brown Wind, which received a top RepuTex Carbon Rating due to its high renewable energy activities.
Other highly rated companies include Arrow Energy, Queensland Gas Company and Sims Group.
Hugh Grossman, head of research at RepuTex, said: “Companies with principal involvement in low carbon intensive activities are best positioned to mitigate carbon liabilities and benefit from market opportunities.
“In a traditionally dirty industry, Babcock & Brown Wind is able to generate electricity with 97% less emissions than its sector peers.
“When this is translated into life under an emissions trading scheme it will represent a considerable competitive advantage.”
While current discussion in Australia focuses on the shape and scope of a local emissions trading scheme, RepuTex argues from a company and investor perspective, a company’s relative emissions is the real million dollar question.
“Regardless of the shape and scope of a local scheme, at the end of the day it’s a simple equation, companies with lower emissions will be better positioned,” said Mr Grossman.
“These companies will be better insulated from any carbon tax, and better positioned to benefit from constraints on competitors.
“Other stocks will simply be playing catch up.”
The financial performance of companies that produce less carbon emissions than their sector peers is being tracked by RepuTex, with returns suggesting that ‘carbon optimised’ portfolios are getting the jump on the market.