Environmental stocks rocketed in 2006

The value of leading environmental technology companies almost tripled during the course of 2006, according to an organisation which tracks the value of eco-friendly firms.

The Impax ET50 is a tracking index designed as a tool to allow financial analysts to keep tabs on leading environmental companies and follow trends within the sector.

The largest 50 companies working on purely environmental technologies are listed by market capitalisation – the value of those companies’ stock.

In 2005 the combined value of these corporations was US$47.5bn but by the end of 2006 that figure had risen to US$120.1bn.

Steady growth was seen across Europe whilst, perhaps surprisingly, there was a dip in the market across the Atlantic in America.

The biggest gains were, predictably, seen in the emerging economies of Asia.

Wind energy and solar companies continue to dominate the top ten but the fact that an Irish insulation firm clinched seventh place points to a growing interest in energy efficiency.

“2006 was the year that the environmental sector went mainstream,” said Bruce Jenkyn-Jones, director of investments at Impax Asset Management.

“Renewable energy companies were the ET50’s largest with solar and wind stocks accounting for 23% and 24% respectively of the total index, up from 10% and 13% in 2005.

“European companies have extended their dominance, accounting for 52.5% in 2006, up from 44.9% in 2005.

“But Asian companies made the largest proportionate gains. They now account for 14.7% of the index compared with only 3% in 2005.

“US companies have declined, making up 26.8% of the index compared with 40.5% in 2005.”

He said 2007 looked rosy for most environmental tech companies, with 25% growth expected to be the norm, but pressures to keep prices low to stay in line with the competition could reduce profit margins in some sectors, including solar power.

The Impax ET50 top ten at the end of 2006 were:

  • 1. REC (solar, Norway)

  • 2. Suzlon (wind, India)

  • 3. Vestas (wind, Denmark)

  • 4. Gamesa (wind, Spain)

  • 5. Suntech Power (solar, China)

  • 6. Solarworld (solar, Germany)

  • 7. Kingspan (insulation materials, Ireland)

  • 8. Q Cells (solar, Germany)

  • 9. Stericycle (clinical waste, US)

  • 10. EDF Energies Nouvelles (wind, France)

    Sam Bond

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