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Corporate Social Responsibility
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4.01.2008 - 08:00am ET
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Recession Proof Cleantech Investing: The Recycling Industry
(CSRwire) NEW YORK, NY - April 1, 2008 - Between record high oil prices, the volatile
stock market and a recession, it's a tough time to be an investor. But
there's a little known bright spot on the market that actually benefits
from high oil prices - the Recycling Industry.
In fact, the Recycling Industry offers investors one of the few ways to
profit during the current recession, according to a report released by
Progressive Investor, "Investing in Recycling."
"Ever escalating energy prices, commodity price inflation and scarcity,
and global environmental concerns have coalesced into a "perfect storm"
for the industry," says Eric Prouty, Senior Energy Analyst, Cannacord
Adams.
Many people aren't aware of the central role the recycling industry plays
these days. It has become a backbone of our economy, pulling in $236
billion in revenues last year and employing over a million people. The
industry accounted for about 2% the U.S. gross domestic product in 2007.
At the current rate of resource depletion, especially from emerging
economies like China, the world literally can no longer satisfy demand for
paper and steel from virgin materials alone. Recycling has become an
absolute necessity for industrial growth and stability. We couldn't print
a newspaper, build a car, or ship a product in a cardboard box without
recycled materials.
"Although we usually think of the benefits of recycling as reducing waste
and protecting forests and habitats from mining and clearcutting," says
Rona Fried, editor of Progressive Investor, "it is also a key solution for
climate change. Making new materials from old ones is a classic example of
energy efficiency - it vastly reduces the amount of energy (and resulting
emissions) required to support our economy."
For example, making aluminum from scrap uses 96% less energy than from
virgin minerals, while making iron and steel from scrap requires 74% less
energy. Two thirds of the steel produced in U.S. is now made from recycled
materials.
Progressive Investor identifies the following trends benefiting the
Recycling Industry:
The higher energy costs go, the more economically valuable are
recycled materials. Example: energy accounts for 20-30% of the cost to
make metals such as aluminum and zinc.
Metal prices are rising sharply from strong demand - partly from
growth in India and China - creating strong economic incentives to recycle
all kinds of metals
Recycling benefits from the attention to climate change for its
ability to reduce the energy intensity of manufacturing and methane
generated by landfill waste.
Growing recognition that natural resources are scarce, finite, and
increasingly expensive to mine. Example: virgin copper and zinc supplies
could be completely exhausted within decades.
Rising concerns about pollution from discarded electronics
The report profiles the World's Top Recycling Stocks, including:
Casella Waste Systems (Nasdaq: CWST): regional solid waste company;
strong focus on recycling.
Metalico (AMEX: MEA): small cap metals recycler.
Schnitzer Steel (Nasdaq: SCHN): vertically integrated scrap metal
recycler and steel manufacturer.
LKQ Corp (Nasdaq: LKQX ): dominates the U.S. automotive replacement
parts market.
Interface (Nasdaq: IFSIA): leading carpet tile manufacturer uses a
high percentage of recycled material.
Sims Group (SGM.AX; NYSE: MM): the world's largest metals and
electronics recycler.
Investing in Recycling is a succinct overview of the industry and the
major opportunities for investors on the publicly traded and private
equity sides.
The sections are:
The State of the Recycling Industry
The Recycling Investment Landscape
Meet the Recycling Leaders
Analyst Conversation: Investing in Recycling
Recycling Industry Charts & Tables
The contributing analysts are:
Eric Prouty, Senior Analyst, Cannacord Adams
Matt Patksy, Managing Director, Winslow Asset Management
Jon Forster, Investment Manager, Impax Asset Management
About Progressive Investor
Progressive Investor is a monthly newsletter that guides investors and
analysts toward green investments. Published by SustainableBusiness.com,
it covers all green business sectors, including renewable energy, green
building and healthy lifestyle.
www.sustainablebusiness.com/index.cfm/go/progressiveinvestor.main.
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