Emerging economies have been moving into clean technology and green energy at a pace that would surprise many. A recent World Economic Forum report, produced with the Boston Consulting Group, identified some 1,000 companies profiting handsomely from sustainability.
For example, Brazilian cosmetics giant Natura awards bonuses based on contributions to the company’s financial, environmental and social targets.
Indian agriculture manufacturer Jain Irrigation Systems encourages farming practices that maximize crop yields with less water.
"Normally, you wouldn't expect to find these kinds of advanced sustainability strategies in emerging markets," says Knut Haanaes, a BCG partner. “But these companies truly are sustainability driven and impressive.”
The ascension of emerging markets is putting additional pressure on global resources, as food, energy and water consumption rise. Rapid economic and population growth are also contributing to the carbon challenge.
“These kinds of companies teach us something that will be important everywhere for the big, multinational Western companies. We have to be very efficient in using resources,” Haanaes says.
The WEF report scoured the emerging markets for companies that were profitable and practicing sustainability. The pool of more than 1,000 companies was whittled to 16 companies creating innovative solutions, which could be replicated to reach many customers over nations, and in some cases, continents. And lucky for investors, 13 are publicly traded. For U.S. investors, they’re predominantly accessible through exchange traded funds.
Here are nine of the companies and some of the funds that own shares in them, based on data provided by Morningstar senior research analyst Annette Larson. (Annual revenue figures are in U.S. dollars.)
By Heesun Wee
Posted 12 March 2012