The Pax World Global Environmental Markets Fund (PGRNX) invests in companies around the world that are developing innovative solutions in the areas of energy (renewable energy and energy efficiency), water (water infrastructure and technologies, pollution control), waste (waste management and technologies, environmental support services) and sustainable food and agriculture. We believe the leading companies in these markets are fast becoming major drivers of global economic growth. The following are examples of these companies:
- GEA Group AG (3.2%*)
- Legrand SA (2.4%*)
- Stericycle, Inc. (2.6%*)
- Xylem, Inc. (1.8%*)
- Murata Manufacturing Co. (2.9%*)
GEA Group AG
GEA is an engineering firm that designs process technology and components for companies with demanding production processes. Approximately 70% of the company’s revenue is from the food and energy industries. The company helps its customers, which typically have energy-intensive processes, reduce energy consumption, waste generation and emissions levels. For example, the company’s separators and decanters are used to treat industrial and municipal wastewater by removing water from sludge, decreasing disposal costs and reducing energy and water consumption.
Legrand SA specializes in the design, manufacture and distribution of products and systems for electrical installations and digital building infrastructures, many of which are designed to optimize energy use, minimize greenhouse gas emissions and reduce materials. Some of the clean technologies Legrand offers are electricity measurement devices, efficient lighting and heating management, efficient transformers for buildings and electric vehicle recharging stations. Legrand reports that with its lighting management systems and presence detectors, users can trim their power bills by as much as 55%. In addition, Legrand's electric and digital building infrastructure is used in smart grid networks to facilitate data exchange to optimize energy consumption.
Stericycle provides waste management and complementary services to a wide range of industries. Stericycle’s Sharps Management Service, which provides reusable containers to clients, has prevented more than 73 million plastic containers from ending up in landfills. The company’s pharmaceutical waste disposal program helps healthcare industry clients properly dispose of pharmaceutical waste. Stericycle has also implemented waste management programs to help clients properly segregate their waste streams, which reduces the need for incineration. As a result of these efforts, Stericycle says that approximately 10% of the company’s U.S. treatment capacity is incinerated, down from more than 30% in 2001.
Xylem, Inc. is a water infrastructure company covering both clean and waste water applications. The company is focused on both developed markets where aging infrastructure requires upgrading, as well as emerging markets, where population growth and urbanization is increasing demand. Approximately 40% of the company's revenue comes from products which move, test and treat water, predominantly for utility/municipality customers. The remaining 60% of revenue comes from industrially focused water treatment and infrastructure applications including pumps, irrigation and testing equipment, with end market customers including energy, agriculture, shale gas and construction markets.
Murata Manufacturing Co.
Murata Manufacturing was established in 1944 as a ceramic capacitor manufacturer. Based on its superior ceramic process technology, Murata has earned a strong market share in the global ceramic capacitors & filters markets. Murata is now diversifying into super-capacitors and other ceramic-based wireless module businesses, which can significantly increase the energy efficiency of these devices. This makes Murata an industry innovator and a leader in advanced components that reduce: material use (through miniaturization), heat loss, electricity usage and production waste. Backed by good cost management, Murata has consistently maintained high margins. It is also aggressive on dividend increases and share buy-backs. Earnings should continue to grow due to opportunities in the smartphone market, tablet market growth and yen depreciation. The firm is also a leader in environmental reporting, general CSR programs, and in the development of advanced “Eco-friendly Products”.
*Pax World Global Environmental Markets Fund holding as of 3/31/14. Holdings are subject to change.
This information is not a recommendation to buy or sell any security.