How Eco Investor Helps Investors

Established in 2005, Eco Investor was Australia's longest running and number one source of information on environmental equities. It closed in 2019.

An important part of the magazine is the Eco Investor Database. This covers the Australian listed cleantech sector from ASX 300 companies through to pre-revenue micro caps, making it the best source of information on Australian cleantechs. If you want income from Australia's biggest and safest listed cleantech companies, or if you want to speculate on promising micro caps commercializing new technologies and business ideas, the Database will tell you the universe of these stocks on the ASX.

There are over 2,200 stocks on the ASX. That's a lot of work to sort out which ones are environnmental. Fortunately, Eco Investor has already done the research.

Our Positive Screen

Eco Investor developed a rigorous three-point positive screen to identify environmental investments.

1. Environmental activity - where the core business activity is a solution to an environmental problem;

2. Environmental focus - where the company is wholly or largely focused on this environmental activity; and

3. Environmental commitment - where the company has a commitment to being an environmentally positive business.

The business activities that pass this screen include clean energy and energy efficiency, waste management and recycling, pollution control, sustainable food, environmental engineering, timber alternatives, carbon sinks, and many other clean technologies.

When applied to the ASX, currently about 110 listed companies meet these criteria. Eco Investor analyzes the business stage, risk/ return and investment performance of these securities so investors can identify if they are suitable for their investment strategy.

To help manage risk and return, investments are classified using Eco Investor's “Portfolio Status Strategy”. This is a Four Stage Core-Satellite Strategy that identifies the status a security should have in a portfolio. The four stages are:

Core Securities: Securities with a track record of profits and dividends.

Pre-Dividend Securities: Securities that are profitable but do not yet pay dividends, or securities that once were profitable and dividend paying but have temporary issues with one or both of these.

Pre-Profit Securities: Securities where the companies are earning revenue but are not yet profitable.

Pre-Revenue Securities: Securities where the companies are not yet earning revenue from the sale of core products.

The Portfolio Status Strategy allows all investors, from the conservative to the aggressive, to identify the securities that match their risk and return profile.