This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Green Investing: 4 Stocks With Falling Emissions And Rising Profits

Stocks in this article: CSXECLELLMT

Mary-Lynn Cesar, Kapitall: Worried about climate change? These green stocks could make your portfolio more eco-friendly. 

The United Nations’ 19th annual Climate Change Conference concluded on Saturday with little progress made in the effort to reduce greenhouse gas emissions and combat global warming. This had been viewed as an opportunity to lay the groundwork for the formation of a universal climate agreement - to replace the Kyoto Protocol – at the 2015 session in Paris.

Read more from Kapitall: Do Barnes & Noble Sales Signal Problems For the Book Industry?

Instead, after two weeks marked by a hunger strike, walkouts, and general discord, the 195 countries ultimately acquiesced to modest compromises. Delegates decided to replace “commitments” with “contributions” in the language of the to-be-drafted 2015 deal to appease India and China, both of whom believe their developing economies shouldn’t be held to the same standards as developed nations.

The conference also led to the decision to establish a “loss and damage mechanism” to help vulnerable countries with loss and damage attributed to climate change. And lastly, developed countries were asked, instead of required, to submit details of their plans to honor a climate finance pledge to provide $100 billion in funding to developing nations by 2020.

Going green and seeing green

While the US government has yet to firmly commit to combating climate change, several US business have taken the initiative to enact greenhouse gas emission reduction policies. The UK-based CDP (formerly known as the Carbon Disclosure Project) - an independent, not-for-profit organization -  tracks, measures, and publishes information regarding the environmental impact of companies across the globe. In September, the CDP released its S&P 500 Climate Change Report 2013 , an annual study of greenhouse gas emissions and climate change policies  at the biggest corporations in the US:

  • S&P 500 companies invested $50 billion in emission reduction, saved 129 megatons of CO²e (embodied carbon), and reported $4 billion in savings in 2012.

  • 85%, or $3.5 billion, of the savings came from twenty companies on the index.

  • 20 companies were responsible for almost 90% of all carbon emission reductions.

In addition to illustrating the trends and results of companies’ emission reduction strategies, the CDP’s findings challenge the belief that reducing emissions will hinder GDP growth. According to the report, emissions from S&P 500 companies fell by an average annual rate of -2.9% last year while the US GDP grew by an average rate of 1% and the S&P compound annual rate by 14.3%. The CDP states, “Not only did S&P 500 respondents reduce emissions in a growing economy, but they also increasingly attribute such reductions to their own designed efforts.”

Investing ideas

The CDP’s S&P 500 Climate Change Report 2013 includes scores, emissions, and details for each company on the index. Companies with the highest performance scores are listed in the Carbon Performance Leadership Index. Firms with effective and comprehensive climate change strategies, as demonstrated by significant emission reduction, are placed within the “A” band.

We began with a universe comprised of the S&P 500 stocks included in the “A” band of the Carbon Performance Leadership Index. Since the CDP report showed that economic growth and emission reduction can occur simultaneously, we decided to look for signs of increasing profitability within that universe of stocks. Specifically, we screened for stocks with rising diluted normalized earnings per share (EPS) for the past three consecutive years.

EPS refers to the amount of profit allocated per outstanding share of common stock. And investors should note, diluted normalized EPS tends to be both lower and more conservative than normalized EPS.

We were left with four stocks on our list.

Click on the interactive chart below to see sales data over time.

Do you think climate change strategies play a role in the rising profits of these green stocks? Use this list as a starting point for your own analysis.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,817.90 +7.84 0.04%
S&P 500 2,069.41 +5.91 0.29%
NASDAQ 4,754.8920 +41.9220 0.89%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs