|
 The Cupertino, California-based maker of the iPhone, the world's
biggest public company by market capitalization, has adopted a slew
of green policies such as expanded product recycling and using solar
power at its data centers. For managers who have made it a favorite
of the largest "green" mutual funds tracked by Thomson Reuters'
Lipper unit, the improvements bolster the appeal of a stock that's
risen 15 percent this year, 19th best among the Standard & Poor’s
100 index.
The confluence of a rising price and improving environmental
performance make Apple "the one stock you just can't ignore," said
Anthony Tursich, senior portfolio manager of the $498 million
Portfolio 21 Global Equity Fund, a green fund that bought Apple in
2011 after the company began providing more emissions data.
Tursich's biggest holding is Google Inc, which he bought only after
it made progress on renewable energy, reflecting how top U.S.
corporations are embracing green goals, and how the funds jump on
those firms once they start making those environmental moves.
Environmental fund managers may be broadening their shopping lists
in part because they have more money to deploy: For the 12 months
ended April 30 investors put $1.9 billion of new money into the 72
funds tracked by Lipper that use environmental criteria in their
investment decisions. That's still tiny relative to the $247.6
billion that went into all U.S. equity funds, but represents a 5
percent inflow that Lipper research head Tom Roseen said was
significant. The bulk of the new money, more than $1 billion, went
into the dominant $9.5 billion Parnassus Core Equity Fund, Lipper
said.
Apple is the top holding of the Parnassus fund, which bought most of
the shares in 2013, the year the fund rose 34 percent and beat 72
percent of peers, according to Morningstar. Through June 13 the fund
was up about 7 percent in 2014, beating 87 percent of peers.
Apple is also the top holding of the $2.9 billion Calvert Equity
Portfolio and the $118 million Green Century Balanced Fund, and is
the third-largest stock in the $2 billion Pax World Balanced Fund,
according to the funds' latest filings.
Fund managers cited a mix of reasons for warming up to Apple,
including reforms pushed by Chief Executive Tim Cook and the stock's
outlook. It is up 15 percent in 2014 through Monday on enthusiasm
for its iPhones and other pending products, as well as a stock split
and a dividend increase. [ID: nNrm8Db95J]
Apple had taken hits from activist groups like Greenpeace, which in
2010 called it "very weak" on climate and emissions matters, and has
faced scrutiny over the hiring of children at factories that make
its products.
It also earned a bottom score of "4" on its carbon footprint from
the Boston sustainability advocacy group Ceres. Ceres Senior Manager
Kristen Lang said Apple had not released enough information to get a
better score, such as making public its targets for reducing
greenhouse gas emissions. Google received a higher score of "2" from
Ceres, which praised its spending on renewable energy.
Among other things, Greenpeace said Apple was moving too slowly to
stop using hazardous materials like polyvinyl chloride plastic –
often used to insulate electrical cables -- and brominated flame
retardants in its products. Critics worried both materials could be
released from products during use or when older computers or power
cords are disposed in landfills.
In recent years, however, Apple has made changes and improved its
image with environmentalists. In April, Greenpeace called Apple a
leader for things like powering data centers with solar arrays, wind
farms and water. Ceres' Lang said Apple might get a higher score
currently based on steps it has taken since data for her groups'
report was collected last fall.
[to top of second column] |
In addition, Apple this year reported a sharp decline in number of
underage workers it hired at its supplier facilities.
Apple - whose board includes environmentalist and former U.S. Vice
President Al Gore - also last year hired former U.S. Environmental
Protection Agency head Lisa Jackson to oversee areas like cutting
toxins from its products.
Asked about the Ceres score, Apple spokesman Chris Gaither said the
company powers 94 percent of its global corporate facilities with
renewable energy, up from 35 percent in 2010. "Of course, the
cleanest energy is the energy you never use, and that's why we've
made efficiency such an important feature in Apple facilities and
products," he said.
UNUSUAL SUSPECTS
Many of the environmentally-aware funds tracked by Lipper have
bought other stocks that may not appear green at first glance - like
McDonald's Corp, oil driller National Oilwell Varco Inc, and
lubricant maker WD-40 Co.
Most of the funds also have broad mandates that allow them to go
well beyond owning only windmill-makers, and consider other matters,
such as firms' practices on hiring women, in their investment
decisions. Also, many specialized environmental companies are small
in terms of their total market capitalization, limiting the role
they can play in big portfolios and making them more important for
smaller and more narrowly focused "green" funds.
Where a top holding in the Pax World Balanced Fund is Google, with a
total market capitalization about $366 billion, the top holding of
the $177 million Pax World Global Environmental Markets Fund is
filtration company Pall Corp, with a total market capitalization of
about $9 billion.
That situation also means big companies that show some environmental
progress can find their way into those big green portfolios, even if
they aren't traditional environmental companies and don't receive
top grades from environmental advocates. Calvert bought McDonald's
and Walt Disney Co last year, citing changes like advanced sewage
treatment systems on Disney cruise ships and better land management
at McDonald's suppliers.
Ceres gave McDonald's a low score of "4" on its carbon footprint,
saying it had not set formal targets to reduce greenhouse gas
emissions and increase its use of renewable energy. It gave Disney a
slightly better score of "3" in the area, since the company set an
emissions-reduction target.
Neither McDonald’s nor Disney responded to requests for comment.
"Companies of this scale are always going to have issues," said
Calvert Senior Vice President Bennett Freeman. "What we look at is,
what is the strength of their commitment, their willingness to
address problems."
(Reporting by Ross Kerber; editing by Linda Stern and John
Pickering)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed. |
