Positive Impact Portfolios: May roundup

May was another month when plastic was making headlines.

FacebooktwitterlinkedinmailFacebooktwitterlinkedinmail   by Damien Lardoux, 17th June 2019

Malaysia announced that it will be shipping out 450 tonnes of contaminated plastic waste imported illegally from countries like US, China and UK. This waste will be shipped back to their country of origin. The principal issue is that this plastic waste is low-quality and contaminated, making it non-recyclable.

According to the Environment Agency, the UK exported over 600,000 tonnes of recovered plastic waste abroad in 2018, with Malaysia as the first destination since China’s plastic import ban started in January 2018. It means that over 25% of our plastic waste produced in the UK is exported and partly ends up in landfills and in the oceans.

The government is starting to wake up to the problem introducing a ban on single used plastic straws, drink stirrers and cotton buds from next April.

However, the scale of the problem means this ban lacks ambition. Improving the recycling of our plastic waste and reducing our overall plastic consumption should become key focus points of governments, corporates and individuals.

Tomra, a Norwegian listed company held in our Positive Impact Portfolios, is a great example of how to eradicate plastic pollution. Tomra is the world leader in the field of reverse vending, collecting and recycling aluminium cans, glass and plastic bottles. Users get an instant reward when returning used containers, motivating repeated use and raising collection rates. With only 55% of the plastic bottles used in the UK being recycled vs over 90% in Norway, the UK would benefit a lot from this technology and we would need the government to back it as quickly as possible.

In terms of performance, May saw the EQ Positive Impact Portfolios slightly down from the April high due to further trade tensions between the US and the rest of the world. This resulted in riskier investments like equities and especially those tied in any way to China, sold off while bonds rallied as investors sought safe havens.

However, we remain strong supporters of global exporting companies like Tomra which has developed technologies with strong growth potential irrespective of trade tensions. With the increased focus on plastic waste, Tomra’s revenues are expected to grow by over 10% this year and the stock remains a strong performer within the portfolios.

There are more company examples in our latest quarterly update addressing both environmental and social challenges.

Contact our team

Have a question about the EQ Positive Impact Portfolios? Please email enquiries@eqinvestors.co.uk, we’re always happy to hear from you.

About the author: Damien Lardoux

Damien has an MSc in Management from Reims Management School and an MSc in Wealth and Asset Management from ESCP-EAP Paris Business School. He is also a CFA charter holder, being a regular member of the CFA Institute and CFA UK society.

Before joining EQ Investors, Damien worked for Bank of America Merrill Lynch being responsible for asset allocation, security selection and portfolio construction. Damien now acts as the portfolio manager for the EQ Investors Balanced, Positive Impact and Multi Index portfolios. He also co-chairs our Fund Selection Committee.

Damien is a devoted sportsman, playing judo and squash on a regular basis. He also enjoys hiking, to very far places such as the Himalayas and Kilimanjaro.

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