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ENVIRONMENTAL LEADERSHIP TRUST SEEING GREEN New York Post; New York; Apr 8, 2001; Beth Piskora;
Full Text: OIL companies are traditionally left out of "socially- responsible" investment portfolios because they are thought of as polluters. But that's not the case at the unique Environmental Leadership Trust, a unit trust that invests in companies that have successful pollution prevention programs. "Our philosophy is that environmental costs are real costs for companies," said Jon Naimon, founder and president of Light Green Advisors, which managers the Environmental Leadership Trust." Companies that reduce their environmental costs reduce their overall costs and deliver a better bottom line to shareholders," he continued. "We have proprietary research that shows that companies that are reducing their environmental costs faster than their peers outperform. We find that means that we can invest in these companies, thus reinforcing their emphasis on reducing environmental costs, which we believe means they are better managed. It also means that over the long-term, our portfolio should outperform." Investors who followed this unconventional approach to "green" investing fared quite well in 2000, which was a difficult year for most socially responsible mutual funds. From its Oct. 26, 1999, inception through the end of 2000, the Environmental Leadership Trust generated a 10.92 percent return, 7.42 percent above the S&P 500. Naiman believes that companies with the lowest exposure to environmental costs have a distinct competitive advantage over their industry peers. In order for a stock to make it into the Environmental Leadership Trust, the issuing company must pass a screening process that takes into consideration industry trends in environmental emissions of toxic material, waste generation, spillage frequency of hazardous materials and environmental regulatory procedures. The portfolio managers also study the financials of any stock that's being considered for the portfolio. "Why shouldn't socially and environmentally responsible investors support companies that are doing the right thing?" asked Naimon. "These programs are progressively reducing society's environmental burden and contributing to the corporate bottom line at the same time." The holdings in the portfolio include Enron and Halliburton, two energy companies that are unlikely to show up in any other "green" fund. Halliburton, for example, provides oil drilling services, among many other resources. "Though [we do] not share Halliburton management's views of climate change and exploitation of the Arctic National Wildlife Refuge, [we] selected Halliburton based upon its spill prevention and success meeting environmental compliance requirements relative to its industry peers," Naimon said. Enron, which has natural gas pipelines and other energy services, is cited also for its success in spill prevention." Enron [has] a consistent environmental compliance record, success with waste minimization and comparatively low environmental cleanup responsibilities," said Naimon. "In contrast to many U.S. energy firms, Enron has committed the firm to addressing the climate change challenge and has purchased renewable energy assets over the last few years." The Environmental Leadership Trust is not a mutual fund but a unit trust, which means that its managers buy and hold stocks for long periods of time instead of trading in and out of them on a daily basis. But trusts are regulated like funds by the SEC, and shareholders can buy and sell their shares at any time. ----- Fund at a glance |