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Environmental Productivity


ENVIRONMENTAL PRODUCTIVITYTM

The efficiency with which companies use and impact natural resources

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Environmental Productivity


ENVIRONMENTAL PRODUCTIVITYTM

The efficiency with which companies use and impact natural resources

Environmental ProductivityTM :

accounts for the efficiency with which companies use and impact natural resources

We envision a world where greater efficiency in the use and impact of natural resources will allow for sustainable global prosperity. This will require much greater awareness of these risks and opportunities by both business leaders and investors. Terra Alpha’s Environmental Productivity process is intended as one approach to building the true cost of nature into our economic decision-making.  

Environmental Productivity analysis incorporates any natural resource that can be quantitatively measured to allow for both trend and comparability analysis. Currently, the most commonly available data is in the areas of Energy (Carbon/GHG Emissions), Water use, and Raw Materials consumption (Waste streams).  More limited, though developing, information sets in forests, soil, and key factors for certain agricultural sectors are of increasing interest to us, as well.

We work to demonstrate that environmentally productive business practices enhance long-term returns for businesses and patient capital investors. We use Environmental Productivity measures and analysis throughout our own investment process.  We believe that companies that fail to adapt the our changing environmental and society are at risk and those that recognize these challenges can capitalize. (For more information on how we invest, please contact us at: info@terraalphainvesments.com.)

Bubbles efficiency graphic

Why Consider Environmental Productivity?

The world today faces a complex array of natural resource challenges. Global population and related economic growth is driving ever higher levels of resource consumption, causing record totals of carbon emissions, shortages of freshwater and key raw materials, and greater magnitudes of waste streams.

world population increase

Our global economic system today annually uses or negatively impacts 60% more natural resources than our planet can sustain. As the earth's population triples from its 1960 level thirty years from now in 2050, left unchecked, the demand for earth's finite natural resources is expected to triple by 2050, as well. 

At the very least, this rising tide of demand/supply imbalance will lead to rising prices and price volatility for raw materials, and greater supply disruption for water and agricultural assets.

 
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Environmental Productivity

In a resource-constrained world, Environmental Productivity (EP) analysis is an essential tool all business leaders and investors should include in their decision-making tool box to enhance returns. This report offers both businesses and investors an outline for how to consider Environmental Productivity in their decision making and provides resources for both parties to take next steps.
 

See our report: Environmental Productivity: Enhancing Business and Investor Decision-Making

 

 

Carbon

The world has entered an era of unprecedented energy demand and production. Companies that diversify their energy sources, improve efficiency, and reduce emissions will be better positioned to provide long-term investment returns in a future replete with shifting energy sources, fluctuating prices, uncertain regulatory environments, and political and economic instability.

Greenhouse gas emissions, primarily from the use of fossil fuels, are embedded into the very fabric of our economy. The impacts of these emissions pose real threats to our society and our global economy. This report offers both businesses and investors an outline for how to consider greenhouse gas emissions in their decision making and provides resources for both parties to take next steps.

See our report: Emitting Money: Why Carbon Efficiency Matters for Businesses and Investors

Water

Limited or no access to water - what was once a distant concept to businesses - has now become reality for many and a near-term challenge globally. Global water resources are becoming increasingly stressed, and the impacts of this stress reach across all sectors.  Competition for water can disrupt operations, damage reputation, and constrain growth. Companies that proactively assess the exposure of both their direct operations and global supply chain to water-associated risks will have a competitive advantage over their peers and be more successful in the long term.

 Terra Alpha operates on the premise that Environmental Productivity (the efficiency by which companies use and impact natural resources) will enhance business and investors risk-adjusted return. This report focuses on the business case for sustainable water management. It highlights the risks, opportunities, and resources available for businesses and investors to measure and manage them.

See our report: Navigating Rough Waters

Waste

Material extraction and waste generation are both increasing as global consumption grows. The idea of production with the end use, impact, and any residual in mind - a “circular economy” - can increase resource availability for production and create value throughout a company’s operations. Companies that can reduce material extraction, achieve little to no waste during processing, and recycle, reuse, or resell what is leftover, will realize considerable positive returns and limit their exposure to resource scarcity in the future.

Companies that strategically optimize resource efficiency and recover maximum value from waste streams will be best positioned to outperform in an increasingly resource-constrained world. This report offers an investor case for considering corporate materials and waste factors in the investment process, and provides resources for businesses and investors to take the next steps. 

See our report on waste: Investing in a Resource-Constrained World

 


Terra Alpha developed Environmental Productivity as a proprietary measurement to gauge how effectively companies will be able to navigate a future marked by natural-resource constraints across the global economic system.