The Point

Reverse-vending machine maker TOMRA aims to convert trash to cash

Every year, humans use 1.4 trillion beverage containers – a huge amount of material that potentially could be collected, reused and recycled.

It’s also an opportunity for “impact investors” looking for a way to make money and make the world better, believes Maxine Wille, an analyst with sustainable investing leader Regnan.

Regnan’s Global Equity Impact Solutions fund is an investor in Oslo-listed TOMRA, which makes “reverse vending machines” – those big metal kiosks that swallow your empty bottles and cans in exchange for a deposit refund.

TOMRA’s technology can identify a bottle or can by its shape, material and barcode, sort it into the right recycling queue and provide a payout.

“Now TOMRA has pioneered a machine which collects over 100 bottles in one go,” says Maxine. “You throw them in, and the machine sorts them.”

Last month TOMRA Cleanaway – a joint venture between TOMRA and waste management business Cleanaway and – won a deal to install its machines in parts of Victoria under a new recycling scheme.

Budget 2023: Stage 3 tax cuts remain centre stage

The federal budget didn’t contain much to move markets, but investors will be more interested in the impact of next year’s Stage 3 tax cuts, says Pendal’s Tim Hext.

The cuts will cost the government some $243 billion in lost revenue over the next decade, says Tim.

“Though I am less concerned about their affordability – after all, the government via the RBA owns the printing press – than the economic impact,” says Tim.

“The economic backdrop against which they will take place is important. We expect inflation to be nearer 3% and GDP nearer 1% by mid next year.

“This will make the tax cuts economically affordable, since their boost to inflation and activity will be manageable.

“But it means the RBA may be more reluctant and slower to cut rates.”

Crispin Murray: Pollution law shows investors need to keep a close eye on government

Government policy is a significant risk to investors, particularly in the resources and energy sectors, says our head of equities, Crispin Murray.

Sovereign risk can be more unpredictable than competitor risk, Crispin told a recent AFR conference.

“Competitors are largely focused on returns, so you can anticipate what they’re likely to do. But governments overlaying policy agendas can create quite unpredictable risks.

As an example, Crispin points to the federal government’s “safeguard mechanism” law which will regulate Australia’s 215 biggest polluters from July.

“They are still negotiating on details, but it means we’re asking mining companies, as an example, to quickly cut their scope-one emissions.

“That means cutting diesel emissions over the next seven years – and there’s no solution to that.

“I think we will see carbon price go up more than people realise. And it’s not beyond the realms of possibility we’ll see a carbon price by the end of the decade.”

How Pendal investors helped make the world a better place in 2022

As “stewards of capital”, Pendal undertook 562 ESG-related meetings with investee companies and issuers on behalf of investors in 2022.

These “engagements” – where we seek to influence positive outcomes on ESG matters – are one of the benefits of investing with an “active” investment manager.

Deep, fundamental research capabilities in this area are increasingly important, says Pendal’s Richard Brandweiner in our 2022 stewardship report (which you can find here).

“The challenge for investors is identifying authentic leadership that can leverage non-financial factors to generate real economic value,” Richard says.

“Since many of the basic hygiene factors are already considered, it will become particularly difficult for systematic processes like those used by the mainstream ESG score providers to assess this.”