What’s in a green investment trust? From firms making new material from throw-away clothes, to breaking down non-stick pans, how Jupiter Green invests

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  • Jupiter Green is a leading environmental investment trust
  • Manager John Wallace highlights some of Jupiter Green’s portfolio companies
  • One of them is Renewcell, which converts waste clothing into a new textile

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There is a common misconception that so-called green investment trusts invest extensively in renewable energy projects to pay dividends.

But while green energy is an important part of many departments, there is an increasing amount of money being invested in developing leading companies to improve the environmental impact of industries ranging from semiconductors to fashion.

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One such company is Swedish textile recycling firm Renucell, of which investment trust Jupiter Green is a recent investor.

Its technology tackles the enormous environmental impact of clothing, by taking old items and turning them into a new material to make clothes look fresh.

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Renewcell converts factory cuts into pulp which is then turned into a textile fiber

Jupiter Green, managed by John Wallace, invests in a range of so-called impact companies and first bought into the textile company last year.

Most clothing ends up in landfills, so in 2012 a group of scientists at the Royal Institute of Technology in Stockholm decided to launch RenewCell.

Scale-up’s technology dissolves materials such as worn-out jeans and production scraps into biodegradable pulp that is then converted into textile fibers.

A patented material called circulose is used to make new fabrics.

This material offers ‘huge climate benefits as it tackles the need to produce virgin fiber, through processes that can be highly polluting through the use of chemicals and resources – water, energy, and cotton production, land Through the use of,’ says Jupiter Green’s Wallace.

It’s already making an impact in the industry, working with high street brand H&M, which invested in Renewcell in 2017 and holds 10 percent equity in the company, and denim brand Levi’s.

Renewcell's patented material Circulose is used to make new fabrics

Renewcell’s patented material Circulose is used to make new fabrics

It has a maximum production capacity of 60,000 tonnes per annum which is a relatively small scale.

But a €30.75million loan from the European Investment Bank will reportedly be used to build Renewcell’s first full commercial-scale textile plant.

Wallace adds: ‘RenewCell is currently the only commercial scale recycling of clothing material in an industry that currently employs some very volatile practices – for example, when luxury fashion brands burn unsold stock, some One that has recently attracted negative press attention.

It fits well into the diversified portfolio of Jupiter Green, which seeks to invest in environmental solutions across infrastructure, resource efficiency and demographics.

Jupiter Green is one of only three trusts in the environmental sectors of the Association of Investment Companies (AIC). It has outperformed the broader sector and given returns of 33.5 per cent, 76.4 per cent and 88.1 per cent in the last year, three years and five years respectively.

It is trading at a discount of 1.73 percent from the net asset value and due to its specialist nature and small size, Jupiter Green has a relatively high running fee of 1.76 percent.

Wallace took over from longtime manager Charlie Thomas as head Jupiter Green, who left the trust earlier this year. Wallace has been at the Trust for seven years and has a background in environmental technology.

Jupiter also invests in Green Evoqua that helps protect water sources from 'forever chemicals'

Jupiter also invests in Green Evoqua that helps protect water sources from ‘forever chemicals’

Forever dealing with chemicals found in non-stick pans

Among his other top picks in the portfolio are manufacturers Monolithic Power, First Solar and Evoqua, a ‘water technology’ company.

Evoqua is a small- to mid-cap company listed on the New York Stock Exchange, which provides water and wastewater treatment.

It operates in 10 countries including the US, Canada, UK and India and recorded revenue of $1.4 billion last year.

It aims to tackle ‘forever chemicals’ such as polyfluoroalkyl substances (PFAS), which are found in fast-food wrappers, non-stick cookware and stain-resistant clothing.

The bonds of these substances can take decades to break down and accumulate in lakes, rivers and wells, threatening biodiversity.

This is in line with the UN’s Sustainable Development Goals not only on clean water and sanitation, but also on health and wellness and renewable energy.

Evoqua claims that its digestion technology installation produces enough renewable energy to meet the electricity needs of 5,000 US homes per day.

“While exploring alternatives to PFAS is a focus for environmental solutions investors, our environment is already dealing with PFAS. The Evoqua provides effective water treatment for PFAS and other emerging contaminants, says Wallace.

First Solar designs, manufactures and sells solar panels and recently started two new factories

First Solar designs, manufactures and sells solar panels and recently started two new factories

Semiconductor firm looking to improve energy efficiency

Monolithic Power is another US listed company in Jupiter Green’s portfolio. It’s a semiconductor company that doesn’t seem like an obvious sustainable option, but its efforts are focused almost entirely on energy efficiency, from computer servers to LED lighting.

Wallace adds: ‘The technology of the Monolithic is already being used in the automotive and computing industries, but the potential for adoption in other sectors is huge, especially with the renewed push to decarbonize the US economy. ‘

And Monolithic has done well this year; Despite a good start to the year due to shortages and rising demand for semiconductor chips, its shares have risen nearly 50 percent year-over-year.

Lastly, Wallace highlighted First Solar, which designs, manufactures and sells PV solar modules.

The solar industry is growing rapidly…

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