Innovest Strategic Value Advisors, Inc.

Energy Efficiency & Investor Returns: The Food Sector


Courtesy of Innovest Strategic Value Advisors, Inc.

Innovest Strategic Value Advisors, a financial research firm based in New York, London and Toronto, analyzed relative energy efficiency performance in the retail food chain sector. The study found that energy efficiency leaders achieved superior stock market and financial performance over the past three years.
Company-specific energy consumption data is usually not available in this sector (in general, only the most proactive companies disclose it in an effort to enhance stakeholder relations). To analyze performance in the absence of data, Innovest developed a comprehensive rating model comprised of 30 quantitative and qualitative metrics (shown in Appendix A).  Figure 1 shows that the six companies with above average energy management performance, taken as a group, outperformed the below average companies over the past three years by over 1,700 basis points (17 percentage points). Figure 2 shows that the energy efficiency leaders also outperformed over the past three years on price-to-earnings (85.6%), price-to-book (57.3%), return-on-assets (47.3%), return-on-equity (50%), return-on-invested capital (41.6%), and Tobin’s Q, a measure of intangible value (34.4%). This summary report does not include company-specific ratings and analysis. The full report, which includes this information, is available from Innovest.

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