Linde (US)

Linde, which merged with Praxair in 2018, is one of the largest industrial gas suppliers globally. Industrial gases play an important role in resource efficiency — with diverse applications such as enhancing energy efficiency in industrial processes, pollution or emissions testing, wastewater treatment, de-sulphuring processes, insulation, and preservation in the food industry.

  • This stock has stable and high-quality growth characteristics, derived from long-term contracts with customers and a consolidated industry supply side. Industrial gas companies own the infrastructure at their customers’ product sites, so this presents large switching costs and thus high barriers to entry.
  • Linde also enjoys significant pricing power — not only because cost increases are typically embedded into customer contracts but also because although industrial gases are part of customers’ total manufacturing costs, they are a high-value-added essential component with low cost.
  • Led by a management team with a solid operational track record, the company has demonstrated strong returns among its peers, with a structure that optimizes regional locations for a profitable and robust distribution model.
  • Now forming the largest player in the global industrial gas industry, the merger with Praxair looks to continue to generate operating synergies and lower capital expenditures for the combined entity.

Schneider Electric (France)

Schneider is a leading global specialist in efficiency solutions across the energy management spectrum, with operations in more than 100 countries.

  • Powered by the “digitization of everything” — technology driving the ability to measure, analyze, and therefore manage everything in real time — Schneider enables customers in a breadth of industries to realize powerful efficiencies and cost savings. Whether in the context of industrial automation, commercial building management, smart homes, smart grids, or data centers, “intelligent functionality” and connected systems can be put to work to optimize energy efficiency and infrastructure performance across a vast array of applications.
  • Particularly appealing to customers is Schneider’s open architecture and platform approach, allowing for nimble adaptation to myriad customer needs. Schneider solutions can realize between 50% to 80% cost savings for engineering and maintenance and reduce carbon footprints by as much as 50%.
  • As a business, the company has enjoyed resilient margins, consistent returns on capital, strong cashflow1 generation, and a solid track record of acquisitions. Tightening energy efficiency standards provide a supportive tailwind over the medium and long term. Incorporating recycled content into its products, with 12% of its revenues accounting for activities that contribute toward a circular economy, Schneider received the Award for the Circular Economy — Multinational at the 2019 World Economic Forum in Davos.

Royal DSM (Netherlands)

Royal DSM (DSM) supplies nutritional ingredients such as vitamins and nutraceuticals across well-diversified end markets. It sells such products into the feed, food and personal care industries.

  • DSM helps to improve livestock health and improve efficacy of feed, which serves to lower input-related waste, mitigate against emissions and limit harmful byproduct cultivation
  • DSM’s work in mitigating methane from animal farming is particularly relevant to environmental solutions. DSM’s transition from a diversified chemicals producer to a business focused on a more stable, and fast growing, nutrition industry is driving higher returns on capital, improved free cashflow1 generation and reduced earnings volatility.
  • DSM is driving its end-market stakeholders towards more sustainable production methods. The company has a strong focus on sustainability, implemented by a solid management team and led by an internal sustainability leadership team. The majority of DSM’s end market is focused on nutrition. In addition, a very strong and conservatively managed balance sheet and high-quality management team provide solid support for the path forward.

Pax Global Environmental Markets Fund Top 10 Holdings

(As of 04/30/2023)

Holdings are subject to change.

This information is not a recommendation to buy or sell any security.

1Cashflow is the movement of money in and out of a company. Cash received represents inflows, while money spent represents outflows. The cash flow statement is a financial statement that reports on a company’s sources and usage of cash over a specified time period.


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