The Ethical Investor is Stockhead’s weekly look at ESG moves on the ASX. This week’s special guest is Evergreen Consultants’ founder, Angela Ashton.

  • Cement and concrete are the “last mile” of decarbonisation
  • Which ASX stocks are in the ‘green’ construction space
  • A talk with ESG expert, Angela Ashton of Evergreen Consultants

Our transition to carbon zero has largely focused on electric vehicles and power grids.

But when it comes to decarbonising concrete buildings, experts have hit a major brick wall, with some calling it the “last mile” of decarbonisation.

Concrete has become the second most consumed product on the planet, after clean water.

But producing concrete is a highly carbon intensive process that involves burning vast amounts of fossil fuel to generate extreme heat.

To put it in perspective, it takes 54,000 tonnes of cement to construct just one 30-storey tall skyscraper. So much so that concrete accounts for around 7% of the world’s Co2 emission.

Greening the cement production

At the heart of concrete is cement, which is made of clinker – a material mixed out of limestone, clay and sand amongst others.

The cement kilns used in the process have to be heated to a temperature of up to 1,450 degrees Celsius, which obviously releases a vast amount of Co2.

Current technologies to reduce this Co2 include substituting the clinker with more sustainable materials, like residual blast-furnace ash from coal-fired power stations.

Another technology being trialled includes preventing Co2 from being released into the atmosphere altogether. This is done either by injecting it into the ground, or into the resulting concrete itself.

ASX stocks in this space

On the ASX, companies that are developing ‘green’ cement technology include Calix (ASX:CLX).

Calix has a technology it calls Project LEILAC (Low Emissions Intensity Lime and Cement), which you guessed it.. reduces carbon dioxide emissions from cement.

Eden Innovations (ASX:EDE) also has a technology that aims to improve the strength and durability of concrete used in infrastructure, while reducing carbon usage.

The company says that all of its patented concrete admixtures enable production of concrete with reduced Co2 emissions.

Meanwhile, construction adjacent companies like First Graphene (ASX:FGR) has cutting-edge graphene that it calls the wonder material of the 21st century.

At just one atom thick, graphene is the thinnest material known to man, but is also said to be 200 times stronger than steel.


Share prices today:


Are we about to see ‘greenflation’?

While all these are well and good, the world is actually facing a paradox in the campaign to decarbonise.

New innovations and technology cost money to develop, lots of it. This would raise prices in the short term, with the unintended result being ‘greenflation’.

Tighter regulations, reluctance to finance fossil fuel projects, and increased investor focus on ESG could also make things more expensive during this transition phase.

To understand more, Stockhead reached out to Angela Ashton, an expert in ESG and founder of Sydney-based Evergreen Consultants.

Interview with Evergreen’s Angela Ashton

Evergreen Consultants is an independent investment consulting business, working with financial advisory firms.

Ashton founded Evergreen in 2016, and is ultimately responsible for all its investment activities. She has 30 years experience in financial services, and has worked for firms such as QIC and Van Eyk Research.

Evergreen Consultants founder, Angela Ashton.

Does decarbonising lead to inflation?

“The cost of decarbonisation is going to be very high. It means that certain commodities and skills are going to be sought after in order to create that decarbonisation pathway,” Ashton told Stockhead.

“So it will be good for growth as it will create economic activities, but it will also mean higher inflation because it’s going to put pressure on various parts of the economy.

“If we take the example of electric poles and wires, currently they’re not set up to take power from your house back to the grid.

“So even with this one example, you need to change whole new poles and wires. You can imagine the cost of doing all other things that need to be done for decarbonisation to occur.”

How do your clients (financial advisories) play to this thematic then?

“A lot of financial advisors find this whole decarbonisation thematic really challenging,” Ashton said.

“You can’t pinpoint one company that could fit in everyone’s portfolio.

“So what many financial planners do is that instead of looking at individual stocks, they look at funds.

“But even at the fund level, there’s really not many available that truly focuses on climate change and decarbonisation – those that we effectively call impact investing.

“Instead of choosing where to invest in, many funds are now looking at things people don’t want to be invested in, like tobacco, gaming etc.

“I believe decarbonisation is a long way down the ESG journey, and financial advisors are now only at the beginning of that journey.”

What’s Evergreen’s approach towards ESG investing?

“Our investment philosophy is based on the UN PRI, or the United Nations Principles of Responsible Investments, and RIAA which is the Responsible Investment Association of Australasia,” explained Ashton.

“We built a questionnaire that aligns with what those organisations think fund managers should be doing.

“This questionnaire is filled out by the fund manager, and that’s how we started to do our ESG fund manager ratings. That’s also how we’ve been able to do ESG ratings on 630 funds in a fairly short time. 

“The beauty of our approach is that it avoids innate biases that other approaches might have.

“Facebook is a great example where it is scored really highly by some groups, and really low by others. A lot of that is due to the way the questionnaires are formulated, or how the scoring is done.

“But by aligning with UN PRI and RIAA, we maintain consistency and avoid any innate biases.”

Looking ahead, what inflection points in ESG investing are we going to see?

“Legislation will be coming to Australia,” said Ashton.

“And there’s already discussions around how they will label funds just like what they’ve done in Europe.

“That will ensure that if an investor sees something that’s labeled a climate fund, it really is a climate fund.

“At the moment, there are funds out there that call themselves ESG or socially conscious, but they’re not. So there’s still a lot of greenwashing there.”

Other ESG news on the ASX this week

As reported by Stockhead’s green expert, Jessica Cummins:

Qantas Group (ASX:QAN) released a Climate Action Plan this week, highlighting sustainability as a key pillar of decision-making across all areas of business.

As one of the first airlines to commit to net-zero emissions by 2050, QAN said yesterday’s announcement of an interim target of 25% reduction by 2030 is designed to accelerate that progress.

Renewable energy giant and Fortescue Metals Group’s (ASX:FMG) green leg, Fortescue Future Industries, has inked a $50 billion deal with E.ON to deliver up to 5 million tonnes per annum of green, renewable hydrogen (GH2) to Europe by 2030.

Both entities said they will work together with their governments on how to achieve supply as fast as possible, in the spirit of the Australia-Germany Hydrogen Accord announced in June 2021 at the G7.


The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.