Stocks pivoting to sustainability set to boom post-pandemic
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Special Report: Since the outbreak of COVID-19, governments globally have been pumping fiscal stimulus into their economies, with an emphasis on sustainable, scalable tech.
Policymakers across the world have spent the last few months focused on propping up their economies in the face of the COVID-19 pandemic, and much of the cash being splashed has been routed to tech companies that are supporting sustainability.
Last month, the Australian government’s long-await technology roadmap to bring down carbon emissions over the next 30 years was unveiled and, with it, a clear focus on investments in low-emissions technologies.
One particular ASX-listed small cap that is perfectly positioned to take advantage of this surge in interest and funding is Security Matters (ASX:SMX), one of very few companies using blockchain technology to protect brands and ensure the integrity of its supply chains.
Security Matters can mark, track and trace any raw material or end-product, be it solid, gas or liquid, and securely store information using blockchain technology.
A unique feature of SMX’s technological platform, is that it offers a transition to a new regulatory approach, one that focuses on the entire value chain circle.
“This approach offers economic incentives for the stakeholders across the value chain and facilitates cooperation between them. Such an approach is based on an expansion of the familiar idea of ‘carbon credits’, adjusted to the plastic value chain,” says Haggai Alon, SMX CEO & Founder.
A good example to illustrate this approach would be for plastic packaging. It is beneficial from an economic perspective to have a regulatory approach focusing on the entire value chain.
This will yield financial advantages by preserving the value of plastics in the market (more than €100bn a year in the EU). This means that plastics will be worth more, making it worthwhile to preserve these plastics in order to make use of them again.
Producers of new products will have an increased incentive to reduce their dependency on virgin plastic materials, thereby reducing their need to purchase more Plastic Credits or allowing them to sell such credits.
Furthermore, they would receive an additional incentive to use recycled plastic materials as this would allow them to receive supplementary Plastic Credits. Bringing an end to the existing practice of discarding used plastic materials.
From an environmental perspective, it will encourage plastic recycling and reduce the usage of virgin plastic materials in plastic products — thereby significantly influencing the carbon footprint and pollution. This would relieve the pressure on natural resources.
Security Matters is well placed to drive commercial solutions for sustainability having recently joined the World Business Council for Sustainable Development, a CEO-led organisation of over 200 “forward-thinking global companies”.
The WBCSD represents combined revenues of roughly $12 trillion and 19 million employees.
It aims to connect companies, sectors, and different stakeholders to deliver results that companies alone cannot deliver positioning position.
This isn’t Security Matters’ first rodeo when sustainable and environmental impacts are concerned.
Back in April, it signed up global chemicals giant BASF to use its plastic traceability technology, in an effort to enable physical and digital tracking of closed loop recycling, authenticate sustainability claims and improve sorting of plastic waste.
The partnership leverages BASF’s extensive experience in plastic additives, regulatory capabilities, and understanding of the plastics value chain.
Alon says we need to be looking beyond the “take, make, waste” approach and focus on solutions that have a less damaging impact.
“By providing transparency of product lifecycles, we can create an entire technology-driven ecosystem that promotes circularity and sustainability across a wide range of industries. In partnership with other leading global brands also on the WBCSD, we can accelerate the progress towards a more innovative, resilient and productive economy,” he said.
WBCSD president and CEO Peter Bakker said this approach was the reason it was so pleased SMX had joined.
“There is a huge potential for this kind of technology to revolutionise industries including fashion, electronics, agriculture, gold and precious stones,” he said.
“We look forward to working with Security Matters to help advance our shared goals.”