“We’re delighted to have Paul join Trillium. His long history as an innovator in the field of SRI augments the deep talent already in place at Trillium,” commented Trillium CEO Matt Patsky.  Paul has worked with Trillium staff over the years on various projects, including the co-founding of SIRAN (Social Investment Research Analyst Network, a national group of analysts working to promote dialogue with companies about corporate responsibility). “Everyone looks forward to having him on the Trillium team,” Matt said.

Paul joins us at a very exciting time, as we are experiencing significant growth in institutional and individual assets in the past year. Our strong performance record and shareholder advocacy victories have been generating increasing demand for our services. “Having another experienced portfolio manager allows us to effectively manage this growth,” he added.

Paul told Investing for a Better World, “I am very excited to join the outstanding team of socially responsible investment (SRI) professionals at Trillium, to help further build the brand and expand our footprint into new channels. I also look forward to leveraging my experience integrating environment, social, and governance (ESG) research with financial analysis to continue to build strong portfolios for clients. Trillium is at the forefront of ESG integration, and I am thrilled to be a key member in helping to chart this evolving course.”

Prior to joining Trillium, Paul was a vice president for sustainable investment business strategy at Calvert Investments, leading SRI product and business development, with a particular focus on the institutional and international arenas. He also previously held senior positions within Calvert’s Equities and Marketing Departments. Prior to Calvert, Paul was a portfolio manager for SRI at The Dreyfus Corporation. At Dreyfus he was responsible for social research and advocacy for the Dreyfus Premier Third Century Fund and its variable annuity counterpart, the Dreyfus Socially Responsible Growth Fund. He also served as a research analyst in the Social Awareness Investment program at Smith Barney Asset Management, then a division of Citigroup. Paul started his career in the field as an analyst with the Council on Economic Priorities, a nonprofit known for the influential consumer guidebook Shopping for a Better World.

Paul is a former treasurer of the United Nations Environment Programme Finance Initiative (UNEP-FI) and a former co-chair of its Asset Management Working Group. In addition, Paul serves on the board of the Social Investment Forum. A Chartered Financial Analyst, he holds master’s degrees in anthropology and education from New York University and Roberts Wesleyan College, respectively.

Paul is a frequent commentator on SRI to the financial media. He was co-project lead on the influential UNEP-FI report of the Asset Management Working Group, Fiduciary Responsibility – Legal and Practical Aspects of Integrating Environmental, Social and Governance Issues into Institutional Investment.

by Chris Lindstrom, an early investor in Mamma Chia

When many people hear the word “chia” they think of little ceramic pets that sprout green leafy “hair.” But a growing number of people know it as a miraculous seed that is one of the most nutritious whole foods in the world – and soon, they will know it as a delicious vitality beverage. Mamma Chia is an organic, chia-based food and beverage company based in San Diego, backed by a provisional patent that will be launching its first-to-market chia vitality beverage later this year.

Mamma Chia contains hundreds of tiny, beautifully bloomed chia seeds suspended throughout, giving it an enjoyable “mouth feel” and unique depth and glow. The beverages come in Blackberry Hibiscus, Cranberry Lemonade, and Raspberry Passion. Chia seeds contain powerful nutrients such as Omega-3 (8 times more than salmon), antioxidants (30% more than blueberries), fiber (25% more than flax seed) and protein (70% more than soybeans).

For centuries, chia has been valued by the Aztec and Indian tribes of Mexico for its outstanding health benefits, and even credited with giving the famous long distance runners of the Tarahumara their extraordinary stamina.

Mamma Chia is developing cooperative relationships with chia farmers to help support their organic certification, social justice programs and overall community growth. The company has also committed to giving back 1% of revenues to help build healthy local food systems. Mamma Chia is a certified B Corp, a member of 1% For The Planet and a founding member of the Slow Money Alliance.

The functional beverage industry is a rapidly growing $10 billion dollar market. Mamma Chia is presently available for private placement. If interested, please contact Matt Patsky, CEO of Trillium Asset Management Corporation at mpatsky@trilliuminvest.com

by Natasha Lamb, MBA

Cummins Inc. (NYSE – CMI) is the technology leader in the manufacture of diesel, natural gas, and hybrid engines in the U.S., working to improve fuel efficiency and reduce emissions.  Cummins has outperformed peers in meeting the demand for lower-emissions engines, which has given the company a strong competitive advantage, as customers replace older vehicles to meet new Environmental Protection Agency (EPA) guidelines.   Cummins’ technological solutions comply with both the stringent U.S. EPA 2010 emission standards and Tier 4 regulations, which take effect in 2011. The latter will require a 90 percent reduction in particulate matter and a 45 percent reduction in NOx emissions.

Emissions reduction has been a longstanding company priority; greater than half of the
$2.4 billion Cummins spent on R&D in the last 10 years has been invested in emission reduction technologies.  Cummins is also working on developing biodiesel compatible products and currently offers engines that can function on a 20 percent blend of biodiesel versus the industry average of 5 percent.  Further, Cummins is a member of the EPA Climate Leaders Program, an EPA industry-government partnership that works to develop comprehensive climate change strategies.  As such, the company has committed to reducing its impact on the global environment by completing a corporate-wide inventory of its greenhouse gas emissions based on a quality management system, setting aggressive reduction goals, and annually reporting its progress to EPA.

While Cummins participates in the highly cyclical truck market that has been in the midst of a sharp downturn, truck purchases have been at unsustainably low levels with the average fleet age the oldest in two decades.  Demand for new, more efficient engines will drive forward demand and market share gains – boding well for Cummins’ performance during the recovery.

www.o-i.com/

by Natasha Lamb, MBA

Glass is a true cradle-to-cradle material. Unlike plastics, glass does not degrade in the remanufacturing process, enabling a continuous cycle of use and reuse.  Owens-Illinois, Inc. (OI—NYSE) is the largest global player in glass containers, with the technology to use 90% recycled glass in its manufacturing.  OI is also the largest user of recycled glass containers in the US, recycling approximately one million tons per year.  Although virgin glass forming is an energy-intensive process, with energy costs contributing 15-20% of total container cost, recycled inputs lower the cost substantially.  Further, the company has developed a process to reduce the amount of glass in a typical bottle by 10-20%, resulting in increased strength and lower material and transportation costs.

On the consumer safety front, glass containers are considered the safest packaging material; they do not leach toxins into food and liquids as do plastics that contain toxins such as bisphenol A.  OI’s business has fundamental strengths given the sustainability profile of its products, and although the company’s environmental, social, and governance (ESG) strategy is nascent, it is well positioned to become an ESG leader if it engages in sustainability reporting and target setting.

OI is also poised to benefit from a cyclical upturn in glass demand as the broader economy recovers.  Glass demand bottomed in the first half of 2008, as global volumes fell 12-15%, but is showing signs of improvement. In the second quarter of 2009, OI’s volumes increased 14% on a sequential basis, boosting operating profit.  OI is also actively working to improve margins through price increases and cost reductions.  The company’s current operating margin is now greater than its peers and the strongest it has been in the last 15 years.

by Natasha Lamb, MBA

Lighting consumes 22 percent of the electricity generated in the US and CREE, Inc. (NYSE—CREE), the leader in LED technology, is tackling this inefficiency head on. In fact, the Department of Energy estimates that LED adoption could lead to power savings equivalent to 27 one-gigawatt coal-fired power plants.

LEDs are a game changer and the only real innovation in lighting in over 100 years. Their environmental and cost saving profile includes inherent advantages over incandescent and compact fluorescent bulbs, including enhanced efficiency, lifespan, and more ecologically sound materials.  LEDs are 90 percent more efficient than incandescents, last 20 times longer, and do not contain mercury, a hazard present using and recycling CFLs. The short 1-2 year payback justifies higher their upfront cost.

With only 1 percent penetration in the $40 billion worldwide lighting industry, demand for LED technology is growing and Cree’s high quality LEDs are steadily gaining share.  In 2008, demand for LED lighting applications grew 39 percent, fueled by government support, the replacement market, and legislation banning incandescent bulbs.  The US Energy Independence and Security Act of 2007 has phased out incandescent bulbs in Federal buildings, while Australia has restricted imports of inefficient bulbs.  The Chinese government intends to install 4M LED streetlights in the next two years, for which Cree is a supplier.

LED backlight applications are also driving Cree’s growth.  LED notebooks and TVs are more energy efficient, thinner, and boast better performance.  LED TV penetration is expected to increase from three to 39 percent in the next five years.

Cree is expected to grow earnings 19 percent on a long-term annual basis, while earnings are forecasted to increase 80 percent in 2009 thanks to production efficiencies.  Cree’s strong cash position, at $4/share, and lack of debt will boost growth further as the company makes strategic acquisitions.

Sigma Designs, Inc. (NASDAQ-SIGM) is a fabless provider of integrated system-on-chip solutions used to “power the digital media generation.” The stock is a play on the shift toward higher quality, consumer-centric, digital video technology. Several trends favors Sigma’s products including the shift from analog to digital TV, increasing demand for HDTV and Internet enabled television content, video conferencing, and centralized home energy management systems.

Sigma is a first mover and market share leader in the IPTV (Internet Protocol TV) market with 75 percent share. Telephone carriers such as Verizon and AT&T are adopting IPTV to compete with cable companies who have infringed on their fixed line phone business. IPTV delivers high quality video to customers’ homes via telephone lines or the Internet and is popular in European and Asian countries with low levels of cable TV. IPTV revenues are projected to scale from $780 million in 2006 to $26 billion in 2011, as it displaces cable and satellite TV. IPTV contributes 67 percent of Sigma’s revenue, while 26 percent is derived from sales of chips for Blu-ray DVD players, the market winner after the HD format war. Given the growth profiles of Sigma’s target markets, earnings are projected to increase 15 percent over the next three to five years.

Sigma’s recent acquisition of Zensys Holding Corp. gives the company access to the emerging smart device and energy management markets. Its Z-Wave product creates a wireless network of electronic devices in the home, allowing for Internet based access. These digital systems are used to monitor, control, and manage electricity use and are an important progression toward user-controlled energy efficiency. Sigma’s video conferencing chips also have an environmental benefit. Sigma sells chips to companies such as Cisco, who is revolutionizing the way corporations work through videoconferencing technologies that greatly reduce the need for travel.

Efficient power transmission is essential as we move toward a more sustainable energy economy. ABB Ltd (NYSE-ABB) is the global leader in electricity transmission, focused on greener, smarter, more cost-efficient power infrastructure. The potential for efficiency gains between power production and consumption is believed to be 80 percent, and ABB invests heavily in R&D to create next generation energy technologies. Innovative products and strong project execution position the company to benefit from several long term trends: renewable energy transmission, an aging infrastructure replacement cycle, and international growth. Revenues are expected to increase 10 to 12.5 percent annually over the next 5 years.

Large-scale renewable energy transmission is constrained by geographic and technological barriers. In the U.S., our most abundant renewable power resources are located in the center of the country and require a highly efficient transmission infrastructure to direct energy to population centers on the coasts. ABB will be a critical player in meeting this challenge, while also acting as the largest supplier of products and services to wind turbine manufacturers. Currently, ABB is linking an offshore wind farm to the German power grid using high-voltage direct current transmission technology.

Infrastructure stimulus spending and a much needed replacement cycle will benefit ABB in the short term. Seventy-five percent of transmission lines in the U.S. are 25 years old or older, and the National Electric Reliability Council and new energy efficiency requirements from the Department of Energy are driving systems replacement. In addition, China is planning heavy infrastructure spending to shore up its own economy. Infrastructure buildout in emerging markets accounts for over half of ABB’s revenues.

ABB’s growth will also be bolstered by its financial flexibility. The company has the strongest balance sheet in the industry due to a successful organic growth strategy focused on improving operational efficiency, disposing of non-core assets, paying off debt, and avoiding large mergers and acquisitions. With $4.6 billion in net cash and very low debt, the company is poised to benefit from low acquisition target valuations and industry consolidation.

http://www.royalbank.com/

by Natasha Lamb, MBA

With all of the turmoil in the financial sector over the past year, one major bank has managed to avoid any bombshells to date – Royal Bank of Canada (NYSE – RBC). It happens to be one of the world’s best managed banks with respect to sustainability issues, and its stock has held up remarkably well. It is down about half as much as the S&P 500 financial sector over the past year (-27 percent versus -56 percent).

Royal Bank of Canada is a diversified financial services company. It is Canada’s largest bank by assets and market capitalization and the largest mutual fund provider. Canada accounts for about 66 percent of revenues, the US 22 percent, and international 12 percent. RBC’s strategy includes expansion in the U.S. market and building critical mass in key businesses. RBC is also focused on growing its new Wealth Management segment. It is well positioned to take advantage of a fragmented global wealth management industry.

Royal Bank of Canada is the North American sector leader in sustainability according to Innovest. The company was ranked first in Newsweek’s “Global 100 Greenest Companies.” Environmental and social factors are integrated throughout the company’s business lines, allowing the company to mitigate risk and identify strategic profit opportunities. The company has had an environmental policy in place for more than 15 years, has a Climate Risk Program to monitor risks in its portfolio, is a signatory to the Equator Principles, and uses an intranet tool, Climate Change Central, to allow employees to examine the environmental impacts of their actions.

The company has invested in more than two dozen wind projects, and invests directly in the Global Environment Fund Clean Tech Fund, a private equity fund that finances technologies to reduce the environmental impact of traditional industrial companies.

Portfolio Profiles are not recommendations for any investment action. They are intended expressly to provide social, environmental and business information on companies that may appear in Trillium Asset Management Corporation client portfolios. Clients and/or employees of Trillium may own this stock.

http://www.bd.com/

by Alison Haight, Simmon MBA candidate 

Founded in 1897, Becton Dickinson (NYSE – BDX) pioneered the hypodermic needle. Today, BDX is a medical device company best known as a producer of needle-free safety products, safe-needle devices, and other surgical tools. BDX also manufactures a wide variety of laboratory research tools and clinical diagnostic tools. The company has four strategic areas of interest: reduction in the spread of infection, advancement of global health, improvement of therapeutic capacity, and progress toward disease management, particularly infectious diseases, cancer, and diabetes. With 28,000 employees working in 212 locations in nearly 50 countries, BDX is a truly global company. In fiscal year 2007, geographic sales were split almost evenly between domestic (48 percent) and international (52 percent) markets. Customers include hospitals, healthcare institutions, life sciences laboratories, clinical labs, biotech companies, and individual users.

Largely attributed to the company’s strong management team, BDX is a historically stable company with consistent earnings growth and dividend yields. BDX’s strong balance sheet and diverse product mix place the company in a good position during the economic downturn, as medical devices and supplies are often resilient during times of economic uncertainty.

BDX has an annual Citizenship Report and participates in the Carbon Disclosure Project. The research firm Innovest, a division of RiskMetrics, describes BDX as having “one of the most proactive environment programs in the sector.” Performance is measured by internal audits at 45 facilities worldwide. The company rewards managers and executives for achieving certain environmental objectives.

In November 2007, BDX and the Foundation for Innovative New Diagnostics (FIND) negotiated a price agreement with 39 low income countries, which lowered the price of tuberculosis diagnostic tests by approximately 50 percent. This partnership is especially important because of the emergence of extensively drug-resistant tuberculosis and because tuberculosis is the most common cause of death in AIDS patients in sub-Saharan Africa.

Portfolio Profiles are not recommendations for any investment action. They are intended expressly to provide social, environmental and business information on companies that may appear in Trillium Asset Management Corporation client portfolios. Clients and/or employees of Trillium may own this stock.

American Superconductor (Nasdaq:  AMSC) is emerging as a leading player in the wind energy hardware market, particularly in China. The company’s core technologies are programmable power systems, including electronic converters, and high temperature superconductor (HTS) wires.

AMSC has quickly grown into a leading wind energy grid connection company, particularly in emerging markets. Its two main wind energy products are an inverter and soft-switch capacitor that maintains fluid voltage, and a scalable converter of wind energy into electricity accessible to the public electrical grid. In 2007 AMSC acquired Windtec and Power Quality Systems to enable further growth in the wind and power grid markets.

In fiscal 2007, 87 percent of the company’s revenue derived from wind-related products. China’s wind power capacity increased 130 percent in 2007. China’s long-term wind capacity is estimated to be 160 gigawatts, which is enormous compared to the current production rate of 4 gigawatts. While competition amongst wind turbine companies operating in China is fierce, there is a glaring absence of grid connection firms to link turbines with power grids. As such connections are AMSC’s strength, the company is tapping into this rapidly expanding market. Sinovel, a Beijing-based company, signed a $90 million contract with AMSC in March 2007 and a $450 million contract with AMSC in June 2008.

AMSC is also the world’s largest supplier of HTS wire, although this industry is still in a pre-commercial stage. HTS superconductors are used as power cables and grid surge protectors, both of which will be important in any upgrade of the U.S. power grid. Superconducting wire has much higher capacity than conventional wire and has much lower power losses in transmission, making it ideal for the much-touted “smart grid” that may be a big beneficiary of federal stimulus spending in the coming years.

American
Superconductor

64 Jackson Road
Devens, MA 01434
978 842-3000
http://www.amsc.com

Waters Corporation (NYSE: WAT) designs, manufactures, sells, and services analytical instruments involved in high-performance liquid chromatography (HPLC) and ultra-performance liquid chromatography (UPLC), mass spectrometry, thermal analysis, rheometry, and calorimetry. Got that? Waters’ clients include pharmaceutical, life science, biochemical, and industrial companies as well as academic institutions and government agencies. Instruments produced by Waters are used in processes such as identification of new pharmaceutical drugs, food safety analysis, and environmental and water testing.

Waters is the world’s largest manufacturer of HPLC instruments, chromatography columns, and related consumables and is one of top three players in mass spectrometry. Waters holds the largest analytical instrument market share in the U.S., Europe, and non-Japan Asia and has a strong position in Japan.

Two-thirds of Waters’ sales are overseas. A tremendous growth opportunity for Waters lies in quality evaluation and regulated export applications, for example soft drink testing in China, Thailand, Vietnam, and Korea. With much-publicized food safety issues arising in Asia, Waters is well positioned to address this urgent need. A potentially significant growth factor for Waters is the food and drug safety bill under discussion in the U.S. Congress. This legislation, likely to be passed in 2009, would increase manufacturing and testing standards for all food and drugs imported into the U.S.

Waters’ products are designed to improve both environmental and human safety, as they are primarily used to detect toxins in food and water, or to develop new drugs. Waters has a publicly disclosed environmental health and safety policy, although the company could significantly improve their sustainability reporting and transparency

Waters
Corporation

34 Maple Street
Milford, MA 01757
508 478-2000
http://www.waters.com

PLD’s global network of distribution centers allows the company to quickly respond to tenant needs resulting in a customer retention rate of 79 percent. The company’s international exposure insulates it from large swings in the domestic market and customers regularly request ProLogis enter new countries to meet their logistics needs.

Through its acquisition of Catellus (2005), PLD has gained an expertise in developing mixed-use projects on land requiring ecological cleanup. ProLogis develops urban infill, brownfield sites, old military bases, and industrial sites. It focuses on sustainable design features, open space, access to transportation, and LEED certification.

In December of 2007, PLD was named the UK’s “Best Overall Green Business of the Year,” actively reducing the impact of its business operations on the environment. PLD was also the first real estate company to join the Chicago Climate Exchange in 2007 and is a member of the US Green Building Council. PLD was honored as the “#1 Most Admired Real Estate Company” by Fortune in 2007. In early 2008, ProLogis was accepted as a partner in the U.S. Environmental Protection Agency’s Energy Star program. PLD has pledged its corporate operations will be carbon neutral for 2006 through 2010.

Adobe has perhaps one of the best growth prospects of the major large-cap software stocks over the foreseeable future, with estimated 3 to 5 year earnings growth of over 16 percent. The company is extremely well positioned to benefit from the growth of digital publishing and increased use of the Internet.

Adobe’s primary offices and headquarters illustrate an internal commitment to social and environmental policy. The company became the first in the world to have three LEED-Platinum certified buildings (the highest rating from the U.S. Green Building Council) by retrofitting its office buildings that opened in 1998 and 2003. This is particularly notable since most high-profile green buildings are new construction. Adobe’s Silicon Valley headquarters recycle 90 percent of all waste.

Adobe’s core business has minimal emissions and waste impact and the management has solid social policies in place. However, the company has yet to articulate a sustainability strategy or policy to address supply chain concerns.

Applied Materials has made a long-term strategic decision to become a force in solar power equipment, and has used acquisitions to penetrate the business. Most recently, Applied paid approximately $475 million to purchase HCT Shaping, a privately held Swiss manufacturer of wire saws used to slice silicon wafers. Applied’s efforts were rewarded in March when it won a multi-year $1.9 billion contract to supply equipment for multiple solar panel factories overseas.

Applied has a strong environmental management system and comprehensive reporting. It has detailed disclosure of greenhouse gas emissions, having reduced emissions 50 percent normalized to revenues from 2002 to 2004. AMAT is developing an Environmental Value Systems Analysis with the University of California, Berkeley to assess the environmental costs of owning and operating semiconductor fabrication tools with the goal of establishing market value for cost-saving eco-efficient product design and operation. Between 2002 and 2004, it cut hazardous waste by 43 percent and increased recycling of non-hazardous waste by 25 percent. A variety of products are used to significantly reduce greenhouse gases for clients including Remote Clean, a Plasma Exhaust Gas Abatement System, and a vacuum pump that reduces energy usage by 75 percent.

Applied Materials

3050 Bowers Avenue
PO Box 58039
Santa Clara, CA 95052-8039
Phone: 408-727-5555
www.appliedmaterials.com

Chipotle is a well-executed concept and great growth-stock story. The company has consistently beaten consensus earnings estimates since going public and over the last five years revenues have grown between 30 and 55 percent. Strong growth across all of Chipotle’s markets is driven by expansion and increasing same store sales in what is considered a very challenging economic backdrop for restaurants.

Chipotle is a sustainability leader in the restaurant industry. The company serves more naturally raised meat per year than any other restaurant in the United States. All of Chipotle’s restaurants serve naturally raised pork, 85 percent serve naturally raised chicken, and over 50 percent serve naturally raised beef. No meat is purchased from factory farms and farms are visited to ensure high quality. Today 25 percent of beans are organic and the company is increasing that percentage as greater supply becomes available. The company donates money to the Land Institute, which conducts sustainable agriculture research. The sour cream and cheese contain no synthetic growth hormone.

Chipotle also uses many elements of sustainable architecture in its restaurants including recycled content in 60 to 90 percent of their interiors, low VOC paints, tank-less water heaters, low-E windows and energy efficient lighting. Chipotle is currently testing a recycling system in 25 stores, which will be rolled out to all stores once the design is satisfactory.

Chipotle Mexican Grill, Inc.

1543 Wazee Street

Suite 200

Denver, CO 80202-1442

United States – Phone: 303-595-4000

www.chipotle.com

Hologic holds a leading market position in breast cancer and osteoporosis detection in the US and stands to benefit from the acquisition of Cytyc, which has 70 percent share of the cervical cancer testing market. This deal will grant Hologic leadership in the women’s health care segment and add revenue stability and predictability.

Sales of the company’s Selenia digital mammography system units grew 154 percent last year, reflecting an industry trend of conversion from analog to digital systems. Over the past year, industry-wide digital mammography unit sales have grown 91 percent, yet only 21 percent of analog systems have been converted. To further capitalize on this shift, Hologic’s pipeline tomosynthesis product will provide 3-D mammography capabilities and represents a significant opportunity for long-run market expansion.

Hologic’s revenue growth will be enhanced further by cross-selling initiatives through Cytyc’s sales channels, which will greatly expand the company’s international presence. Margin expansion is also expected as Hologic’s 43 percent gross margins are boosted by Cytyc’s 78 percent margins. The consensus long-term earnings growth rate projection is 35 percent.

Breast cancer is the second leading cause of cancer-related death in women in the US. Death rates have declined since 1990 due to earlier detection and treatment. Hologic’s digital mammography products provide more accurate detection for some women.

www.hologic.com

In a $70 billion global dialysis market, FMS has a leading 30 percent market share in the product market and a 10 percent share in the dialysis service business. In 2006, the company experienced record revenues (26 percent growth) and operating earnings (40 percent growth).

There is a favorable regulatory outlook for the dialysis industry. A possible introduction of bundled reimbursement rates for US dialysis treatments is being explored by the Centers for Medicare and Medicaid services. This policy would result in lower doses of erythropoisis-stimulating agents (ESAs) and higher quality care. Currently, dialysis providers are paid separately for services and drug delivery. Providers are reimbursed based on the amount of high margin ESA administered, which can result in overuse. A bundled rate would incentivize providers to use the lowest dose possible. Additionally, positive reimbursement changes have recently been made in seven European countries.

FMS’ products serve a growing population of people with chronic renal failure. Two million people worldwide suffer from this condition and that number is increasing 5-7 percent per year due to greater life expectancy and the prevalence of diabetes and high blood pressure. The company’s new generation of dialysis machines have eco-efficient features that reduce the water and electricity required for operation by 30 percent. FMS has an eco-ranking system that measures the resource cost per dialysis treatment so as to improve performance.

www.fmc-ag.com

Philips is using the cash from the divestment of non-core businesses on (1) a large share repurchase program, (2) raising its dividend 30 percent+ at the end of 2006 and (3) acquisitions that strengthen its four core divisions. Acquisitions over the past two years include three companies on Trillium Asset Management Corporation’s approved list – Color Kinetics (LED lighting), Intermagnetics General (MRI magnet systems and superconducting technology), and Lifeline Systems (elderly alert systems) – all good little companies we are sorry to see gobbled up. But the fact that Philips bought them indicates the company’s focus on emerging growth businesses.

Philips has a strong sustainability profile. The company is the world’s largest lighting manufacturer and promoting energy efficient lighting is among its top priorities. This spring the CEO of Philips’ lighting division supported the Dutch government’s effort to phase out incandescent light bulbs. Philips is a leading producer of compact fluorescent bulbs and with its acquisition of Color Kinetics is now the leader in even more efficient LED lighting systems. According to KLD, Philips emphasizes energy efficiency as a fundamental consideration for non-lighting products as well as internal operations. In 1994, the company launched its EcoDesign program to minimize product weight, reduce packaging, increase recyclability and lifespan, and optimize energy efficiency. Products that meet these criteria are part of the Green Flagship line, which accounted 6.6 percent of 2005 revenues. Product examples include cadmium/lead and mercury-free phones, flat screen TVs that use 39 percent less energy and residential solar systems.

www.philips.com/global

PBD includes companies focused on the generation and use of cleaner energy, conservation, and efficiency. WilderHill divides the sector into the following categories: demand side energy savings (8 percent of sales), generation efficiency and smart distribution (6 percent), hydrogen and fuel cells (4 percent), power storage (2 percent), solar (23 percent), wind (27 percent), biofuels, biomass and waste-to-energy (12 percent), renewables-other (11 percent), and services and suppliers (7 percent).

Keep in mind that the clean energy space remains volatile, responding to overall energy prices, public policy, and the movement of global equity markets. So PBD is likely to see its share of sharp ups and downs.

www.powershares.com

Color Kinetics designs, markets and licenses intelligent solid-state lighting systems. Its systems use semiconductor devices known as light emitting diodes (LEDs) as the light source. LED lamps produce light without any filament, gas or moving parts. And they have much longer lives (about 25,000 plus hours versus 1,000 for incandescent bulbs and 20,000 for fluorescent tubes).

The commercial market for white light LEDs is just emerging, as the efficiency of LEDs has grown dramatically in recentyears and prices have declined. The potential market is enormous, estimated at $102 billion worldwide. Prices for white light LEDs remain prohibitive for the mass market at present, but technological advances should increase the cost efficiency of white LEDs in the next couple of years. Still, due to the higher cost of LEDs, the “cost of light” over the lifetime of a lamp (measured in dollars per million lumen hours) on which big purchasers make decisions remains higher than fluorescents, but is converging quickly.

According to a 2004 U.S. Department of Energy report, if solid-state lighting achieves projected price and performance targets: 3.5 quadrillion BTUs of primary energy could be saved by 2025; solid-state lighting could decrease national energy consumption for lighting by 29 percent; and more than forty 1000 megawatt power plants could be deferred, contributing to a cleaner environment and a more reliable electrical transmission and distribution system.