Over the past two weeks Alcoa (AA) ranked high for overall impact score, prompting us to take a closer look at the Materials sector and what other companies in the ecosystem may be doing. Digging into the data on our Safeguard platform we identified an increase in conversation around a new carbon-free technology that will provide low carbon aluminum to several key players across various industries.
Aluminum has long been prized by manufacturers for its lightweight and durable makeup. It is also a metal that is infinitely recyclable. However, until recently there has not been a great low carbon solution for the smelting process. Digging into the data on our ESG Safeguard platform this week we found that Canadian company ELYSIS announced that their carbon-free technology will begin to roll out for commercial application with the help of a few key partners.
With investment from Alcoa and Rio Tinto (RIO:GB) along with the government of Canada and Quebec, ELYSIS was able to take their technology from a concept in 2018 to a viable solution ready for implementation. The name of the company is a play on words of their process, electrolysis. The technology is not too different from current smelting technology substituting a proprietary inert anode for the traditional carbon anode used in the process. The company even says this technology emits oxygen while eliminating any greenhouse gas emissions. There are other financial incentives for their technology including reductions in operating costs, and increases in the anode’s lifespan.
As the two major investors in this project, Rio Tinto and Alcoa will be the first to pilot this technology. Rio Tinto’s Alma smelter facility in Quebec is going to be the first commercial application of this technology and Alcoa is set to follow shortly. Both companies put in place agreements ahead of time to supply low carbon aluminum based on this technology to major companies. Rio Tinto has a deal in place with ABinBeV while Alcoa has a deal in place with Audi. These two large companies invested in their future together years ago and are now starting to see results, putting aside competition for resiliency.
Elsewhere in the materials sector, LG Chem Ltd. (051910:KR) will begin to roll out bioplastics in South Korea, receiving ISCC certification for their bioproducts value chain. They are the first Korean company to receive certification and are incorporating bioplastic for nine products in their offerings. Neste (NESTE:FI), a Finnish company, is providing LG Chem with bio-diesel for this process.
As two major value chains that produce emissions, metals manufacturers and plastics manufacturers made a dent this week in reducing their footprints. The development of ELYSIS clean technology in Canada is no surprise as Canada has had a carbon tax in place since 2019.
As we discussed in our article last week, there are many companies across different industries that are in favor of a carbon tax. It provides a clear financial incentive for reducing greenhouse gas emissions and will spur companies into action that do business where carbon taxes exist. It is especially important for the Materials sector as they produce many of the inputs that go into a wide range of goods. Reducing the footprint of this space has the potential to reduce the footprint of other industries down the supply chain.
Request an ESG demo today to find out how you can analyze earnings call transcripts and other financial documents with our text analytics platform. Spot outliers, identify critical insights, and understand key drivers.
Amenity Analytics is the industry leader in providing insights from unstructured text by using Natural Language Processing (NLP) assisted by Artificial Intelligence (AI) and Machine Learning (ML). Amenity’s NLP system is a sector-agnostic, language-dependent tool for quantitative text analysis that is deployed across the financial services industry and beyond.
This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
Copyright ©2021 Amenity Analytics.
We’ve previously explored a rebounding of supply chain sentiment in the consumer staples sector (using our ESG dataset) after a lengthy, pandemic-fueled decline. This week, our Key Drivers dataset reveals a potential turnaround for margin sentiment, which has taken hits across the consumer retail space since Q1 of 2022.
Read About Text AnalyticsGlobal supply chain issues that began in 2021 continued to dominate the news in 2022, but a closer analysis with Amenity’s Supply Chain data reveals some sectors are rebounding when compared to last year, particularly the Consumer Staples sector. We take a closer look at the supply chain theme to explore what companies in this sector and other sectors are experiencing.
Read About Text AnalyticsWhat question are executives most avoiding this year? We performed a Deception analysis with our text analytics platform to pinpoint one topic that drove the most deceptive responses by CEOs and CFOs in 2019 earnings calls.
Read About Text Analytics