Sims Metal Management (SGM)

Background

Sims is the world-wide leader in metals and electronics recycling.  In addition to recycling IT equipment and white goods, they also recycle medical devices, monitoring control instruments, toys, leisure & sports equipment, ozone Depleting Substances, and Lead, Nickel Cadmium – Batteries, Phosphors  - Fluorescent Lamps, and radioactive materials.

Ethical Update

Environmental benefits
Because metals can be used indefinitely, recycling them preserves finite resources.  Recycling metals also saves water, and reduces energy and landfill. 

The carbon emissions of recycling compared to extraction are explained below:

• 1 tonne recycled iron reduces emissions by 2.1 tonnes

• 1 tonne aluminium reduces emissions 7.9 tonnes

• 1 tonne computers reduces emissions 4.0 tonnes

Energy - recycling non ferrous metals

• Aluminium 95%, Copper 85%, Lead 65% and Zinc 60%

E-Waste  -1 tonne electronics yields 10g-100g of gold v’s high grade gold ore yield 50g

• Provides anti corruption training to employees & has an anti-corruption code

Environment initiatives

• Sells carbon credits through landfill gas energy

• Eco-Day partnerships with companies eg Warwickshire County Council collected 3.6 tonnes of electrical and electronic waste (WEEE).  Collected mobile phones, DVD players, televisions etc which were then processed at Sims WEEE recycling plant in Newport, Gwent

• UN Global Reporting Initiative signatory from 2007

• Dow Jones Sustainability Index

• Int’l Carbon Disclosure Project (CDP7) since 2006.  Greenhouse gas target 10-15% of baseline 2005/2006.  More efficient machinery, transport & maintenance.

Social Initiatives

• It is committed to prohibition & elimination of child labour & compulsory labor in the communities it operates in.

Governance Initiatives

• Complies with ASX Governance “best practice” guidelines

• Eg Directors & Committees performance evaluation process

• Eg Remuneration charter, Governance charter

• 90% non exec board members but 0% women

Accolades

• In Global 100 Most Sustainable Corporation’s in the World 2010 & 2009, only recycling & waste treatment company that made the list

• Top electronics recycler in North America 2010

Financial Update

Performance

If you had invested $10,000 into the All Ords in 2001, your investment would now be worth $28,000.  

If you had invested $10,000 into Sims Metal Management (SGM) at the same time, your investment would now be worth $58,000.

Stock Details

Estimated Dividend Yield: 2.30%

Franking: 100%

Last Price (23 June 2011): $16.53

Fair Value:  $20.34

Financial figures are as at 23 June 2011 and are subject to change (Source: Morningstar).

Disclaimer

The contents of this article are intended as general advice only.  No specific person’s circumstances, financial situation or objectives have been taken into consideration.  You should not act on the information provided without seeking personal advice from an appropriately qualified financial planner.   While the source has been verified as reliable, the actual content has not been checked for accuracy.  Consequently Ethical Investment Advisers does not warrant the accuracy of the information nor accept liability for any errors in the data.