Portfolio 21 recognizes the high positive net energy of sugarcane ethanol, partly attributable to companies using waste biomass to produce electricity to operate mills. Cosan is no exception; the company provides nearly all of its own electricity needs and has cogeneration plants at some mills that sell surplus energy back to Brazil’s electricity grid, which provides an additional source of revenue for the company.
In recent years, Cosan has undertaken significant acquisitions diversifying the company and expanding its business from sugar cane-based ethanol to fossil fuels distribution. Diversification is intended to make the company less vulnerable to swings in sugar and ethanol prices. As these acquisitions are integrated into the Cosan’s current operating segments, Portfolio 21 will monitor the company to ensure investments are made to minimize the company’s environmental liabilities. Moreover, we have requested that the company provide additional environmental reporting and develop a climate change strategy that sets reduction targets.
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 1/31/13 and may not reflect current opinions or subsequent events.