The ESG investment opportunity is likely to define the marketplace for the next decade. So say Morgan Stanley, Goldman Sachs, and Bank of America ML’s luminary, Michael Hartnett. Why? Because it is the prerogative of the millennial investor, according to profiles, research, and survey hard data seeking to uncover how this critical demographic will deploy the $68 trillion in inherited capital they are expected to receive over that period.
What precisely does that mean?
The main thing it means is that the days of judging a stock simply in terms of a company’s financial performance, with no other criteria, are over and one with. And, perhaps, good riddance. Where has unabashed capitalism gotten us? Okay, fine, it’s gotten us quite a long way. But it has also incentivized “Big Oil” to ruthlessly colonize regulators and governance to its own ends, despite endless evidence that the greenhouse effect is quite real, and quite certainly driven by human patterns of behavior.
Or, at least, so sayeth the millennials, but an overwhelming majority. And they now represent the judge, jury, and fund management executioner.
That creates an undeniable trend, the implications of which should be extremely clear: capital will flow not only according to its best destination in terms of financial returns, but to its best destination in terms of ecological and social impact.
That’s why one should be particularly interested in the emergence of a company like Eco Innovation Group, Inc. (OTCMKTS:ECOX).
Who-What?
Eco Innovation Group, Inc. (OTCMKTS:ECOX) is an incubation platform for commercializing eco-oriented innovations and inventions. That model is unique – as far as we have seen. But it shouldn’t be entirely surprising. ECOX is a bit like a publicly traded ESG VC, where ideas are evaluated from inventors and innovators according to how they will fare in a context ruled by an even balance between financial and ecological return on investment.
The key here, then, is how well the company is able to perform as a discovery platform for at least “potentially game-changing ideas” that have a realistic value on a commercial level.
So far, we would have to give this company a grade of “A+++” based on the ideas we have thus far. Here is a quick survey from its recent releases:
“Our first initiative resulted in an exclusive global licensing agreement with the Bellagio IP Trust for the ECOX Power Booster™, which is a remarkable innovation that taps electricity and magnetism to increase the useful power derived from a given amount of energy. Customers using this technology may be able to increase the usable energy in their homes by as much as 150% while saving approximately 60% on their electric bills.”
“Another remarkable innovation now in our pipeline is called PoolCooled™, which utilizes proprietary technology to cool your home or building by taking cool water from an existing swimming pool and looping it through the existing air conditioning systems to boost air conditioning efficiency on a per-unit power consumption basis in the home or building. Based on available information, we believe this technology may yield savings of as much as 50% off residential electric bills. And because the energy transfer occurs, the process also warms the swimming pool with no additional power usage or cost. PoolCooled™ is designed for hotels, motels and apartment buildings, or for use with your own back yard swimming pool.”
And the latest: a series of products centers around a remarkable innovation that harnesses pressure produced in many industrial operations and converts it to electricity capable of powering significant further operations, creating a closed loop with dramatic implications for power costs for a range of industries, including oil and gas production, water generation and delivery, natural gas distribution, and other core use cases, and even includes a brilliant innovation allowing power to be effectively stored in a specific industrial material.
“This is another tremendous example of finding a smarter way to reorganize a basic process to simultaneously save money and sharply reduce the ecological impact of everyday industrial processes,” commented Julia Otey-Raudes, CEO of ECOX. “We will provide more details very soon regarding this new technology and our new partner, but we wanted to communicate our excitement as we close in on formal integration of this remarkable technology in our portfolio of products. We aren’t going to save the world with a single holy grail idea. We are going to save it with a thousand meaningful upgrades in efficiency and design. Our new partner and his ingenious innovation will be a part of that narrative, and we will be thrilled to bring it to market.”
There is nothing about any of these ideas that seems like a sacrifice in commercial viability for the mission of ecological impact. In other words, these are not “trade-offs”, which is ideal in this model. The commercial potential is not in conflict with the ecological value.
This is an extremely important point because many companies arising in this context will no doubt be predicated on chasing after that $68 trillion in ESG money at the expense of commercial success. But every one of the ECOX ideas now in the pipeline all seem to carry enormous commercial potential while clearly producing a positive for the environment.
The Model
That said, idea generation is only the input piece of the puzzle. The company also needs to have a plan for execution in the marketplace.
The first step here is nailing down full commercial rights. According to a release communication from ECOX, it has signed LOIs for full, global, exclusive licensing rights for the products it takes into its pipeline.
That starts the process.
Once in the pipeline, the product is pushed through a “Nine-Step Process for Market Success”, which includes idea generation, idea screening, concept development and testing, market strategy development, business analysis, product licensing and/or deal structure with the inventor/innovator, product development, test marketing/promotion, and eventual commercialization.
The company has built up a management team with experience taking products to market, and the result is this factory of go-to-market steps.
Otey-Raudes added, “We believe this technology has widespread commercial applicability and represents a clear value proposition across industrial applications, while reaffirming our mission to promote ecological responsibility and sustainability. Furthermore, we believe that the Company will be able to generate substantial revenue streams through this technology in the near future. We look forward to providing full details as we finalize legal terms.”
It will be interesting to see how it manages the process from here. But, based on its early remarkable success in sourcing products with the potential to meet its twin objectives, there could be real promise here. Naturally, once something is commercialized successfully, the horse will have left the barn. Hence, early-stage value speculators will want to take a look now.
It’s a bit like a biotech with a new drug development thesis in that regard. In those instances, the stock is dirt cheap, until one of its assets passes FDA muster and goes live with providers. At that point, the model is proven, and the equity revalues on the assumption that its other assets will meet the same fate.
ECOX could be in a similar boat. That means right now, before any commercial launches have taken place, may be the only time you see anywhere near current prices.
Naturally, we can’t be sure that will work out. But if we could, it wouldn’t present itself here in the first place.
