There is a common perception in the financial community that companies who focus on being socially responsible are should be commended for their activism but avoided by investors. Carbon Clean 200 wants to dispel that notion. In fact, by its analysis, companies that rank high on its list outperform those that don’t by a factor of three to one.
The Clean 200 is a new list created by Corporate Knights and As You Sow, two organizations that advocate for increased social awareness in corporate boardrooms. Together, they decided to look at “which companies currently are profiting from making the decision to participate in the clean transition and what is the best way to spot them? To answer these questions we decided to rely on the Bloomberg New Energy Finance (BNEF) database. We wanted to make our analysis simple to understand and to look at stable companies rather than startups, so we started wit a pool of global companies that have at least a $1bn market cap and have at least 10% “Clean Energy Revenue” as defined by BNEF.
“We then excluded oil/gas/coal companies, companies that manufacture weapons, utilities with less than 50% renewables, companies that profited from deforestation, and companies that engage in child/forced labor. We then took the top 200 and ranked them by estimated clean revenue — the “Clean200”.
They also created another list, called the Carbon Underground 200. There you will find most of the world’s fossil fuel companies. When the two lists were compared, those on the Clean 200 had a rate of return of 21.82 per cent over the past decade. The rate of return for those on the Carbon Underground was 7.84 per cent.
“The Clean 200 nearly tripled the performance of its fossil fuel reserve-heavy counterpart over the past 10 years, showing that clean energy companies are providing concrete and measurable rewards to investors,” said Toby Heaps, CEO of Corporate Knights and report co-author.
“What’s more, the outstanding performance of this list shows that the notion that investors must sacrifice returns when investing in clean energy is outdated. Many clean energy investments are profitable now, and we anticipate that over the long term their appeal will only go up as technologies improve and more investors move away from underperforming fossil fuel companies.”
Toyota topped the Clean 200 list, followed closely by Siemens. Other well known companies near the top were Schneider Electric (4), Panasonic (5), Vestas Wind (7), Philips Lighting (8), DONG Energy (11), Tesla Motors (17), Gamesa (18), First Solar (19) and Samsung (23). The authors note that Chinese companies are heavily represented with 66 total companies. The US is in second place with 40 companies. The authors acknowledge that the explosive growth of solar power in China — aided in large measure by aggressive government policies — contributed considerably to the impressive returns recorded by the Clean 200 list.
The Clean 200 will be updated annually. “Our intention with the Clean200 is to begin a conversation that defines what companies will be part of the clean energy future,” says Andrew Behar, CEO of As You Sow and the report’s co-author. “The Clean200 turns the ‘carbon bubble’ inside out. The list is far from perfect, but begins to show how it’s possible to accelerate and capitalize on the greatest energy transition since the industrial revolution.”
Let the conversation begin!
Source: The Guardian. Graphic credit: Clean 200
Posts
