India Investors Put Faith in Clean Energy
The need to go green has been called “an inconvenient truth” — a distraction from the regular ways of doing business, and not necessarily a money-maker. Markets around the world, however, are proving that going green is a solid way of making green, too. The Carbon Clean 200 is a bi-annual report released by my colleagues at As You Sow and Corporate Knights that catalogues the top-performing companies that make at least 10% of their annual sales from products and services related to clean energy, and India had a very strong showing with 7 companies listed in the Clean200 Q3 2017 edition.
India’s investors seized on the news, spiking the stock of India’s largest renewable energy solutions provider, Suzlon Global Services Limited, by 2.75% in light of its inclusion in the Clean 200 list (no. 55 globally) and an upgrade to its credit rating.
Suzlon is merely the tip of the iceberg, however. The Clean200 list as a whole showed a 16.9% return over the past year, while the S&P Global 1200 Energy Index, which measures fossil fuel companies, dipped by 4.3% over the same time period. These numbers are hardly “inconvenient.” Investors are India are merely the bellwether of a larger shift in energy investments toward clean energy, as fossil fuel companies struggle with depleting resources, to say nothing of their significant ecological impact.
Energy policy has had little effect on investor confidence, which is more solidly based on assessments of future growth. In America, for example, President Trump has made a lot of noise about the resurgence of the coal industry, but markets are less enthusiastic about any kind of coal comeback (this “Top” 4 list from Investopedia is less than inspiring), favoring sustainable companies.
Sustainability is the key distinction between fossil fuel and green energy companies that investors should be paying attention to on an even greater scale. The potential for financial growth is virtually limitless when renewable energy is a focus, which cannot be said for fossil fuels, whose real innovations occur in extraction methods — which don’t increase supply. Globally, the future of investment is in clean energy.
As You Sow’s and Corporate Knights’ Clean200 list has fairly strict inclusion criteria: not only must companies generate half their electricity from renewable or clean power sources, but the list also excludes companies that are involved in weapons manufacturing, deforestation, the use of child labor, or use lobbyists to speak out against climate change. Even with these restrictions, the companies that make the Clean 200 are seeing a great amount of success in 2017, proving that cutting ethical corners isn’t a necessary path to prosperity.
It’s heartening to see Indian green companies succeeding on such a grand scale, as well as the 29 other countries represented by the Clean 200. In the Q1 2017 edition, China emerged as a dominant leader in clean energy, and as more investors across the globe move their money out of fossil fuels, we should see the returns of Clean 200 companies increasing even more quarter over quarter. Green investors like those in India are leading the charge, and the rest of the world should find success in following them.