Carbon Clean 200™:

Investing in a Clean Energy Future

2017 Q3 Performance Update

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FOREWORD

** As You Sow and Corporate Knights are not investment advisors, nor do we provide financial planning, legal or tax advice. Nothing in the Carbon Clean 200 Report shall constitute or be construed as an offering of financial instruments, or as investment advice or investment recommendations.**

We are happy to present the 2017 Q3 Carbon Clean 200TM list of publicly traded companies that are leading the way with solutions for the transition to a clean energy future.

Since our first report was launched last summer, a great deal has changed in the world. The CEO of Shell announced he is going electric for his next car, and oil stocks flat-lined as global markets climbed to record levels. While some feared the change in the political climate in the U.S. would bode badly for clean energy at the expense of fossil fuels, the opposite has happened. After some initial market uncertainty following last year’s Presidential election, the Clean 200 stocks have dramatically outpaced the returns of fossil fuel stocks.

But the real takeaway continues to be that the clean energy story is global and it is no longer niche. Over 30 countries are represented by the Clean200, which have an average market capitalization of $8.3 billion and generate over $353 billion in clean energy revenues per year. While the stock market continues to break records in the short term, the long term clean energy economic expansion continues afoot, regardless of what happens in the White House.

Beyond America, global growth is now being driven by emerging economies, which account for 80% of economic growth. This was one of the points made by the Chinese President’s Xi Jinping in his keynote address/coming out party as emerging superpower this at the World Economic Forum in Davos earlier this year. While not widely picked up in press reports, President Xi also made a point emphasising “Our efforts to pursue green development are paying off.” Indeed they are. Among the 2017 Clean200 companies, Greater China takes the crown, with 71 companies versus 41 from the US, despite the US stock market being more than twice the size of Greater China’s.

Being on the vanguard of the clean energy transition is at once an economic, political (cleaner air), and geopolitical imperative as it relates to China’s role as a leading nation in the 21st century, a point made in a report by the Institute for Energy Economics and Financial Analysis, which found China’s dominance in renewables is rapidly spreading overseas, with the country accelerating its foreign investment in renewable energy and supporting technologies.

 

The Carbon Clean 200: THE BIGGEST 200 PUBLIC COMPANIES RANKED BY CLEAN ENERGY REVENUES

 

 

Over the past six years, and growing dramatically leading up to and post-Paris COP 21 and Marrakesh COP 22, a movement of institutional and individual investors representing more than $5tn in assets under management have divested a portion of their fossil fuel investments and committed to divesting the balance in the next five years. The corollary of divesting fossil fuels is re-investing in the clean energy future. As an invitation to a larger discussion of how we can invest in a clean energy future, we created the Clean 200 (Clean200)—a list of the 200 largest companies worldwide ranked by their total clean energy revenues, including revenue associated with energy efficiency themes.

The moral case for divesting from fossil fuels has been well argued, but for many, the economic case is less clear. However, as clean energy growth rates take off and demand growth for fossil fuels flatlines, it is probable that divesting from fossil fuels in favor of a clean energy future does not have to come at a sacrifice to long-term investment returns. In its first full year of live performance, Clean200 companies generated a return of 16.5% versus a decline of 1.2% for its fossil fuel benchmark the S&P 1200 Global Energy Index.

On the risk side, divesting is about not getting stuck holding stranded fossil fuel assets that cannot be burnt if the world is to adhere to a given carbon budget, a topic on which Mark Carney, governor of the Bank of England, has expressed concerns in a landmark speech to global insurer Lloyd’s of London.3 On the opportunity side, investing in the transition from a high-carbon to a low-carbon economy represents “the largest economic opportunity of the 21st century,” according to John Doerr4 a major venture capitalist at Kleiner-Perkins in Silicon Valley. It might seem counterintuitive for an investor to sell their fossil fuel stocks when most people are still driving internal combustion cars and burning fossil fuels every day. However, the point and the power dynamic of investing is that, as an investor, you have the power to bet and capitalize on the creation of the world that you want to see. If you are wrong, you will lose money. If you are right, you will profit from and add momentum to the change you believe in. While many mission-driven investors believe that the arc of history bends towards justice—that companies which create positive rather than negative externalities will prevail —in the case of climate-friendly investing, it may actually be true. Many investors have found this out the hard way. Indeed, in a world of limited capital, every investment holds opportunity cost. When people vote with their investment dollars in favor of clean energy over dirty, it sends a message as powerful as any ballot box that the time has come to stop using the atmosphere as a free dumping ground.

Take coal, which accounts for over 40% of global greenhouse gas emissions.5 The industry is declining rapidly in value, especially in the United States. In the words of Jim Barry, the global head of BlackRock‘s infrastructure investment group: “Coal is dead,…The thing that has changed the whole picture fundamentally is that renewables have gotten so cheap.” Oil companies are facing similar problems, as the automotive industry begins to accelerate into the electric-age reducing our reliance on oil. The cost of owning an electric car will fall to the same level as petrol-powered vehicles next year, according to bold new analysis from UBS which will send shockwaves through the automobile industry.

Major investment indices are now only half as exposed to the fossil fuel sector (1.5% to coal, 7% to oil and gas) as they were five years ago. This is not due to any active decision to divest, but rather because fossil fuel stocks have lagged while other sectors have produced healthy returns.

 In its first full year of performance through June 30 2017, the Clean 200 generated a return of 16.5% versus a decline of 1.2% for its fossil fuel benchmark the S&P 1200 Global Energy Index, and a slight 0.3% gain for the S&P Global Clean Energy Benchmark. The ten companies that contributed the most to the Clean200’s first year outperformance are all involved in the provision of products, materials and services related to energy efficiency.

In its first full year of performance through June 30 2017, the Clean 200 generated a return of 16.5% versus a decline of 1.2% for its fossil fuel benchmark the S&P 1200 Global Energy Index, and a slight 0.3% gain for the S&P Global Clean Energy Benchmark. The ten companies that contributed the most to the Clean200’s first year outperformance are all involved in the provision of products, materials and services related to energy efficiency.

While fossil fuel stock performance stagnates, clean energy is taking off. The world is currently adding twice as much clean power capacity as coal, oil, and gas combined, according to Bloomberg New Energy Finance (BNEF).9 Wind’s market share of power generation has doubled four times in the past 15 years, and solar has doubled seven times. It’s also getting cheaper to make power from wind and solar, thanks to technology, better financing and economies of scale. Increased demand for a technology generally reduces prices, whereas increased demand for a commodity increases prices. This basic calculus has driven the price of a renewable kilowatt of energy ever downward, making the choice of energy an economic one. Companies which make a significant amount of their revenue from environmental solutions now make up 5% of global investment indices; the Clean200 list of companies have a collective value over $1 trillion.

In the next 10 years, McKinsey10 expects oil demand growth to flatten due to growing fuel efficiencies and competitive technologies such as the electric car. Battery prices fell 35% last year, and electric car sales rose by 60%. By 2022, BNEF estimates electric vehicles will cost the same as their internal combustion counterparts, and if growth continues at the current pace, oil displacement by electric cars will reach 2 million barrels per day by 2023 — the size of the current oil glut and enough to drive global oil prices to record lows. Factoring in autonomous cars and ride-sharing services, electric cars could reach 50% of new car sales by 2040, according to BNEF, 50 times higher than what OPEC is projecting.11, 7

None of this portends an imminent conclusion to our fossil fuel age, but it does suggest an end to fossil fuels as a long-term growth market and the beginning of a long run expansion of clean energy demand. This sentiment has been ratified, sanctified, and tallied by the political, moral, and financial bellwethers of our time, from the Paris climate talks (195 countries committed to phase out fossil fuels this century) to the Vatican (Pope Francis has made moral invocations to drastically reduce use of fossil fuels in the encyclical Laudato Si’12) to the Bank of England (the bank’s governor Mark Carney has warned not to get stuck holding a bag of stranded fossil fuel assets).

 
 The Clean 200 US companies outperformed the Clean 200 ex-US companies in first year of live performance, 23.4% to 15.3%.

The Clean 200 US companies outperformed the Clean 200 ex-US companies in first year of live performance, 23.4% to 15.3%.

Some big investors are already adapting:

GICS Sector # of Clean200 companies
Industrials 93
Information Technology 45
Utilities 22
Consumer Discretionary 16
Materials 16
Consumer Staples 3
Financials 2
Energy 1
Healthcare 1
Telecommunication Services 1
  • PFZW, the $183 billion Dutch pension fund, has pledged to halve its carbon footprint by 2020 while increasing its investments in climate solutions fourfold.
  • CalSTRS committed $2.5 billion to a Low-Carbon Index as part of a multi-faceted approach to align its portfolio with the market realities emerging from climate change.
  • Irish lawmakers voted to require the U.S. $9bn Irish Strategic Investment Fund to divest from all direct or indirectly held fossil fuel assets.
  • AXA divested from all coal holdings (mining companies and electric utilities deriving over 50% of their
    turnover from coal) and committed to triple its green investments by 2020.

Corporate Knights and As You Sow are committed to updating this list on annual basis with quarterly performance updates and ensuring that it remains in the Creative Commons13 as a public good. We invite anyone to make it better and share any new ideas to improve the methodology for the next quarter. It can be downloaded at www.clean200.org.

 

Clean200 Companies by Country

Country # of Clean200 companies
GREATER CHINA 68
UNITED STATES 34
JAPAN 20
GERMANY 9
INDIA 7
SOUTH KOREA 7
CANADA 5
SWEDEN 5
DENMARK 4
IRELAND 4
UNITED KINGDOM 4
BRAZIL 3
NETHERLANDS 3
SPAIN 3
SWITZERLAND 3
AUSTRALIA 2
FINLAND 2
GREECE 2
NEW ZEALAND 2
THAILAND 2
FRANCE 2
AUSTRIA 1
BELGIUM 1
CHILE 1
ITALY 1
KUWAIT 1
LUXEMBOURG 1
MEXICO 1
PHILIPPINES 1
TURKEY 1
 

The Clean200 Methodology

The Clean200: The biggest 200 public companies ranked by green energy revenues, was first calculated on July 1, 2016 and publicly released on August 15, 2016 by Corporate Knights and As You Sow and now updated with data through the end of 2016.

The Clean200 are listed by their estimated green revenues in USD. The dataset is developed by multiplying a company’s most recent year-end revenues by its BNEF New Energy Exposure Rating mid-point. In cases where companies disclosed their clean energy revenues, this number was verified to ensure consistency and, in some cases, used to override the BNEF data. In order to be eligible, a company must have a market capitalization greater than $1 billion (end of Q3 2017) and earn more than 10% of total revenues from New Energy14 sources.

The Clean200 uses negative screens. It excludes all oil and gas companies and utilities that generate less than 50% of their power from green sources, as well as the top 100 coal companies measured by reserves, top 100 weapons producers, as well as laggards on tropical deforestation15, and child or forced labor and companies who engage in negative climate lobbying.

 
Clean200 Negative Screens Criteria Number of Companies Excluded
Oil and Gas SASB SICS Subsector = oil & gas 4
Coal 100 Top 100 companies by coal reserves 2
Non-Green Utilities Any utility that derives less than 50% revenue from green sources 49
Top 100 Weapons The SIPRI Top 100 arms-producing and military services companies in the world 4
Tropical Forest Harm Scores less than 4 on Forest 500 scale or are on the As you Sow/Friends of the Earth Deforestation Free Funds Tool 6
Child/Forced Labor Scores in bottom half of Know the Chain rating 3
Negative Climate Lobbying Scores E or lower on Influence Map rating 0

The Clean200 List

June 30, 2017

 
Rank Name
1SIEMENS AG-REG
2TOYOTA MOTOR CORP
3SCHNEIDER ELECTRIC SE
4ABB LTD-REG
5PANASONIC CORP
6VESTAS WIND SYSTEMS A/S
7BOMBARDIER INC-B
8INNOGY SE
9JOHNSON CONTROLS INTERNATION
10SSE PLC
11PHILIPS LIGHTING NV
12EMERSON ELECTRIC CO
13TESLA INC
14KONINKLIJKE PHILIPS NV
15UMICORE
16SIEMENS GAMESA RENEWABLE ENE
17EATON CORP PLC
18OSRAM LICHT AG
19SHARP CORP
20DONG ENERGY A/S
21XINJIANG GOLDWIND SCI&TECH-A
22NORDEX SE
23SUNPOWER CORP
24ACUITY BRANDS INC
25BYD CO LTD-H
26KINGSPAN GROUP PLC
27BROOKFIELD RENEWABLE PARTNER
28CHINA LONGYUAN POWER GROUP-H
29GCL-POLY ENERGY HOLDINGS LTD
30ANDRITZ AG
31INGERSOLL-RAND PLC
32FIRST SOLAR INC
33SVENSKA CELLULOSA AB SCA-B
34KYOCERA CORP
35TBEA CO LTD-A
36WACKER CHEMIE AG
37TE CONNECTIVITY LTD
38SPIE SA
39DOOSAN HEAVY INDUSTRIES
40CHINA AGRI-INDUSTRIES HLDGS
41SHIN-ETSU CHEMICAL CO LTD
42APPLIED MATERIALS INC
43NIDEC CORP
44CHINA EVERBRIGHT INTL LTD
45SENVION SA
46ROCKWOOL INTL A/S-B SHS
47SUMITOMO FORESTRY CO LTD
48HYOSUNG CORPORATION
49COVANTA HOLDING CORP
50REPUBLIC SERVICES INC
51SAMSUNG SDI CO LTD
52EBARA CORP
53BORGWARNER INC
54ITRON INC
55SUZLON ENERGY LTD
56NOVOZYMES A/S-B SHARES
57LS CORP
58PRYSMIAN SPA
59HANWHA CHEMICAL CORP
60EDP RENOVAVEIS SA
61QUANTA SERVICES INC
62GCL SYSTEM INTEGRATION TEC-A
63EMCOR GROUP INC
64NIBE INDUSTRIER AB-B SHS
65HELLA KGAA HUECK & CO
66LONGI GREEN ENERGY TECHNOL-A
67INFINEON TECHNOLOGIES AG
68CREE INC
69XIANGTAN ELECTRIC MANUFACT-A
70SUEDZUCKER AG
71DELTA ELECTRONICS INC
72DIC CORP
73MERCURY NZ LTD
74ZHEJIANG CHINT ELECTRICS-A
75AZBIL CORP
76XJ ELECTRIC CO LTD-A
77HUANENG RENEWABLES CORP-H
78HITACHI HIGH-TECHNOLOGIES CO
79CHINA HIGH SPEED TRANSMISSIO
80OWENS CORNING
81CAVERION CORP
82HUADIAN FUXIN ENERGY CORP -H
83OCI CO LTD
84DONGFANG ELECTRIC CORP LTD-A
85BHARAT HEAVY ELECTRICALS
86RISEN ENERGY CO LTD-A
87SMA SOLAR TECHNOLOGY AG
88TIANJIN ZHONGHUAN SEMICOND-A
89ATLANTICA YIELD PLC
90KINDEN CORP
91CNPC CAPITAL CO LTD-A
92TOFAS TURK OTOMOBIL FABRIKA
93SANAN OPTOELECTRONICS CO L-A
94TERRAFORM POWER INC - A
95NEMAK SAB DE CV
96SUNGROW POWER SUPPLY CO LT-A
97SAO MARTINHO SA
98NARI TECHNOLOGY CO LTD-A
99MOBILE TELECOMMUNICATIONS CO
100JIANGSU ZHONGLI GROUP CO L-A
101MLS CO LTD-A
102SEOUL SEMICONDUCTOR CO LTD
103STANLEY ELECTRIC CO LTD
104EPISTAR CORP
105SHANGHAI AEROSPACE AUTOMOB-A
106ANALOG DEVICES INC
107XINYI SOLAR HOLDINGS LTD
108SIG PLC
109HITACHI CAPITAL CORP
110HONGFA TECHNOLOGY CO LTD-A
111GS YUASA CORP
112REGAL BELOIT CORP
113KAIDI ECOLOGICAL-A
114ROHM CO LTD
115NEXTERA ENERGY PARTNERS LP
116NINGBO SANXING ELECTRIC CO-A
117VALMET OYJ
118ENERGY DEVELOPMENT CORP
119JIANGSU ZHONGTIAN TECHNOLO-A
120SACYR SA
121CHINA SHIPBUILDING INDUSTR-A
122ORMAT TECHNOLOGIES INC
123WEG SA
124ZHEJIANG YANKON GROUP CO L-A
125SHENZHEN DESAY BATTERY TEC-A
126SMITH (A.O.) CORP
127TOKUYAMA CORP
128KYOWA EXEO CORP
129TIMKEN CO
130SUZHOU DONGSHAN PRECISION-A
131ARCADIS NV
132HANERGY THIN FILM POWER GROU
133HANGZHOU FIRST APPLIED MAT-A
134JIANGSU AKCOME SCIENCE & T-A
135TELLHOW SCI-TECH CO LTD-A
136TRIMBLE INC
137OC OERLIKON CORP AG-REG
138NEW FLYER INDUSTRIES INC
139GUANGDONG BAOLIHUA NEW-A
140CPFL ENERGIAS RENOVAVEIS
141SHENZHEN KAIFA TECHNOLOGY-A
142BADGER METER INC
143PERKINELMER INC
144TATA CHEMICALS LTD
145CHINA XD ELECTRIC CO LTD-A
146WOODWARD INC
147CHINA BAOAN GROUP-A
148SHENZHEN CLOU ELECTRONICS-A
149HEXCEL CORP
150BEIJING SIFANG AUTOMATION-A
151SOC QUIMICA Y MINERA CHILE-B
152TETRA TECH INC
153JIANGXI SPECIAL ELECTRIC -A
154CSR LTD
155EXIDE INDUSTRIES LTD
156SWECO AB-B SHS
157SUMCO CORP
158SIMPLO TECHNOLOGY CO LTD
159SHENZHEN JIAWEI PHOTOVOLTA-A
160FAR EAST SMARTER ENERGY CO-A
161COFCO BIOCHEMICAL CO LTD -A
162MERIDIAN ENERGY LTD
163JM AB
164XINYI GLASS HOLDINGS LTD
165GUANGDONG EAST POWER CO LT-A
166COMFORT SYSTEMS USA INC
167IDFC LTD
168PATTERN ENERGY GROUP INC
169THERMAX LTD
170TECO ELECTRIC & MACHINERY
171FOSHAN NATIONSTAR OPTOELEC-A
172HENGDIAN GROUP DMEGC -A
173VEECO INSTRUMENTS INC
174TITAN WIND ENERGY SUZHOU-A
175HONGLI ZHIHUI GROUP CO LTD-A
176ARCPLUS GROUP PLC-A
177SICHUAN CHENGFEI INTEGRAT -A
178HEXING ELECTRICAL CO LTD-A
179ZHONGTONG BUS & HOLDING CO-A
180MYTILINEOS HOLDINGS S.A.
181DELTA ELECTRONICS THAI PCL
182CSG HOLDING CO LTD - B
183INNERGEX RENEWABLE ENERGY
184ENERGY ABSOLUTE PCL
185NORTHWESTERN CORP
186ESCO TECHNOLOGIES INC
187DIALOG SEMICONDUCTOR PLC
188BEIJING NEW BUILDING MATER-A
189UNIVERSAL DISPLAY CORP
190WUXI HUAGUANG BOILER CO-A
191BEIJING JINGYUNTONG TECHNO-A
192NISSIN ELECTRIC CO LTD
193TRANSALTA RENEWABLES INC
194APOGEE ENTERPRISES INC
195CLEANAWAY WASTE MANAGEMENT L
196HUNAN CORUN NEW ENERGY CO-A
197FAGERHULT AB
198FOSHAN ELECTRICAL & LIGHT-B
199ZHEJIANG NARADA POWER SOUR-A
200HAVELLS INDIA LTD
 

DISCLAIMER

The aggregated data comprising the Clean200™ represents a snapshot of the top-ranked “clean” companies as measured by total green energy revenue based on a methodology developed by Corporate Knights and As You Sow from data in the Bloomberg New Energy Finance database. The list should not be considered current or complete, or a substitute for financial data provided by a licensed financial advisor. Estimation methodologies are subject to limitations in modelling and measurement.

The information provided in the Clean200 and in this report is provided “AS IS” without warranty of any kind. Corporate Knights and As You Sow each makes no representations and provides no warranties regarding any information or opinions provided herein, including, but not limited to, the advisability of investing in any particular company or investment fund or other vehicle. While we have obtained information believed to be objectively reliable, neither As You Sow nor Corporate Knights, or any of each of their employees, officers, directors, trustees, or agents, shall be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with use of or reliance on any information contained herein, including, but not limited to, lost profits or punitive or consequential damages. Past performance is not indicative of future returns.

As You Sow and Corporate Knights do not provide investment, financial planning, legal, or tax advice. We are neither licensed nor qualified to provide any such advice. The content of our programming, publications and presentations is provided for informational and educational purposes only, and should not be considered as information sufficient upon which to base any decisions on investing, purchases, sales, trades, or any other investment transactions. We do not express an opinion on the future or expected value of any security or other interest and do not explicitly or implicitly recommend or suggest an investment strategy of any kind.

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