Carbon Clean 200™:

Investing in a Clean Energy Future

2019 Q1 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 Clean200 Report shall constitute or be construed as an offering of financial instruments, or as investment advice or investment recommendations. Read our full disclaimer.**

We are pleased to present the 2019 Q1 Carbon Clean 200™ 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 in the summer of 2016 we have released an updated one every six months. In that time a great deal has changed in the world. The march away from the high carbon economy has accelerated in tandem with the march toward a clean economy.

Since Trump’s inauguration, a U.S. coal plant has been shut down every 15 days, with 2018 being the nation’s top coal-plant closing year ever. This is happening for the same reason that China and the entire developing world installed more new renewables than fossil power last year for the first time ever and why 42 percent of global coal fleets are unprofitable: Renewables are now cheaper in many major power markets. And we’re just at the beginning of the innovation S-curve for renewables and storage.

In other portents for the future, according to Accenture, 2018 likely marked the peak production of internal combustion engine vehicles which are imminently set to be made obsolete by cheaper electric and fuel cell vehicles. Meanwhile, at least nine countries including China and India have telegraphed they will be banning fossil fuel burning vehicles and other jurisdictions around the world are beginning to put policies in place to make it so. In addition, as a result of the march of technology, zero-emission vehicles will be cheaper right off-the-lot before accounting for the fuel savings and any subsidies, as soon as 2024 according to Bloomberg.

In terms of oil and gas stocks, they are rapidly fading away. In 1980, oil and gas stocks made up 25 percent of the S&P 500. By 2009, the sector had halved to 12 percent, and since 2009 they have halved again to just over 6 percent. At the current rate of decline, Energy stocks may be less than a rounding error of major benchmarks inside the next decade.

While fossil fuels have been burning out, the current crop of the Clean200™ companies has been experiencing higher growth than the Forbes 2000 list of the world’s largest stocks. Over the past ten years the Clean200 companies’ market value grew at a 13 percent compound annual growth rate versus 11 per cent for the Forbes 2000 over the same time period.

The trendlines are clear. Fossil fuels are disappearing and carbon free business lines have stepped out of the clean energy niche and now touch the entire economy.

In line with these changes in the world, beginning in this version of the Clean200, we have adapted our methodology to reflect the broadening of this cross-sector grouping of companies. These changes mean that we are now applying a new carbon free definition that captures a larger portion of the economy beyond energy efficiency, green energy, and zero emission and hybrid vehicles. We will now include banks that are financing the low-carbon solutions; real estate companies leading the way on low-carbon buildings; forestry companies protecting carbon sinks; responsible miners of critical materials for the low carbon economy; food and apparel companies with products that are primarily made of raw materials with a significantly lower carbon footprint; and energy-hungry Information and Communications Technology (ICT) companies that are leading the way on renewable energy while also being best-in-sector according to currently accepted privacy benchmarks.

The updated criteria has broadened the Clean200 so it is now more diverse from a sector perspective and more representative of the breadth of the low carbon economic transition.   

It has also resulted in what may be a surprise at the top of the Clean200 list: Alphabet, the holding company for Google.

As per the updated methodology, Internet and Data Services companies (a subset of ICT) are considered “green” or “clean” if they fulfill two tests. Number 1: They must derive 100 percent of the energy they consume from renewable sources. Number 2: They must rank in the top quartile among peers on privacy, according to the best available benchmark, Ranking Digital Rights. Alphabet has invested billions of dollars over the past few years to meet its renewable energy target. Also, Google ranks number one among its peers on privacy – we acknowledge that being number one on privacy is far from perfect and are looking for ways to improve this benchmarking.

From a carbon emissions perspective, Google’s decision to go 100 percent renewable as compared to a business-as-usual scenario, removes five million tonnes of carbon emissions from the atmosphere every year. That is no small beans. It is equivalent to taking one million cars off the road or shutting down a quarter of Suncor’s operations, one of the largest oil sands companies in the world.

From a big picture perspective, it matters a lot what kind of energy ICT companies choose because they are projected to account for 20 percent of the entire global electric grid by 2025.

We encourage and challenge all ICT companies, many of which have cash burning a hole in their pockets, to go 100 percent renewable and to up their game on privacy, which will only become more important as data replaces oil.

RETURNS

 
 

Since inception (July 1, 2016), the Clean200 is ahead of its fossil fuel benchmark (S&P Global 1200 Energy), but behind the broad market benchmark (S&P 1200), mostly due to sub-par China performance amidst the simmering trade war with the U.S.

When excluding the Chinese stocks from the Clean200, the Clean200 ex-China moves into pole position ahead of its broad market benchmark.

 
 
Source: Bloomberg, Corporate Knights

Source: Bloomberg, Corporate Knights

 
 

Overall, the model presented in the form of the Clean200 continues to indicate that demand and market forces are driving growth for low carbon companies. Since its inception two and a half years ago, the Clean200 has outperformed by 3.78 percent against the S&P Global 1200 Energy Index. The Clean200 ex-China which returned 20.4 percent since inception beats the S&P Global 1200 Index by 0.73 percent over the same time period. It will be very interesting to see how the trends unfold over the next few months.

 
GICS Sector # of Clean200 Companies

Industrials

78

Information Technology

40

Utilities

20

Consumer Discretionary

20

Materials

18

Consumer Staples

8

Energy

5

Financials

3

Health Care

1

Communication Services

4

Real Estate 3

CLEAN200 Companies by Country

 
Country # of Clean200 companies

China

36

United States of America

34

Japan

19

Germany

11

Finland

10

Korea; Republic (S. Korea)

10

Brazil

9

Canada

9

France

8

Spain

6

Switzerland

5

Netherlands

5

Hong Kong

5

Taiwan

4

Sweden

4

United Kingdom

4

Ireland; Republic of

4

Denmark

3

Belgium

2

Austria

2

Singapore

2

Italy

2

Bermuda

1

Norway

1

Luxembourg

1

India

1

Turkey

1

Mexico

1

 
 

THE CLEAN200™ Methodology

The Clean200 are the largest 200 public companies ranked by green energy revenues. It was first calculated on July 1, 2016 and publicly released on August 15, 2016 by Corporate Knights and As You Sow. The current list has been updated with data through the end of 2018 (December 31, 2018).

The Clean200 companies 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 clean revenue estimate, primarily sourced from Corporate Knights Research supplemented by FactSet, Bloomberg BNEF, and FTSE Russell data. In order to be eligible, a company must have USD revenue of at least $1 billion (most recent available fiscal yearend data) and earn more than 10% of total revenues from clean sources.

The Clean200 uses negative screens. It excludes all oil and gas companies and utilities that generate less than 50 percent of their power from green sources, the top 100 coal companies measured by reserves, the top 100 oil & gas companies as measured by reserves, as well as all fossil fuel companies, majority fossil-fired utilities, pipeline and oil field services companies, and other fossil fuel-related companies screened on As You Sow’s Fossil Free Funds. In addition, the Clean200 excludes weapons companies including major military arms manufacturers found on the SIPRI Top 100 arms-producing and military services list, as well cluster munitions, nuclear weapons, and civilian firearm manufacturers screened on As You Sow’s Weapon Free Funds. The Clean200 also exclude palm oil producers that are screened on As You Sow’s Deforestation Free Funds, companies using child or forced labor, and companies who engage in negative climate lobbying are not included. The full list of exclusionary screens is provided below.

 
Clean200 Negative Screens Criteria Number of Companies Excluded

 Farm Animal Welfare

 Identifies company laggards (Tier 5 or 6) on Farm Animal Welfare practices, based on the Benchmark for Farm Animal Welfare.

0

 Industrial Meat

 Identifies meat companies, according to FactSet RBICS.

0

 Corporate Fines, Penalties
or Settlements

 Identifies laggard companies (bottom quartile) with high monetary fines, penalties and settlements paid as a percentage of total revenue.

1

 Tobacco

 Identifies companies which earn more than 5% of revenue from tobacco using FactSet's RBICS.

0

 Controversial Weapons

The SIPRI Top 100 arms-producing and military services companies in the world (Link); Cluster munitions and landmines, nuclear weapons, gun manufacturers screened by As You Sow Weapon Free Funds tool (Link)

1

 Conventional Weapons

The SIPRI Top 100 arms-producing and military services companies in the world (Link); Cluster munitions and landmines, nuclear weapons, gun manufacturers screened by As You Sow Weapon Free Funds tool (Link)

4

 Small Arms (Hand Guns)

 Identifies companies which earn more than 5% of revenue from sale of  handguns using FactSet's RBICS.

0

 Blocking Climate Policy

 Identifies laggards (scored less than E) in climate regulation readiness according to InfluenceMap.

0

 Severe Environmental
Damage

 Identifies companies which meet NBIM exclusion for "Actions or omissions that constitute an unacceptable risk of the Fund contributing to severe environmental  damages".

1

 Thermal Coal

The FFI Carbon Underground Top 100 companies by coal reserves (Link); Morningstar coal industry company industry classification (Link); Companies which derive at least 30% of revenue from thermal coal as  provided by Oxford Smith School, supplemented by corporate financial disclosures.

1

Non-Green Utilities

Any utility that derives less than 50% revenue from green sources; Macroclimate Top 30 public company owners of coal-fired power plants (Link)

36

 Tropical Deforestation

Scores less than 2 on Forest 500 scale; Palm oil producers screened by the As You Sow/Friends of the Earth Deforestation Free Funds tool (Link)

8

 For-Profit Prison

 Identifies companies which own or operate private prisons according to  FactSet RBICS and two  aggregated private prison divestment lists, from American Friends Service Committee (Quaker) and  Enlace International's National Private Prison Divestment Campaign.

0

 Repressive Regime

 Identifies companies which derive at least 5% of their revenue from countries listed as "worst of the worst" by Freedom House.

1

 Global Compact Principles
Violators

 Companies identified by RepRisk Global Compact database with a  “VIOLATOR_OPERATIONS” flag under either of human rights, labour,
environment or anti-corruption themes.

 

0

 Gambling

 Identifies companies which earn more than 5% of revenue from gambling using FactSet's RBICS.

0

 Pornography

 Companies classified by "Adult Entertainment" by at least one of the cohort of large pension funds with exclusion lists that Corporate Knights monitors.

0

Excess of conventional over clean energy financing

Based on Bloomberg BNEF data and/or corporate disclosures. Companies who sum of conventional energy financing exceeds new energy financing are removed.

0

Child/Forced labour

Source: Know the Chain. Companies which scored in bottom half of Know the Chain rating are removed

9

Oil &Gas

The FFI Carbon Underground Top 100 companies by oil/gas reserves (Link);

1

Ratio of fossil cap-ex to renewables cap ex is greater than 2:1

Where an oil& gas company derives a minority of revenue from renewable energy sources, those whose capital expenditure towards renewable energy business to fossil-fuel energy business is less than 25% (or not disclosed )are removed

1

THE CLEAN200™ List

 

NEW FEATURE: We are pleased to be joined by CleanTechnica, providing a detailed look at 10 key companies from the list of 200.

Check out the links below for more detailed articles.

 
 
Rank Name Country Sector Article
1
Alphabet Inc United States of America Communication Services
2
Siemens AG Germany Industrials  
3
Toyota Motor Corp Japan Consumer Discretionary
4
Cisco Systems Inc United States of America Information Technology  
5
HP Inc United States of America Information Technology  
6
Taiwan Semiconductor Manufacturing Co Ltd Taiwan Information Technology  
7
ABB Ltd Switzerland Industrials  
8
Telefonaktiebolaget LM Ericsson Sweden Information Technology  
9
Unilever PLC United Kingdom Consumer Staples
10
Banco do Brasil SA Brazil Financials  
11
LG Electronics Inc Korea; Republic (S. Korea) Consumer Discretionary  
12
BNP Paribas SA France Financials  
13
Schneider Electric SE France Industrials  
14
Tesla Inc United States of America Consumer Discretionary
15
Vestas Wind Systems A/S Denmark Industrials
16
Umicore SA Belgium Materials  
17
UPM-Kymmene Oyj Finland Materials  
18
Air Liquide SA France Materials  
19
Lenovo Group Ltd China Information Technology  
20
Bombardier Inc Canada Industrials  
21
Adidas AG Germany Consumer Discretionary  
22
Canadian National Railway Co Canada Industrials  
23
Innogy SE Germany Utilities  
24
Kering SA France Consumer Discretionary
25
Koninklijke KPN NV Netherlands Communication Services  
26
Panasonic Corp Japan Consumer Discretionary  
27
Siemens Gamesa Renewable Energy SA Spain Industrials  
28
CSX Corp United States of America Industrials  
29
Solvay SA Belgium Materials  
30
Signify NV Netherlands Industrials  
31
Telus Corp Canada Communication Services  
32
Kone Oyj Finland Industrials  
33
Orsted A/S Denmark Utilities
34
Ecolab Inc United States of America Materials  
35
Nokia Oyj Finland Information Technology  
36
Johnson Controls International PLC Ireland; Republic of Industrials  
37
Ball Corp United States of America Materials  
38
Ricoh Co Ltd Japan Information Technology  
39
Electrolux AB Sweden Consumer Discretionary  
40
LG Chem Ltd Korea; Republic (S. Korea) Materials  
41
Air Products and Chemicals Inc United States of America Materials  
42
Samsung SDI Co Ltd Korea; Republic (S. Korea) Information Technology  
43
Ingersoll-Rand PLC Ireland; Republic of Industrials  
44
Neste Oyj Finland Energy  
45
Dassault Systemes SE France Information Technology  
46
Eaton Corporation PLC Ireland; Republic of Industrials  
47
Praxair Inc United States of America Materials  
48
Verbund AG Austria Utilities  
49
Kingspan Group PLC Ireland; Republic of Industrials  
50
Osram Licht AG Germany Industrials  
51
JinkoSolar Holding Co Ltd China Information Technology  
52
Capitaland Ltd Singapore Real Estate  
53
Acciona SA Spain Utilities  
54
Xinjiang Goldwind Science & Technology Co Ltd China Industrials  
55
China Longyuan Power Group Corp Ltd China Utilities  
56
Akzo Nobel NV Netherlands Materials  
57
Green Plains Inc United States of America Energy  
58
GCL-Poly Energy Holdings Ltd Hong Kong Information Technology  
59
Byd Co Ltd China Consumer Discretionary
60
Acuity Brands Inc United States of America Industrials  
61
Nordex SE Germany Industrials  
62
Emerson Electric Co United States of America Industrials  
63
Spie SA France Industrials  
64
Canadian Solar Inc Canada Information Technology  
65
McCormick & Company Inc United States of America Consumer Staples  
66
City Developments Ltd Singapore Real Estate  
67
Andritz AG Austria Industrials  
68
Nidec Corp Japan Industrials  
69
Companhia Energetica de Minas Gerais CEMIG Brazil Utilities  
70
Shin-Etsu Chemical Co Ltd Japan Materials  
71
Contemporary Amperex Technology Co Ltd China Industrials  
72
First Solar Inc United States of America Information Technology  
73
Doosan Heavy Industries & Construction Co Ltd Korea; Republic (S. Korea) Industrials  
74
Natura Cosmeticos SA Brazil Consumer Staples  
75
Workday Inc United States of America Information Technology  
76
Prologis Inc United States of America Real Estate  
77
Wacker Chemie AG Germany Materials  
78
Autodesk Inc United States of America Information Technology  
79
Centrais Eletricas Brasileiras SA Brazil Utilities  
80
Rexel SA France Industrials  
81
Koninklijke Philips NV Netherlands Health Care  
82
Kao Corp Japan Consumer Staples  
83
China Everbright International Ltd Hong Kong Industrials  
84
Brookfield Renewable Partners LP Bermuda Utilities  
85
China Agri-Industries Holdings Ltd Hong Kong Consumer Staples  
86
Engie Brasil Energia SA Brazil Utilities  
87
Hyosung Corp Korea; Republic (S. Korea) Industrials  
88
Sumitomo Forestry Co Ltd Japan Consumer Discretionary  
89
Norsk Hydro ASA Norway Materials  
90
LONGi Green Energy Technology Co Ltd China Information Technology  
91
Republic Services Inc United States of America Industrials  
92
Sandvik AB Sweden Industrials  
93
Ebara Corp Japan Industrials  
94
Nibe Industrier AB Sweden Industrials  
95
BorgWarner Inc United States of America Consumer Discretionary  
96
Hanwha Q CELLS Co Ltd Korea; Republic (S. Korea) Industrials  
97
Renewable Energy Group Inc United States of America Energy  
98
Quanta Services Inc United States of America Industrials  
99
GCL System Integration Technology Co Ltd China Information Technology  
100
Senvion SA Luxembourg Industrials  
101
Prysmian SpA Italy Industrials  
102
Konica Minolta Inc Japan Information Technology  
103
Tianneng Power International Ltd China Consumer Discretionary  
104
Sino-American Silicon Products Inc Taiwan Information Technology  
105
LS Corp Korea; Republic (S. Korea) Industrials  
106
HELLA GmbH & Co KgaA Germany Consumer Discretionary  
107
Hanwha Chemical Corp Korea; Republic (S. Korea) Materials  
108
SunPower Corp United States of America Information Technology
109
Suedzucker AG Germany Consumer Staples  
110
EDP Renovaveis SA Spain Utilities  
111
Legrand SA France Industrials  
112
NARI Technology Co Ltd China Industrials  
113
EMCOR Group Inc United States of America Industrials  
114
Landis+Gyr Group AG Switzerland Information Technology  
115
Guodian Technology & Environment Group Corp Ltd China Industrials  
116
Zhejiang Chint Electrics Co Ltd China Industrials  
117
Xinte Energy Co Ltd China Industrials  
118
Risen Energy Co Ltd China Information Technology  
119
Sekisui Chemical Co Ltd Japan Consumer Discretionary  
120
Abengoa SA Spain Industrials  
121
Delta Electronics Inc Taiwan Information Technology  
122
Pacific Ethanol Inc United States of America Energy  
123
DIC Corp Japan Materials  
124
OCI Co Ltd Korea; Republic (S. Korea) Materials  
125
Huaneng Renewables Corp Ltd China Utilities  
126
Xuji Electric Co Ltd China Industrials  
127
Outotec Oyj Finland Industrials  
128
Cree Inc United States of America Information Technology  
129
Shunfeng International Clean Energy Ltd China Information Technology  
130
Wartsila Oyj Abp Finland Industrials  
131
Kanematsu Corp Japan Industrials  
132
Owens Corning United States of America Industrials  
133
Xiangtan Electric Manufacturing Co Ltd China Industrials  
134
Global PVQ SE Germany Information Technology  
135
Tianjin Zhonghuan Semiconductor Co Ltd China Information Technology  
136
Jiangsu Zhongli Group Co Ltd China Industrials  
137
Hitachi High-Technologies Corp Japan Information Technology  
138
Avangrid Inc United States of America Utilities  
139
Itron Inc United States of America Information Technology  
140
STMicroelectronics NV Switzerland Information Technology  
141
Stantec Inc Canada Industrials  
142
Sungrow Power Supply Co Ltd China Industrials  
143
Metso Oyj Finland Industrials  
144
Suzlon Energy Ltd India Industrials  
145
Beijing Enterprises Clean Energy Group Ltd Hong Kong Utilities  
146
Caverion Oyj Finland Industrials  
147
Chr Hansen Holding A/S Denmark Materials  
148
Yingli Green Energy Holding Co Ltd China Information Technology  
149
ERG SpA Italy Utilities  
150
Huadian Fuxin Energy Corp Ltd China Utilities  
151
Sanan Optoelectronics Co Ltd China Information Technology  
152
Xinyi Solar Holdings Ltd China Information Technology  
153
China High Speed Transmission Equipment Group Co Ltd Hong Kong Industrials  
154
MLS Co Ltd China Information Technology  
155
Cogeco Communications Inc Canada Communication Services  
156
Transcontinental Inc Canada Industrials  
157
Suzhou Dongshan Precision Manufacturing Co Ltd China Information Technology  
158
Tofas Turk Otomobil Fabrikasi AS Turkey Consumer Discretionary  
159
Delphi Technologies PLC United Kingdom Consumer Discretionary  
160
Biosev SA Brazil Consumer Staples  
161
Clearway Energy Inc United States of America Utilities  
162
China Datang Corp Renewable Power Co Ltd China Utilities  
163
CNPC Capital Co Ltd China Industrials  
164
Kinden Corp Japan Industrials  
165
Dongfang Electric Corp Ltd China Industrials  
166
CropEnergies AG Germany Energy  
167
Nemak SAB de CV Mexico Consumer Discretionary  
168
Atlantica Yield PLC United Kingdom Utilities  
169
SMA Solar Technology AG Germany Information Technology
170
Cargotec Oyj Finland Industrials  
171
Shenzhen Desay Battery Technology Co Ltd China Industrials  
172
Jiangsu Zhongtian Technology Co Ltd China Industrials  
173
Stanley Electric Co Ltd Japan Consumer Discretionary  
174
EDP Energias do Brasil SA Brazil Utilities  
175
Wuxi Taiji Industry Co Ltd China Information Technology  
176
Resolute Forest Products Inc Canada Materials  
177
GS Yuasa Corp Japan Industrials  
178
Andersons Inc United States of America Consumer Staples  
179
Hubbell Inc United States of America Industrials  
180
Hitachi Capital Corp Japan Financials  
181
Chaowei Power Holdings Ltd China Consumer Discretionary  
182
Arcadis NV Netherlands Industrials  
183
Rohm Co Ltd Japan Information Technology  
184
SIG PLC United Kingdom Industrials  
185
Valmet Oyj Finland Industrials  
186
Light SA Brazil Utilities  
187
Sacyr SA Spain Industrials  
188
Geberit AG Switzerland Industrials  
189
WSP Global Inc Canada Industrials  
190
Hitachi Zosen Corp Japan Industrials  
191
China Shipbuilding Industry Group Power Co Ltd China Consumer Discretionary  
192
Regal Beloit Corp United States of America Industrials  
193
Globalwafers Co Ltd Taiwan Information Technology  
194
Amadeus IT Group SA Spain Information Technology  
195
CHONGQING SOKON INDUSTRY GROUP STOCK Co Ltd China Consumer Discretionary  
196
Timken Co United States of America Industrials  
197
A. O. Smith Corp United States of America Industrials  
198
WEG SA Brazil Industrials  
199
OC Oerlikon Corporation AG Pfaeffikon Switzerland Industrials  
200
Wooree Lighting Co Ltd Korea; Republic (S. Korea) Industrials