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The Carbon Clean200: Leading the transition to a clean energy future

Corporate Knights and As You Sow have released our 7th 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 a great deal has changed in the world.

Larry Fink, the CEO of the largest investment firm in the world, shook up Wall Street this January stating that we are “on the edge of a fundamental reshaping of finance” with climate change as a defining feature, that “climate risk in investing risk…in the near future – and sooner than most anticipate – there will be a significant reallocation of capital.”

In between Fink’s letter, Greta Thunberg’s call for a radical change acceleration on the pace of climate action took over the agenda at Davos during the World Economic Forum, where a new manifesto proclaimed stakeholder capitalism and ESG define the new economy and Larry Fink was spotted wearing a rare-edition 2 degrees scarf around his neck.

Another inflection point in the popular culture realm occurred during halftime at Superbowl 2020, where the company that once “killed the electric car” purchased a prime advertising slot to showcase their new electric Hummer with LeBron James as the pitchman.

The fundamental story is that march from high carbon energy to clean energy is only quickening driven mainly by economics, risk, and increasingly supported by other social forces from Greta to Pope Francis; from Extinction Rebellion to The European Central Bank.

Investors have awoken to this trend, which helps to account for the anomalous direction of oil prices and oil stock values in 2019. Brent Crude Oil prices rose 28% and WTI oil prices rose 30% last year, while the energy sector placed dead last in the Standard & Poor’s 500 index, posting a 7.3% gain, while the index as a whole rose 29% for the year.

Financial markets are driven by two powerful emotions: greed and fear.

As the outgoing governor of the Bank of England, Mark Carney, puts it, “Companies that don’t adapt [to the low-carbon economy] – including companies in the financial system – will go bankrupt without question. [But] there will be great fortunes made along this path aligned with what society wants.”

To wit: the top five coal companies in the U.S. have all declared bankruptcy since 2016, and Apple is now bigger than all the oil and gas companies on the S&P 500 combined, in large part because they have earned negative returns over the last decade, even after accounting for dividends.

Carbon-intensive companies are suffering because the alternatives are not just cleaner but cheaper. Around two-thirds of the world’s population now live in countries in which wind or solar are the lowest-cost ways of generating power. Renewables are now cheaper than coal in two-thirds of the world’s countries, according to Bloomberg New Energy Finance. BNP Paribas estimates that oil needs to come down to US$10 a barrel to be competitive with electricity-driven transport. This does not mean fossil fuels are going away tomorrow, but it does kill the growth story and leads to questions about demand assumptions on big oil’s economic forecast. For oil investors, the market’s realization of this inevitable decline could make the coal horror show look like Mary Poppins.

This increasing speed of the energy transition is part of the reason why investors representing US$12 trillion in assets have made public their divestment from fossil fuels.

Perhaps more telling is that beyond these public declarations, many of the biggest investors in the world are selling off their fossil fuel holdings and loading up on green assets. For example, without any fanfare the C$200 billion Ontario Teachers’ Pension Plan has dialed down its fossil-fuel equity holdings to just 1%. On the upside, the C$306 billion Caisse de dépôt et placement du Québec (CDPQ) has grown its green investment book to C$30 billion, earning commercial returns along the way, according to outgoing chief executive Michael Sabia.

While economics are shifting in favor of clean energy investing, so is public sentiment. Call it the Greta effect if you like, but most people are no longer comfortable with the idea that their retirement investments may be helping to set the world on fire and we are seeing this especially in millennials and women.

Andreas Utermann, chief executive of Allianz Global Investors, which manages US$600 billion, says, “Clients have changed their tune. They have said we need to take this more seriously, and that has sharpened the minds of asset managers.”

With all this action, we hope that the Clean200 can to do two things:

  • provide a useful North star for investors looking to pinpoint the companies leading the way to a clean energy future.
  • to dispel the myth that clean investing is about sacrificing returns.

Efficient market theorists caution that if you add any non-financial considerations to portfolio selection, you are at a financial disadvantage. The trouble with this theory is that investing in a time of transition is like hitting a curveball. Putting on a clean energy lens gives the batter a better sense of the ball’s trajectory and increases the chance of making solid contact.

To make things easier, Corporate Knights and As You Sow are proud to present the latest edition of the Clean200.

While we’re not promising any home runs, we are happy to report that the Clean200 now has more than a three-year track record of outperforming its high-carbon global counterparts.

 

Clean 200 returns

 

Since inception (July 1, 2016), the Clean200 has generally been ahead of the MSCI ACWI Energy Index.

 

Source: S&P IQ Capital, 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 generally outperformed the MSCI ACWI Energy Index. It will be interesting to see how the trends unfold over the next few months.

 

The Clean200 list 

RankCompanySectorCountry
1Taiwan Semiconductor Manufacturing CoInformation TechnologyTaiwan
2Alphabet IncCommunication ServicesUnited States
3Siemens AGIndustrialsGermany
4Toyota Motor CorpConsumer DiscretionaryJapan
5HP IncInformation TechnologyUnited States
6Iberdrola SAUtilitiesSpain
7Cisco Systems IncInformation TechnologyUnited States
8Tesla IncConsumer DiscretionaryUnited States
9Schneider Electric SEIndustrialsFrance
10Unilever PLCConsumer StaplesUnited Kingdom
11Lenovo Group LtdInformation TechnologyChina
12Abb LtdIndustrialsSwitzerland
13Vestas Wind Systems A/SIndustrialsDenmark
14Umicore SAMaterialsBelgium
15Valeo SAConsumer DiscretionaryFrance
16Intel CorpInformation TechnologyUnited States
17Banco do Brasil SAFinancialsBrazil
18Air Liquide SAMaterialsFrance
19Compagnie de Saint Gobain SAIndustrialsFrance
20Companhia Energetica de Minas Gerais CEMIGUtilitiesBrazil
21Hitachi LtdInformation TechnologyJapan
22Sanofi SAHealth CareFrance
23Canadian National Railway CoIndustrialsCanada
24Accenture PLCInformation TechnologyIreland
25Telefonaktiebolaget LM EricssonInformation TechnologySweden
26Byd Co LtdConsumer DiscretionaryChina
27Kimberly-Clark CorpConsumer StaplesUnited States
28Kering SAConsumer DiscretionaryFrance
29Panasonic CorpConsumer DiscretionaryJapan
30Alstom SAIndustrialsFrance
31Samsung SDI Co LtdInformation TechnologySouth Korea
32Aisin Seiki Co LtdConsumer DiscretionaryJapan
33BT Group PLCCommunication ServicesUnited Kingdom
34Nokia OyjInformation TechnologyFinland
35Johnson Controls International PLCIndustrialsIreland
36Orsted A/SUtilitiesDenmark
37Hewlett Packard Enterprise CoInformation TechnologyUnited States
38SAP SEInformation TechnologyGermany
39Konica Minolta IncInformation TechnologyJapan
40Kone OyjIndustrialsFinland
41Adidas AGConsumer DiscretionaryGermany
42Siemens Gamesa Renewable Energy SAIndustrialsSpain
43Sumitomo Electric Industries LtdConsumer DiscretionaryJapan
44Koninklijke KPN NVCommunication ServicesNetherlands
45Smurfit Kappa Group PLCMaterialsIreland
46Ecolab IncMaterialsUnited States
47Prysmian SpAIndustrialsItaly
48Natura Cosmeticos SAConsumer StaplesBrazil
49Ball CorpMaterialsUnited States
50Sims Metal Management LtdMaterialsUnited States
51Keppel Corporation LtdIndustrialsSingapore
52Canadian Pacific Railway LtdIndustrialsCanada
53Signify NVIndustrialsNetherlands
54Bombardier IncIndustrialsCanada
55Ricoh Co LtdInformation TechnologyJapan
56Emerson Electric CoIndustrialsUnited States
57Asahi Kasei CorpMaterialsJapan
58Danaher CorpHealth CareUnited States
59Sekisui House LtdConsumer DiscretionaryJapan
60Avangrid IncUtilitiesUnited States
61Contemporary Amperex Technology Co LtdIndustrialsChina
62Koninklijke DSM NVMaterialsNetherlands
63Xinjiang Goldwind Science & Technology Co LtdIndustrialsChina
64Dassault Systemes SEInformation TechnologyFrance
65Osram Licht AGIndustrialsGermany
66Ingersoll-Rand PLCIndustrialsUnited States
67Skanska ABIndustrialsSweden
68Verbund AGUtilitiesAustria
69CSX CorpIndustrialsUnited States
70Canadian Solar IncInformation TechnologyCanada
71China Longyuan Power Group Corp LtdUtilitiesChina
72Akzo Nobel NVMaterialsNetherlands
73JinkoSolar Holding Co LtdInformation TechnologyChina
74Takeda Pharmaceutical Co LtdHealth CareJapan
75Shimizu CorpIndustrialsJapan
76LG Chem LtdMaterialsSouth Korea
77Sekisui Chemical Co LtdConsumer DiscretionaryJapan
78Solvay SAMaterialsBelgium
79Fanuc CorpIndustrialsJapan
80Murata Manufacturing Co LtdInformation TechnologyJapan
81City Developments LtdReal EstateSingapore
82LONGi Green Energy Technology Co LtdInformation TechnologyChina
83Kingspan Group PLCIndustrialsIreland
84West Japan Railway CoIndustrialsJapan
85Cascades IncMaterialsCanada
86American Water Works Company IncUtilitiesUnited States
87Waste Management IncIndustrialsUnited States
88Electrolux ABConsumer DiscretionarySweden
89GCL-Poly Energy Holdings LtdInformation TechnologyHong Kong
90Aptiv PLCConsumer DiscretionaryUnited Kingdom
91SMC CorpIndustrialsJapan
92Parker-Hannifin CorpIndustrialsUnited States
93VMware IncInformation TechnologyUnited States
94Biomerieux SAHealth CareFrance
95McCormick & Company IncConsumer StaplesUnited States
96Legrand SAIndustrialsFrance
97Lite-On Technology CorpInformation TechnologyTaiwan
98Wartsila Oyj AbpIndustrialsFinland
99Koninklijke Philips NVHealth CareNetherlands
100MLS Co LtdInformation TechnologyChina
101Capitaland LtdReal EstateSingapore
102Melrose Industries PLCIndustrialsUnited Kingdom
103Rexel SAIndustrialsFrance
104Sino-American Silicon Products IncInformation TechnologyTaiwan
105Tianneng Power International LtdConsumer DiscretionaryChina
106Air Products and Chemicals IncMaterialsUnited States
107H & M Hennes & Mauritz ABConsumer DiscretionarySweden
108Autodesk IncInformation TechnologyUnited States
109Spie SAIndustrialsFrance
110China Everbright International LtdIndustrialsHong Kong
111China Railway Signal & Communication Corp LtdInformation TechnologyChina
112Kao CorpConsumer StaplesJapan
113Eaton Corporation PLCIndustrialsUnited States
114Atlas Copco ABIndustrialsSweden
115Doosan Co LtdIndustrialsSouth Korea
116Andritz AGIndustrialsAustria
117Workday IncInformation TechnologyUnited States
118Norsk Hydro ASAMaterialsNorway
119FirstGroup PLCIndustrialsUnited Kingdom
120Analog Devices IncInformation TechnologyUnited States
121United Natural Foods IncConsumer StaplesUnited States
122NARI Technology Co LtdIndustrialsChina
123NSK LtdIndustrialsJapan
124Aalberts NVIndustrialsNetherlands
125Tianjin Zhonghuan Semiconductor Co LtdInformation TechnologyChina
126AB SKFIndustrialsSweden
127Zhejiang Chint Electrics Co LtdIndustrialsChina
128Samsung Electro-Mechanics Co LtdInformation TechnologySouth Korea
129Green Plains IncEnergyUnited States
130LG Innotek Co LtdInformation TechnologySouth Korea
131Brookfield Renewable Partners LPUtilitiesCanada
132Acuity Brands IncIndustrialsUnited States
133China Agri-Industries Holdings LtdConsumer StaplesHong Kong
134Nexans SAIndustrialsFrance
135MTR Corp LtdIndustrialsHong Kong
136Sandvik ABIndustrialsSweden
137eBay IncConsumer DiscretionaryUnited States
138Applied Materials IncInformation TechnologyUnited States
139THK Co LtdIndustrialsJapan
140Wacker Chemie AGMaterialsGermany
141Nordex SEIndustrialsGermany
142Doosan Heavy Industries & Construction Co LtdIndustrialsSouth Korea
143Omron CorpInformation TechnologyJapan
144Xinte Energy Co LtdIndustrialsChina
145Keikyu CorpIndustrialsJapan
146Delta Electronics IncInformation TechnologyTaiwan
147Huaneng Renewables Corp LtdUtilitiesChina
148Nitto Denko CorpMaterialsJapan
149Guodian Technology & Environment Group Corp LtdIndustrialsChina
150Essity AB (publ)Consumer StaplesSweden
151Air Water IncMaterialsJapan
152Kansas City SouthernIndustrialsUnited States
153Shin-Etsu Chemical Co LtdMaterialsJapan
154GCL System Integration Technology Co LtdInformation TechnologyChina
155ASML Holding NVInformation TechnologyNetherlands
156CIMIC Group LtdIndustrialsAustralia
157Nidec CorpIndustrialsJapan
158Amcor PLCMaterialsAustralia
159Weyerhaeuser CoReal EstateUnited States
160NTN CorpIndustrialsJapan
161Sungrow Power Supply Co LtdIndustrialsChina
162Shunfeng International Clean Energy LtdInformation TechnologyChina
163Metso OyjIndustrialsFinland
164NCC LtdIndustrialsIndia
165DSV A/SIndustrialsDenmark
166Siemens LtdIndustrialsIndia
167TE Connectivity LtdInformation TechnologySwitzerland
168Dover CorpIndustrialsUnited States
169Suzhou Dongshan Precision Manufacturing Co LtdInformation TechnologyChina
170Suzlon Energy LtdIndustrialsIndia
171Risen Energy Co LtdInformation TechnologyChina
172GEA Group AGIndustrialsGermany
173Evoqua Water Technologies CorpIndustrialsUnited States
174China Lesso Group Holdings LtdIndustrialsChina
175Jindal SAW LtdMaterialsIndia
176Clariant AGMaterialsSwitzerland
177Pearson PLCCommunication ServicesUnited Kingdom
178Fortive CorpIndustrialsUnited States
179Ebara CorpIndustrialsJapan
180Nibe Industrier ABIndustrialsSweden
181Chr Hansen Holding A/SMaterialsDenmark
182STMicroelectronics NVInformation TechnologySwitzerland
183COFCO Biochemical Anhui Co LtdMaterialsChina
184Shenzhen Desay Battery Technology Co LtdIndustrialsChina
185Sika AGMaterialsSwitzerland
186Graphic Packaging Holding CoMaterialsUnited States
187SNC-Lavalin Group IncIndustrialsCanada
188EDP Renovaveis SAUtilitiesSpain
189Tofas Turk Otomobil Fabrikasi ASConsumer DiscretionaryTurkey
190Renewable Energy Group IncEnergyUnited States
191Transcontinental IncIndustrialsCanada
192Itron IncInformation TechnologyUnited States
193LS CorpIndustrialsSouth Korea
194StantecIndustrialsCanada
195Peab ABIndustrialsSweden
196Sanan Optoelectronics Co LtdInformation TechnologyChina
197Jiangsu Zhongli Group Co LtdIndustrialsCHINA
198ON Semiconductor CorpInformation TechnologyUnited States
199China Datang Corp Renewable Power Co LtdUtilitiesChina
200Xuji Electric Co LtdIndustrialsChina

 

For full results, including last year’s Clean 200 companies that didn’t make the cut this year, this year’s new entrants and companies excluded from our 2020 list, click here:

Clean 200_2020_Download.

 

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 2019 (December 31, 2019).

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. In order to be eligible, a company must have USD revenue of at least $1 billion (most recent available fiscal year end 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 excludes palm oil, paper/pulp, rubber, timber, beef, and soy 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.2
 Tobacco Identifies companies which earn more than 5% of revenue from tobacco using FactSet’s RBICS.0
 Controversial WeaponsThe 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) 2
 Conventional WeaponsThe 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) 2
 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.2
 Tobacco Identifies companies which earn more than 5% of revenue from tobacco using FactSet’s RBICS.0
 Controversial WeaponsThe 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) 2
 Conventional WeaponsThe 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) 2

 

 

 

 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.1
 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 CoalThe 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.13
Non-Green UtilitiesAny utility that derives less than 50% revenue from green sources; Macroclimate Top 30 public company owners of coal-fired power plants (Link)28
 Tropical DeforestationScores less than 2 on Forest 500 scale; Palm oil, paper/pulp, rubber, timber, beef, and soy 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.0
 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 financingBased on Bloomberg BNEF data and/or corporate disclosures. Companies who sum of conventional energy financing exceeds new energy financing are removed.0
Child/Forced labourSource: Know the Chain. Companies which scored in bottom half of Know the Chain rating are removed2
Oil &GasThe FFI Carbon Underground Top 100 companies by oil/gas reserves (Link);0
Ratio of fossil cap-ex to renewables cap ex is greater than 2:1Where 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 removed0

 

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