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 

Rank	Company	Sector	Country
1	Taiwan Semiconductor Manufacturing Co	Information Technology	Taiwan
2	Alphabet Inc	Communication Services	United States
3	Siemens AG	Industrials	Germany
4	Toyota Motor Corp	Consumer Discretionary	Japan
5	HP Inc	Information Technology	United States
6	Iberdrola SA	Utilities	Spain
7	Cisco Systems Inc	Information Technology	United States
8	Tesla Inc	Consumer Discretionary	United States
9	Schneider Electric SE	Industrials	France
10	Unilever PLC	Consumer Staples	United Kingdom
11	Lenovo Group Ltd	Information Technology	China
12	Abb Ltd	Industrials	Switzerland
13	Vestas Wind Systems A/S	Industrials	Denmark
14	Umicore SA	Materials	Belgium
15	Valeo SA	Consumer Discretionary	France
16	Intel Corp	Information Technology	United States
17	Banco do Brasil SA	Financials	Brazil
18	Air Liquide SA	Materials	France
19	Compagnie de Saint Gobain SA	Industrials	France
20	Companhia Energetica de Minas Gerais CEMIG	Utilities	Brazil
21	Hitachi Ltd	Information Technology	Japan
22	Sanofi SA	Health Care	France
23	Canadian National Railway Co	Industrials	Canada
24	Accenture PLC	Information Technology	Ireland
25	Telefonaktiebolaget LM Ericsson	Information Technology	Sweden
26	Byd Co Ltd	Consumer Discretionary	China
27	Kimberly-Clark Corp	Consumer Staples	United States
28	Kering SA	Consumer Discretionary	France
29	Panasonic Corp	Consumer Discretionary	Japan
30	Alstom SA	Industrials	France
31	Samsung SDI Co Ltd	Information Technology	South Korea
32	Aisin Seiki Co Ltd	Consumer Discretionary	Japan
33	BT Group PLC	Communication Services	United Kingdom
34	Nokia Oyj	Information Technology	Finland
35	Johnson Controls International PLC	Industrials	Ireland
36	Orsted A/S	Utilities	Denmark
37	Hewlett Packard Enterprise Co	Information Technology	United States
38	SAP SE	Information Technology	Germany
39	Konica Minolta Inc	Information Technology	Japan
40	Kone Oyj	Industrials	Finland
41	Adidas AG	Consumer Discretionary	Germany
42	Siemens Gamesa Renewable Energy SA	Industrials	Spain
43	Sumitomo Electric Industries Ltd	Consumer Discretionary	Japan
44	Koninklijke KPN NV	Communication Services	Netherlands
45	Smurfit Kappa Group PLC	Materials	Ireland
46	Ecolab Inc	Materials	United States
47	Prysmian SpA	Industrials	Italy
48	Natura Cosmeticos SA	Consumer Staples	Brazil
49	Ball Corp	Materials	United States
50	Sims Metal Management Ltd	Materials	United States
51	Keppel Corporation Ltd	Industrials	Singapore
52	Canadian Pacific Railway Ltd	Industrials	Canada
53	Signify NV	Industrials	Netherlands
54	Bombardier Inc	Industrials	Canada
55	Ricoh Co Ltd	Information Technology	Japan
56	Emerson Electric Co	Industrials	United States
57	Asahi Kasei Corp	Materials	Japan
58	Danaher Corp	Health Care	United States
59	Sekisui House Ltd	Consumer Discretionary	Japan
60	Avangrid Inc	Utilities	United States
61	Contemporary Amperex Technology Co Ltd	Industrials	China
62	Koninklijke DSM NV	Materials	Netherlands
63	Xinjiang Goldwind Science & Technology Co Ltd	Industrials	China
64	Dassault Systemes SE	Information Technology	France
65	Osram Licht AG	Industrials	Germany
66	Ingersoll-Rand PLC	Industrials	United States
67	Skanska AB	Industrials	Sweden
68	Verbund AG	Utilities	Austria
69	CSX Corp	Industrials	United States
70	Canadian Solar Inc	Information Technology	Canada
71	China Longyuan Power Group Corp Ltd	Utilities	China
72	Akzo Nobel NV	Materials	Netherlands
73	JinkoSolar Holding Co Ltd	Information Technology	China
74	Takeda Pharmaceutical Co Ltd	Health Care	Japan
75	Shimizu Corp	Industrials	Japan
76	LG Chem Ltd	Materials	South Korea
77	Sekisui Chemical Co Ltd	Consumer Discretionary	Japan
78	Solvay SA	Materials	Belgium
79	Fanuc Corp	Industrials	Japan
80	Murata Manufacturing Co Ltd	Information Technology	Japan
81	City Developments Ltd	Real Estate	Singapore
82	LONGi Green Energy Technology Co Ltd	Information Technology	China
83	Kingspan Group PLC	Industrials	Ireland
84	West Japan Railway Co	Industrials	Japan
85	Cascades Inc	Materials	Canada
86	American Water Works Company Inc	Utilities	United States
87	Waste Management Inc	Industrials	United States
88	Electrolux AB	Consumer Discretionary	Sweden
89	GCL-Poly Energy Holdings Ltd	Information Technology	Hong Kong
90	Aptiv PLC	Consumer Discretionary	United Kingdom
91	SMC Corp	Industrials	Japan
92	Parker-Hannifin Corp	Industrials	United States
93	VMware Inc	Information Technology	United States
94	Biomerieux SA	Health Care	France
95	McCormick & Company Inc	Consumer Staples	United States
96	Legrand SA	Industrials	France
97	Lite-On Technology Corp	Information Technology	Taiwan
98	Wartsila Oyj Abp	Industrials	Finland
99	Koninklijke Philips NV	Health Care	Netherlands
100	MLS Co Ltd	Information Technology	China
101	Capitaland Ltd	Real Estate	Singapore
102	Melrose Industries PLC	Industrials	United Kingdom
103	Rexel SA	Industrials	France
104	Sino-American Silicon Products Inc	Information Technology	Taiwan
105	Tianneng Power International Ltd	Consumer Discretionary	China
106	Air Products and Chemicals Inc	Materials	United States
107	H & M Hennes & Mauritz AB	Consumer Discretionary	Sweden
108	Autodesk Inc	Information Technology	United States
109	Spie SA	Industrials	France
110	China Everbright International Ltd	Industrials	Hong Kong
111	China Railway Signal & Communication Corp Ltd	Information Technology	China
112	Kao Corp	Consumer Staples	Japan
113	Eaton Corporation PLC	Industrials	United States
114	Atlas Copco AB	Industrials	Sweden
115	Doosan Co Ltd	Industrials	South Korea
116	Andritz AG	Industrials	Austria
117	Workday Inc	Information Technology	United States
118	Norsk Hydro ASA	Materials	Norway
119	FirstGroup PLC	Industrials	United Kingdom
120	Analog Devices Inc	Information Technology	United States
121	United Natural Foods Inc	Consumer Staples	United States
122	NARI Technology Co Ltd	Industrials	China
123	NSK Ltd	Industrials	Japan
124	Aalberts NV	Industrials	Netherlands
125	Tianjin Zhonghuan Semiconductor Co Ltd	Information Technology	China
126	AB SKF	Industrials	Sweden
127	Zhejiang Chint Electrics Co Ltd	Industrials	China
128	Samsung Electro-Mechanics Co Ltd	Information Technology	South Korea
129	Green Plains Inc	Energy	United States
130	LG Innotek Co Ltd	Information Technology	South Korea
131	Brookfield Renewable Partners LP	Utilities	Canada
132	Acuity Brands Inc	Industrials	United States
133	China Agri-Industries Holdings Ltd	Consumer Staples	Hong Kong
134	Nexans SA	Industrials	France
135	MTR Corp Ltd	Industrials	Hong Kong
136	Sandvik AB	Industrials	Sweden
137	eBay Inc	Consumer Discretionary	United States
138	Applied Materials Inc	Information Technology	United States
139	THK Co Ltd	Industrials	Japan
140	Wacker Chemie AG	Materials	Germany
141	Nordex SE	Industrials	Germany
142	Doosan Heavy Industries & Construction Co Ltd	Industrials	South Korea
143	Omron Corp	Information Technology	Japan
144	Xinte Energy Co Ltd	Industrials	China
145	Keikyu Corp	Industrials	Japan
146	Delta Electronics Inc	Information Technology	Taiwan
147	Huaneng Renewables Corp Ltd	Utilities	China
148	Nitto Denko Corp	Materials	Japan
149	Guodian Technology & Environment Group Corp Ltd	Industrials	China
150	Essity AB (publ)	Consumer Staples	Sweden
151	Air Water Inc	Materials	Japan
152	Kansas City Southern	Industrials	United States
153	Shin-Etsu Chemical Co Ltd	Materials	Japan
154	GCL System Integration Technology Co Ltd	Information Technology	China
155	ASML Holding NV	Information Technology	Netherlands
156	CIMIC Group Ltd	Industrials	Australia
157	Nidec Corp	Industrials	Japan
158	Amcor PLC	Materials	Australia
159	Weyerhaeuser Co	Real Estate	United States
160	NTN Corp	Industrials	Japan
161	Sungrow Power Supply Co Ltd	Industrials	China
162	Shunfeng International Clean Energy Ltd	Information Technology	China
163	Metso Oyj	Industrials	Finland
164	NCC Ltd	Industrials	India
165	DSV A/S	Industrials	Denmark
166	Siemens Ltd	Industrials	India
167	TE Connectivity Ltd	Information Technology	Switzerland
168	Dover Corp	Industrials	United States
169	Suzhou Dongshan Precision Manufacturing Co Ltd	Information Technology	China
170	Suzlon Energy Ltd	Industrials	India
171	Risen Energy Co Ltd	Information Technology	China
172	GEA Group AG	Industrials	Germany
173	Evoqua Water Technologies Corp	Industrials	United States
174	China Lesso Group Holdings Ltd	Industrials	China
175	Jindal SAW Ltd	Materials	India
176	Clariant AG	Materials	Switzerland
177	Pearson PLC	Communication Services	United Kingdom
178	Fortive Corp	Industrials	United States
179	Ebara Corp	Industrials	Japan
180	Nibe Industrier AB	Industrials	Sweden
181	Chr Hansen Holding A/S	Materials	Denmark
182	STMicroelectronics NV	Information Technology	Switzerland
183	COFCO Biochemical Anhui Co Ltd	Materials	China
184	Shenzhen Desay Battery Technology Co Ltd	Industrials	China
185	Sika AG	Materials	Switzerland
186	Graphic Packaging Holding Co	Materials	United States
187	SNC-Lavalin Group Inc	Industrials	Canada
188	EDP Renovaveis SA	Utilities	Spain
189	Tofas Turk Otomobil Fabrikasi AS	Consumer Discretionary	Turkey
190	Renewable Energy Group Inc	Energy	United States
191	Transcontinental Inc	Industrials	Canada
192	Itron Inc	Information Technology	United States
193	LS Corp	Industrials	South Korea
194	Stantec	Industrials	Canada
195	Peab AB	Industrials	Sweden
196	Sanan Optoelectronics Co Ltd	Information Technology	China
197	Jiangsu Zhongli Group Co Ltd	Industrials	CHINA
198	ON Semiconductor Corp	Information Technology	United States
199	China Datang Corp Renewable Power Co Ltd	Utilities	China
200	Xuji Electric Co Ltd	Industrials	China

 

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 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)	2
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)	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 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)	2
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)	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 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.	13
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)	28
Tropical Deforestation	Scores 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 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	2
Oil &Gas	The FFI Carbon Underground Top 100 companies by oil/gas reserves (Link);	0
Ratio of fossil cap-ex to renewables cap ex is greater than 2:1	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	0