FOREWORD

Corporate Knights and As You Sow have released the annual update of the Clean200 global 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, wrote in his 2022 letter to CEOs:

“It’s been two years since I wrote that climate risk is investment risk. And in that short period, we have seen a tectonic shift of capital. Sustainable investments have now reached $4 trillion. Actions and ambitions towards decarbonization have also increased. This is just the beginning – the tectonic shift towards sustainable investing is still accelerating. Whether it is capital being deployed into new ventures focused on energy innovation, or capital transferring from traditional indexes into more customized portfolios and products, we will see more money in motion. Every company and every industry will be transformed by the transition to a net zero world.”

It is these very companies in 35 countries that make up the Carbon Clean 200.

More than 1,000 companies have now committed to a net-zero-emission target in line with a 1.5°C future, representing US$23 trillion in market capitalization, more than the GDP of the United States.

The Clean200 companies are leading the way by putting sustainability at the heart of their products, services, business models, and investments, helping to move the world onto a more sustainable trajectory.

This year’s Clean200 companies rose to the top of a pool of 8,480 global firms based on rigorous assessment of the amount of revenue each company earns from products and services aligned with the Corporate Knights Clean Economy Taxonomy. They did so while ensuring that their businesses are not fundamentally offside important criteria for socially responsible investors, including being a company flagged by As You Sow’s Invest Your Values platform, which identifies fossil fuels, weapons, private prisons, thermal coal, or having a record of systemically obstructing climate policy.

Key Findings:

Geographically, Europe and the Americas each account for 37.5% of this year’s Clean200, while the remaining 50 companies are headquartered in the Asia Pacific region. The United States dominated the 2022 list, with 52 companies on the Clean200, while Canada had the second largest share with 18, closely followed by China, which 16 Clean200 companies are headquartered in.

On average, 58% of revenues earned by Clean200 companies are classified as clean, which is up from 39% in 2021 and significantly above the 20% average clean revenue for their MSCI ACWI peers.

But none of this would have legs if the Clean200 weren’t also faring well financially. On this score, as of January 31, 2022, the Clean200 has outperformed its MSCI ACWI peers by 3.94% since the Clean200 was launched in July of 2016.

Clean200 companies generated a total return of 107.09%, beating the MSCI ACWI broad market index (103.15%) and MSCI ACWI/Energy Index of fossil fuel companies (31.67%) on Total Return Gross — USD Basis from the Clean200 inception of July 1, 2016, to January 31, 2022.

To put that in context: $10,000 invested in the Clean200 on July 1, 2016, would have grown to $20,709 by January 31, 2022, versus $20,315 for the MSCI ACWI broad market benchmark and $13,167 for the MSCI ACWI/Energy benchmark for fossil fuel companies.

Looking Ahead:

What is needed now is for the rest of the business world, most importantly the big-money investors who have been sitting on the sidelines, to also lean into this form of clean capitalism.

Now that BlackRock, the largest investor in the world, with a whopping US$8.7 trillion under management, has jumped on the net-zero-emissions bandwagon, it is only a matter of time before it becomes the standard, placing a 100% sustainable and zero-carbon economy within our grasp. To date, financial firms have pledged that more than US$130 trillion of assets will be net-zero by 2050.

The good news for our species is that the forces of pride and profit have shifted to support the emerging regenerative economy based on justice and sustainability, leaving the extractive economy to wind down. We will see this escalate as the transition kicks in and every company on the planet reduces emissions by 5% per year over the next decade.

With the sun shining on climate solutions, companies are free at last to shed their carbon cloaks.

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

1. Provide a useful north star for investors looking to pinpoint the companies leading the way to a clean energy future.
2. Dispel the myth that clean investing is about sacrificing returns.

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 five-year track record and is outperforming both the broad-based benchmark and its high-carbon global counterparts.

CLEAN200 PERFORMANCE VS. BENCHMARK

CLEAN200 COMPANIES BY COUNTRY

The post Report: Meet the top 200 companies investing in a clean energy future appeared first on 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.

 

The post Introducing the 2019 Clean200 appeared first on Corporate Knights.

Marc Grynberg

Chief Executive Officer, Umicore

GICS Industry: Chemicals

The public sector – through smart regulation – can provide an essential framework for the low carbon economy while the private sector is best placed to provide the innovation and technologies to bring the low carbon revolution to life. Umicore provides materials and recycling solutions that enable low carbon technologies. Our cathode materials are key ingredients in determining the performance and cost of the batteries in electric cars and buses. We also contribute to overall lower carbon footprints for the production of precious and scarce metals thanks to our unique recycling processes.

Peder Holk Nielsen

Chief Executive Officer, Novozymes

GICS Industry: Chemicals

We are witnessing a fascinating global shift in the role of businesses. A realization that some of the world’s most pressing challenges – climate change, dwindling natural resources, rising population – both represent risk and some of our biggest future business opportunities.

It is clear that the private sector plays a key role and bears a big responsibility to drive the global sustainability agenda. The Sustainable Development Goals (SDG) point towards the many opportunities for companies that spring from this agenda. They point companies in the right direction to deliver solutions that contribute to sustainable growth. Seen in this way, they are a trillion-dollar business opportunity for the companies that get it right.

The SDGs have guided Novozymes’ own long-term targets for fulfilling the company’s stated purpose of finding biological answers for better lives in a growing world. Among those targets is an ambition to reach six billion people with our biological solutions, deliver 10 transformative innovations, catalyze five global partnerships for change, educate 1 million people about the potential of biology, and save 100 million tons of CO2 through the use of our products – all by 2020. This is our interpretation of where we can make a difference in the world.

Michel Letellier

President & Chief Executive Officer, Innergex Renewable Energy

GICS Industry: Independent Power & Renewable Electricity

Innergex Renewable Energy Inc. has been an active leader in the renewable energy sector since 1990. We are proud of our success in fostering economic development opportunities working in partnership with First Nations and rural communities. We believe that the transition to a low carbon economy is essential to the future growth of not only a healthy society and environment, but a robust and growing economy and that’s’ why we have been and will continue to be committed to produce renewable energy exclusively.

Independent power producers need to keep engaging governments to adopt policies that will make it easier for clean energy to replace traditional sources of energy. We have the ability to leverage our creativity and capital to get clean energy to the market and at the same time help government achieve climate change goals.

We firmly believe that private investment will continue to drive the shift toward a low-carbon future.

Henrik Poulsen

Chief Executive Officer, DONG Energy

GICS Industry: Electric Utilities

Climate change is already impacting millions of lives through extreme weather events and poor air quality. Political agreements to fight climate change are crucial, but corporations also need to take action and do their part. On the demand-side, many leading corporations are setting the example by investing in green power purchase agreements or renewable energy assets. And on the supply-side, energy companies like ourselves must push forward on the shift from fossil fuels to renewables. DONG Energy has come a long way in making offshore wind competitive to fossil fuels, and we recently announced our ambition to completely phase out coal by 2023.

Eric Rondolat

Chief Executive Officer, Philips Lighting

GICS Industry: Electrical Equipment

Philips Lighting contributes to a low-carbon future in two ways. First, we deliver sustainable offerings to our customers. For example, our connected lighting systems can improve energy efficiency up to 80 per cent. No other industry can do that. It therefore was logical to take the second step, making our operations more sustainable. In 2016, we reduced our carbon footprint by 39 per cent to 406 kilotonnes, bringing us much closer to our goal of becoming carbon neutral in 2020.

Together these are cornerstones of our purpose to unlock the extraordinary potential of light through our `Brighter Lives, Better World’ program, which sets ambitious targets on sustainable revenues and operations leading up to 2020. We are proving on a daily basis that the private sector can shape and lead the market for a low-carbon future,” said Eric Rondolat, CEO of Philips Lighting.

Anders Runevad

Chief Executive Officer, Vestas Wind Systems

GICS Industry: Electrical Equipment

To Vestas, the private sector’s role is to ensure that sustainable energy at all times is the obvious choice to satisfy energy demand. The technological progress within the area has been remarkable and onshore wind energy is today often the cheapest energy source available. As products, services and solutions continue to drive energy cost down, the private sector needs to work with policy makers and regulators to ensure energy systems are fit for high penetration of renewables, meaning meeting demand even where the wind is not blowing or the sun is not shining.

The technology of today can with a little help from the technology of tomorrow create a low carbon future – let’s make sure that the power markets are ready.

Jean-Pascal Tricoire

Chairman & Chief Executive Officer, Schneider Electric

GICS Industry: Electrical Equipment

Regarding climate, I am neither optimistic nor pessimistic, I am activist. Climate needs business solutions. By 2040, cities will host 70% of the world population. In the past 20 years, the Internet has connected 3.5 billion people together while, by 2020, it will connect 30 billion devices. Solar and storage systems will account for 70 per cent of new capacity addition by 2040 for rural areas, and 57 per cent of consumers are considering becoming energy self-sufficient, which will lead to the need for more microgrids. At Schneider Electric, we co-create the future for a new energy world. One that is more electric, digital, decarbonized, and decentralized, and we strive to meet the energy challenge — keeping global average temperatures below 2°C increase. We are a pure player in energy transition technologies and our mission is to make sure that Life is On for everyone, everywhere and at every moment.

Frans van Houten

Chief Executive Officer, Royal Philips

GICS Industry: Industrial Conglomerates

We can see the effects of climate change across the world, and we owe it to our children to do something about it. I am therefore proud that last year, Philips launched its new multi-year sustainability program ‘Healthy people, sustainable planet’ which includes Philips’ commitment to achieve carbon neutrality for its global operations by 2020. The five-year program builds on our ambitious mission to improve the lives of three billion people a year in 2025 by making the world healthier and more sustainable through innovation.

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