Top Companies Investing in a Clean Energy Future
(3BL Media/Justmeans) – According to John Doerr, a major venture capitalist at Kleiner-Perkins in Silicon Valley, investing in the transition from a high-carbon to a low-carbon economy represents “the largest economic opportunity of the 21st century.” Many mission-driven investors and companies are gearing up to profit from and add momentum to this great energy transition.
To highlight the businesses that are investing in a clean energy future, Corporate Knights and As You Sow have created the Carbon Clean 200 (Clean200) – a list of the 200 largest companies worldwide ranked by their total clean energy revenues. These companies have recognized the potential of the global energy transition as people vote with their investment dollars in favor of clean energy over dirty.
For instance, coal industry, which accounts for over 40 percent of global GHG emissions, is rapidly declining in value. Peabody Energy, the world’s largest private sector coal company filed for Chapter 11 bankruptcy protection earlier this year. The Dow Jones Coal Index dropped 93 percent over the past five years. Fifty-two oil companies have filed for bankruptcy since 2015, and over a third of the world’s biggest oil and gas companies have a crushing debt load of over $150 billion, according to the Deloitte Center for Energy Solutions and a recent study by As You Sow.
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). Wind’s market share of power generation has doubled four times in the past 15 years, and solar has doubled seven times. Companies which make a significant amount of their revenue from environmental solutions now make up five percent of global investment indices. The Clean200 companies have a collective value over $1 trillion.
In the next 10 years, McKinsey expects oil demand growth to flatten due to growing fuel efficiencies and competitive technologies such as the electric car. Battery prices fell 35 percent last year, and electric car sales rose by 60 percent. By 2022, BNEF estimates electric vehicles will cost the same as their internal combustion counterparts.
Some of the leading investors are already adapting to this rapidly shifting energy paradigm. PFZW, the $183 billion Dutch pension fund, has pledged to halve its carbon footprint by 2020 while increasing its investments in climate solutions four-fold. CalSTRS recently committed $2.5 billion to a Low-Carbon Index to align its portfolio with the market realities emerging from climate change.
ABP introduced an internal carbon budget for its asset managers in 2015, designed to reduce the carbon footprint of its portfolio equity holdings by 25 percent over the next five years. AXA divested from all coal holdings in 2015 and committed to triple its green investments by 2020.
Leading companies that made the Clean200 list include Toyota, Siemens, Johnson Controls, Schneider Electric, Panasonic, Emerson Electric, Philips, ABB, Eaton Corp, Sharp, Bombardier, Tesla Motors, First Solar, Acuity Brands, Nordex, Owens Corning, Applied Material, Republic SVCS, Sumitomo, Itron, Borgwarner, Quanta, Covanta Holding, Cree, Sunpower, Emcor Group, Smith (A.O.), Hitachi, Andersons, Regal Beloit, Comfort Systems, Timken, Nextera, Woodward, Hexcel, Solarcity, and Tetra Tech.
Source: Corporate Knights
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