Companies that are leading the transition to clean energy also outperform those further behind, according to a report released Thursday by shareholder advocacy groups As You Sow and Corporate Knights.
The Carbon Clean 200 2023 report lists 200 publicly traded companies worldwide that are considered leaders among global peers in the clean energy transition.
This year's companies contributing the most came primarily from China, the U.S., South Korea and Sweden and were involved in clean energy solutions that included electric vehicles, organic foods, energy conservation and renewable energy. U.S. companies averaged the highest sustainable revenue at $23 billion, followed by Germany at $18 billion and South Korea at $17 billion.
The information technology sector accounted for nearly a quarter of the total sustainable revenue at $586 billion, followed by the communications services sector ($542 billion) and the industrials sector ($400 billion). Regarding sustainable investments, the utilities and industrials sector led with $50 billion each, followed by the communications services sector at $24 billion.
Since the inception of the Carbon Clean 200 list on July 1, 2016, to Jan. 31, 2023, the companies on it generated a total return of 91.2%, compared to 87.8% for the MSCI ACWI broad market index and 61.3% for the MSCI ACWI/Energy Index of fossil fuel companies, the Clean 200 report said.
Andrew Behar, CEO of As You Sow and report co-author, said the list was created in 2016 in response to concerns over investment choices after divestment. "The Clean200 has demonstrated consistently that what we called the 'clean energy' future seven years ago is now the clean energy present. This year, the scale and global diversity of leading companies continue to expand and redefine the term cleantech to be any company that has products and services that will reduce demand for fossil fuels and water," he said in a release.
The Clean200 uses Corporate Knights' Sustainable Revenue database that tracks the percent of revenue companies earn from sustainable economy themes.
On Tuesday, one of Europe's key tools for fighting climate change, the Emissions Trading System, saw the price of carbon reach a new high, hitting 101 euros per metric ton of CO2. The cap-and-trade system covers emissions from power plants, energy-intensive industries and commercial aviation. Crossing the 100 euro threshold is considered a strong impetus for more clean technology investments.
Edward Baker, head of climate policy at the Principles for Responsible Investment in London thinks that high carbon prices are likely to continue, "and low / zero carbon technologies will become more economically attractive to companies and investors," he said in an email. "There has, so far, been striking politically durability to the ETS' carbon price at a time of heightened energy policy sensitivity."
