Of the top carbon-clean companies in a new report, Taiwan Semiconductor Manufacturing Co. Ltd. ranks first while four U.S. firms—Alphabet Inc., HP Inc., Cisco Systems Inc., and Tesla Inc.—rate in the top 10.

The report, "Carbon Clean 200," ranks publicly traded companies that are leading the way on clean energy issues in the first quarter of 2020. One of its key takeaways is that the cleanest 200 corporations have financially outperformed the largest oil, gas, and coal companies over the past three years. In fact, the Clean 200 has outperformed the MSCI ACWI Global Energy Index by a factor of four—29.6 percent to 6.7 percent—since the first Clean 200 report was published in July 2016.

The "Carbon Clean 200" report was prepared by As You Sow, a nonprofit group advocating corporate accountability on environmental and other issues, and by Corporate Knights, a Toronto-based for-profit media and research company that focuses "clean capitalism."

Toby Heaps, CEO of Corporate Knights and co-author of the report, spoke during a webcast introducing the report last week, saying: "Investors are starting to really wake up to this new narrative—that the fossil fuel industry growth story is coming to an end. Big money is waking up to this and investing in green investments. Smart money is now going big on clean energy."

Andrew Behar, CEO of As You Sow and co-author of the report, said, "In 2016, people were saying, 'If we divest fossil fuels, there is nothing to invest in.' We created the Clean 200 to show investors around the world" that there are profitable investments to be made for a clean energy future.

Heaps added, "Given that oil prices rose by 30 percent in the past year, it is surprising that oil company stocks have performed so poorly," suggesting that investors are breaking up with fossil fuels.

The Clean 200 consists of companies that have more than US$1 billion in revenue, with more than 10 percent of that revenue coming from clean energy sources. However, Heaps said, 59 companies that meet these two criteria have nevertheless been excluded from the list due to their performance in other areas such as social responsibility, corporate governance, and sustainable sourcing.

Companies were dropped from the list if they paid fines, penalties, or settlements in excess of 1 percent of their revenue; if they were found to have human rights violations; or if they used forced child labor in their supply chain. Some companies were excluded just based on the products they make or sell: tobacco, weapons, natural gas, or nuclear energy, for instance. Neither natural gas nor nuclear energy is considered "clean" energy, explained Wendy Shen-Juarez, research manager of Corporate Knights.

Europe has 69 companies on the Clean 200 list, followed by the U.S. with 39, Japan with 28, and China with 27. In addition to the Taiwanese and U.S. companies in the top 10, the report ranks Siemens AG of Germany third, Toyota Motor Corp. of Japan fourth, Iberdrola SA of Spain sixth, Schneider Electric of France ninth, and Unilever of the U.K. and The Netherlands tenth.

The largest industry sector for companies on the list is the industrial sector, which encompasses 79 of the Clean 200, followed by 44 in information technology and 26 in materials, a category that includes recycled metals and paper.

Shen-Juarez said her company developed the clean revenue metric three years ago as a synthesis of revenue, best practices, and several other sources. Where possible, the researchers consult with the companies themselves, she added.

The report concludes, "The fundamental story is that the 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 [Thunberg, climate advocate] to Pope Francis; from Extinction Rebellion to The European Central Bank."

From: CorporateCounsel

Instant Insights /

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