Clean Power Fans Beat Fossil Fuels On MSCI ACWI Energy Index

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Clean power pays off, according to the new Clean200 list compiled by the activist shareholder organization As You Sow. The 200 companies on the list have collectively outperformed fossil energy firms by 39% since 2016, as measured by the leading global equity index administered Morgan Stanley Capital International. So much for the argument that divesting from fossil fuels is bad for business.

Clean Power Pays Off

The new Clean200 list is the 11th such list compiled by As You Sow, which has been tracking corporate clean power activities since 2016.

To be clear, a thumbs-up from As You Sow doesn’t necessarily mean that a company is net zero or carbon neutral here and now, but it does demonstrate that investors have plenty of opportunities put their money to work on the energy transition, instead of throwing more dollars at the fossil energy economy.

“The Clean200 has consistently demonstrated that what we called the ‘clean energy’ future eight years ago is now the clean energy present,” explained As You Sow CEO Andrew Behar in a press statement.

“This year, the scale and global diversity of leading companies continue to expand and redefine the term ‘cleantech’ to be any company with products and services that will reduce demand for fossil fuels and water,” he added.

Clean Power By The Numbers

The Clean200 list is a project of As You Sow in partnership with the sustainable economy news and research organization Corporate Knights.

The companies on the list are ranked by Purchasing Power Parity (aka the International Dollar), described as “the rate at which the currency of one country is converted into that of another country to buy the same amount of goods and services in each country.” The rankings also include a secondary measure indicating the percentage of a company’s revenue classified as sustainable.

The aim is to indicate where a corporation stands in terms of influence over the global economy and its role in the energy transition. It’s no surprise to see familiar names on the CleanTechnica radar among all of the Top 10 PPP performers.

Going by PPP, Apple tops the Clean200 list by a wide margin, though its sustainable revenue only registered 70%.

Others fared better on sustainable revenue. Amperex (the former parent company of the CATL battery firm) came in a distant second for PPP but reached the 100% mark for sustainable revenue. Third-place PPP holder Tesla also earned a 100% mark for sustainable revenue.

The seven other Top 10 companies are also familiar names on the CleanTechnica radar. In order of PPP they are: the semiconductor firm TSMC, HP, Microsoft, Schneider Electric, Nucor, Ibderola, and LG Energy.

According to the analysis from As You Sow and Corporate Knights, the 200 companies on the Clean200 list have collectively overperformed the Morgan Stanley ACWI (All Country World Index) for energy.

“These companies generated almost double the returns of the main fossil fuel index from July 1, 2016, to January 15, 2024, despite geopolitical tensions that have favored fossil fuel stocks in the past two years,” As You Sow notes.

“$10,000 invested in the Clean200 on July 1, 2016, would have grown to $20,346 by Jan. 15, 2024, versus $16,453 for the MSCI ACWI/Energy benchmark for fossil fuel companies,” As You Sow adds.

The Clean200 list also adheres to general principles of ESG (environment, social, governance) investing. It excludes companies that may have a reasonably good track record on clean power but are disqualified on account of other factors. In addition to excluding the fossil fuel industry, As You Sow notes that companies involved in deforestation, prison labor, weapons, and tobacco are also off the list.

As You Sow also notes that the Clean200 collectively under-performed the broader MSCI ACWI index, which tracks almost 3,000 companies in 23 developed countries and 24 emerging markets. That’s possibly due to the exclusions. CleanTechnica is reaching out to As You Sow for more insights on that.

In the meantime, though, the main point is that investors can divest from fossil fuels without punching themselves in the face, financially speaking.

How Green Is Green Steel?

For those of you wondering how the US company Nucor managed to make the Clean200 Top 10, that’s a good question. As a steelmaker and the only representative of a heavy industry in the Top 10, Nucor sticks out like a sore thumb. All the others are in the tech sector or are firmly cemented to the energy transition, such as Tesla, Schneider, and Ibderola.

Steelmaking has been considered one of the hardest-to-decarbonize industries, but Nucor can wield considerable influence over the energy transition due to its status as the biggest steelmaker in the US. On January 30, CNBC profiled the company and noted that Nucor makes one in every four tons of steel produced in the US, among other activities.

“Nucor has made more money in the past three years than it has in the last 20 combined, owing in part to the company’s business in a variety of sectors,” observed CNBC reporter Julie Coleman.

CleanTechnica first took notice of Nucor’s clean power journey back in 2019, when the company tapped Missouri to host a new steel recycling plant. The decision was based partly on access to competitively priced wind power. A $10 million grant from the US Department of Transportation for a new rail connection also helped to seal the deal.

Last year, Nucor surfaced again when it fired up a new plant in Brandenburg, Kentucky. The facility combines recycled steel with electric-arc furnaces for a reduced carbon footprint.

“Nucor claims that the greenhouse gas intensity of its steel is 1/5 the average for conventional steel making from raw materials in blast furnaces,” CleanTechnica observed.

“Additionally, Nucor notes that it is seeking LEED v4 certification from the US Green Building Council for the Brandenberg facility, an industry first,” we added.

Science-Based Targets For The Green Steelmaker Of The Future

Though the Brandenburg plant itself does not run on clean power — yet — it does help push the clean power envelope. Its signature product is Nucor’s new Elcyon™ steel, tailored specifically for use by the US offshore wind industry.

In terms of long term planning, Nucor also supports the greenhouse gas intensity targets outlined in the “Steel Climate Standard” adopted by the Global Steel Climate Council, in alignment with other goals including the 2015 Paris agreement on climate change.

In 2021 Nucor announced net-zero goals covering Scope 1 and 2, which include emissions from its own facilities as well as emissions related to the energy it procures. In November 2023 Nucor announced new goals, including Scope 3, which addresses emissions that are related to, though not directly caused by, a business or organization.

“Nucor’s net-zero 2050 and interim 2030 targets include scopes 1, 2, and 3 emissions from the production of hot rolled steel as defined by the GSCC, making Nucor the first diversified steelmaker in the U.S. to set GHG reduction targets encompassing all three scopes,” Nucor explained.

In addition to adopting more clean power, Nucor’s decarbonization strategy includes using less natural gas. That’s an interesting twist. Much of the attention around green steel has centered on pushing coal out of the process, but it looks like natural gas is the next domino to fall.

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Image: The activist shareholder organization As You Sow compares the financial track record of its Clean200 companies with fossil energy performance (courtesy of As You Sow).