Report: Clean energy stocks no longer outpacing fossil fuel investments
Clean energy investments by 200 of the world's leading corporations have underperformed compared to fossil fuel energy stocks over the past year and a half, new figures have revealed.
An update to the Carbon Clean200, which ranks companies based on their revenues from renewable energy, reveals that the revenue of the companies listed in the index has risen by 16.5% since 2016.
The figure stands in contrast to the 23.5% recorded for the Clean200’s fossil fuel benchmark, the S&P 1200 Global Energy Index, marking only the second time since 2016 that the Clean200 benchmark has fallen behind its fossil fuel counterpart.
Clean200 index authors from green media research firm Corporate Knights and non-profit As You Sow attribute this trend to the escalating trade war between the US and China, which has contributed to an 18% drop in the Shanghai Stock Exchange Composite Index since the start of 2018.
These repercussions have been compounded by the Chinese Government’s recent move to axe solar subsidies, which has caused solar industry stock prices to fall even further, the update states.
This may paint a bleak picture for clean energy investments, particularly in China, where a quarter of the group’s members are based, but Corporate Knights’ chief executive Toby Heaps said that the Clean200 had “held up well” against the “triple-whammy” of the US-China trade war, surging oil prices and the closure of Chinese solar subsidies.
Indeed, when Chinese corporates are removed from the list – in order to control for this so-called “China-effect” - the Clean200 continued to outperform fossil fuels, generating a 35.2% return over the past two years compared to the 23.5% figure.
As You Sow’s chief executive Andrew Behar said that the global transition to renewable power would “continue regardless” of current challenges as corporates seek to “avoid climate catastrophe”.
The global picture
The top three companies on the Clean200 list are German manufacturer Siemens, car giant Toyota, and automation company Schneider Electric, the latter of which recently signed up to the Climate Group's RE100 initiative to source renewable energy and the EP100 initiative to double energy productivity by 2030. Collectively, these three corporates have a combined clean energy revenue of more than $100bn, the index notes.
On a global scale, China leads the way with 52 companies on the list, followed by the US (34) and Japan (19). SSE, Delphi, Analytica and Dialog Semiconductor make up the four UK businesses on the Clean200.
In order to be eligible, a company has to have a least $1bn in market capital and at least 10% of its revenues deriving from clean energy as defined by Bloomberg New Energy Finance (Bloomberg NEF).