Clean earnings place Canadian companies among global top 200 for revenue from low-carbon business activities

Canadian suppliers lauded for clean earnings

Low-carbon business activities delivering favourable investment returns
Monday, February 22, 2021

Product and service suppliers to the property and facilities management sector are among eight Canadian companies on the newly released list of the 200 publicly traded companies earning the highest global revenues tied to clean economic enterprise in 2019. The annual rankings — jointly undertaken by the Canadian and U.S. research firms, Corporate Knights and As You Sow — also compare the investment performance of this Clean200 against MSCI’s world (ACWI) and world energy indices.

“While tech companies like Amazon and Zoom have had a good run through this pandemic period, the broad-based trend of outperformance has been dominated by companies providing sustainable solutions,” reports Toby Heaps, Corporate Knights chief executive officer.

From July 1, 2016 to January 31, 2021 the Clean200 have generated a 113.4 per cent total return, surpassing the ACWI’s 78.7 per cent total return. Meanwhile, fossil fuel companies in MSCI’s energy index experienced a 13.8 per cent drop in value during the same period. To illustrate, $10,000 invested in the Clean200 in July 2016 would now have grown to $21,340 whereas $10,000 invested in fossil fuel companies would have diminished to $8,617.

“There is now clear financial evidence showing a broad spectrum of companies and market forces making the economic transformation, which is our greatest hope in controlling climate change,” submits Andrew Behar, chief executive officer of As You Sow.

The Clean200 is drawn from approximately 8,080 publicly listed entities with annual earnings in excess of USD $1 billion. To qualify, companies must derive at least 10 per cent of their annual revenue from business activities aligned with a low-carbon economy. That includes: energy efficiency; green energy; electric vehicles; financing low-carbon ventures; low-carbon real estate footprints; environmentally responsible forestry, mining and resource management; low-carbon food and apparel production; and information and communications technology that supports such endeavours.

Some other types of listed companies are disqualified from consideration, including: oil, gas and other fossil fuel companies; utilities earning less than 50 per cent of revenue from green energy sources; companies with earnings tied to deforestation, climate change denial, weaponry or private prisons; and/or companies with track records of worker exploitation, racial and/or gender discrimination or criminal activity.

Collectively, the newly announced Clean200 generated about 39 per cent of revenue from clean economy earnings — placing three Canadian suppliers to the property and infrastructure sectors as above-average standouts:

  • Cascades Inc., a Quebec-based manufacturer and distributor of paper products and hygiene-related amenities, ranked 86th with CAD $5.2 billion (USD $3.9 billion) in clean earnings, representing more than 93 per cent of company revenue in 2019.
  • Canadian Solar Inc., a manufacturer and distributor of solar modules, inverters and energy storage systems headquartered in Guelph, Ontario, derived all CAD $4.2 billion (USD $3.2 billion) of its annual revenue from clean economy activity, placing 105th. It is also one of just 16 companies in the Clean200 with a racially diverse chief executive officer.
  • Brookfield Renewable Partners LP, headquartered in Toronto, literally generated 100 per cent of CAD $3.95 billion (USD $2.98 billion) in 2019 earnings from clean power. Ranked 194th, it is the only power generation company in the Clean200 list.

Railway operators, Canadian National and Canadian Pacific, are the highest ranked Canadian companies on the list at 35th and 62nd respectively. Both also surpass the Clean200 average quotient for clean economy revenue with CN’s 85 per cent share translating to CAD $12.88 billion (USD $9.7 billion) and CP’s 77.6 per cent stake equating to CAD $7.39 billion (USD 5.57 billion) in 2019.

Bombardier Inc., Telus Corp. and Hydro One Ltd. complete the Canadian contingent in the Clean200. Of these, Hydro One, ranked 175th, has the highest percentage of clean earnings at 30 per cent or CAD $2.16 billion (USD $1.63 billion), while Bombardier’s 26.3 per cent portion translates into the highest dollar amount at CAD $5.5 billion (USD $4.15 billion) earning it 80th position. Telus Corp. is slotted at 167th with about 14.4 per cent or CAD $2.33 billion (USD $1.76 billion) of 2019 income in clean earnings.

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