Willdan Group (WLDN)

Company website 2020 Financial Report Stock Analysis 2020 ESG Report

280000

Energy-Saving Projects

were delivered by Willdan Group as of 2020

5.4

Million Metric Tons

of CO2 avoided through Willdan's products and services

Utilities

Willdan has worked closely with 90+ utilities in the past 30 years

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The Path to Drawdown: Grid Expansion

Addressing climate change and staying below 1.5ºC of global temperature rise requires a massive scaling of emissions-free energy sources. Thankfully, renewable sources like solar and wind are quickly expanding their capacity worldwide. But to provide reliable clean energy to every household and organization in the world, we need a power grid that’s much bigger and more flexible.

The power grid is the dynamic network of electricity generation, transmission, storage, and consumption that 85% of the world relies on. But today’s power grid, initially designed for constant, centralized power production, is not conducive to the intermittency of solar and wind power. For the world’s electricity supply to become completely renewable, the power grid needs to become more adaptable. Many technologies -- constant renewables like geothermal and nuclear, utility-scale energy storage systems, batteries, and smart appliances -- contribute to grid flexibility.

The power grid also needs to expand to support a renewable transition. Where the grid spans more geographic areas and more electricity sources, it can even out the total output and variability of renewables. Electricity generated in Texas in the summer can then be used to power houses in snowy Chicago during the winter. To achieve this scale, the IEA estimates that, between 2020 and 2030, around 16 million km of distribution and transmission lines need to be built, an increase of 80% compared with the past decade.

About

Willdan Group (WLDN) is an energy solutions provider, engineering firm, and sustainability consultant. Their customer base includes public and private utilities, government agencies, and commercial and industrial firms. Headquartered in Anaheim, California, they specialize in energy engineering, renewable generation, electric vehicle infrastructure, and microgrids.

WLDN's Role in Drawdown

Willdan’s energy efficiency service comprises well over 80% of its total contract revenue since 2018. And this figure has grown by 5.42% annually since 2016. Among their clients, their work with utilities companies accounts for 59.9% of total revenue.

Willdan’s work with utility companies involves delivering energy efficiency, load capacity procurement, new construction, and demand response programs, as well as implementing power systems that include distributed energy resources and renewables. Especially notable is their full product cycle service (p. 4) in helping utilities integrate new distributed energy resources, like solar, wind, battery, and energy efficiency solutions.

WLDN: What We Like

Willdan has been very successful in growing their energy efficiency business over the past few years, providing a crucial Drawdown solution of expanding and adapting the power grid to a zero-emission energy system.

<::marker> Their energy efficiency segment has grown by 18.1% annually between 2016 and 2020
<::marker> Their energy projects have helped save 6,800 GWh (p. 5) since their founding, equivalent to removing 1 million cars from the road

We also want to positively call out Willdan for publishing their inaugural Sustainability Report in 2020. This allows climate-conscious investors and potential investors to clearly assess Willdan’s directions, goals, and track and to hold them accountable.

What We Want to See Improve

Track GHG Emissions

For a company for whom climate change mitigation is their core identity (p. 5), Willdan doesn’t provide emissions metrics. We acknowledge that they plan to adopt (p. 5) additional internal practices in 2021 that will reinforce their environmental commitment. We urge them to include GHG emissions metrics (scope 1, 2 and 3) as part of this effort so that investors can transparently evaluate their climate impact.

Set More Ambitious Targets

The most concrete sustainability goals that Willdan sets out are to recycle 100% of e-waste, 100% office participation in reuse and recycling programs, and to reduce real estate carbon footprint as lease terms expire. From the perspective of climate change mitigation, these are modest goals, and we believe Willdan can do better. We would like to see concrete and ambitious goals to reduce and then reach absolute zero GHG emissions in a specifically-stated near future.

Clean Up the Fleet

As a large energy solutions provider, Wildan has a large fleet that runs on fossil fuels. One effective way to reduce their carbon footprint would be to completely electrify their fleet or to switch to green hydrogen and become independent of gasoline, diesel or natural gas.

Related Electrical Infrastructure Stocks in the Climate Index

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Allocated	Company	Description
4.34%	ABB Ltd (ABB)	ABB offers EV charging, solar and modular substations, distribution automation to expand the power grid. A larger grid can integrate more renewables
4.19%	Eaton Corporation plc (ETN)	Eaton offers electrical components, industrial components, power distribution for the electrical grid. Grid expansion is key for integrating renewables
1.08%	Quanta Services, Inc. (PWR)	Quanta offers engineering, construction and repair of electric grid infrastructure. Expanding the power grid is necessary for integrating more renewables
0.42%	MasTec, Inc. (MTZ)	MasTec builds the infrastructure that connects the US power generation to consumers. Expanding the grid is critical for integrating more renewables
0.42%	WESCO International, Inc. (WCC)	WESCO helps the power grid expand and adapt to a growing integration of clean energy. A key Drawdown solution for a more resilient and green grid
0.31%	Sunnova (NOVA)	Sunnova provides residential solar and energy storage systems in the United States. Both are critical for electrifying the energy system
0.17%	SPX Corporation (SPXC)	SPC makes transformers and cooling equipment for power generation and transmission - expanding the grid helps to integrate more renewable energy
0.03%	Willdan Group (WLDN)	Willdan helps utilities with new construction, improve efficiency, and demand response - all valuable in expanding and making the grid more resilient