Green Energy Stocks

Why It Matters

Clean electricity is critical for solving climate change.

Historically and still predominantly today, electricity is generated by burning fuels that were dug up from the ground - coal, natural gas, and oil. These energy-dense fuels that can make electricity constantly to meet demand at all times. But we now know that these fossil fuels are the primary cause of global warming and climate change. 

Utilities are large companies that, in many places, have a near-monopoly on providing cities with electricity. Because electricity generation is one of the largest sources of greenhouse gas emissions in all of the top emitting countries, utility companies are the key players that need to cut emissions if we are to curb climate change. To do this, utility companies need to fundamentally switch from generating electricity from fossil fuels to using renewable and clean sources of energy like solar, wind, hydropower, and nuclear. 

Green utilities are urgently needed.

Most utility companies have been reluctant to commit to a green transition. The challenge is the issue of what to do with existing fossil fuel generation plants that aren't easily convertible to generating renewable energy, especially at the end of their life. 

Regardless, utility companies need to increase renewable assets fast. The International Energy Agency estimates (p. 198) that the worldwide generation capacity of renewable energy needs to scale from ~3 gigawatts in 2020 to 26.6 gigawatts in 2050. That's almost a 9x increase in three decades!

Here are the companies that are helping this transition.

The green utility stocks below represent the list of companies that passed our strict scrutiny for renewable energy assets. A company needs to satisfy four criteria to be included in the Climate Index: 1. More than 50% of their electricity generation needs to come from clean sources; 2. If they own coal plants, they need to have a plan to close them within the next 3 years; 3. Their renewable investments need to exceed state and federal mandates; and 4. They need to have a track record of emissions reductions. And as always, we exclude penny stocks whose share prices were less than $0.50 in our last update.

If you are a Carbon Collective member, you own all of these companies through the Climate Index.