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Top 5 companies for small carbon footprint

As companies’ eco credentials come under increasing scrutiny, we look at five companies leading the way

A machine-learning analysis of the performance of 50,000 listed companies against the UN’s 17 Sustainable Development Goals (SDGs) has revealed the five that outrank the rest. Results, from London-based AI startup Util, pinpoint the amount of revenue that aligns positively with the SDGs, offering an objective view of each company’s environmental impact and responsibilities towards climate change

1. Tesla

With the largest total amount of revenue that positively aligns with United Nations’ sustainable development, electric car giant Tesla tops the list. After popularising and glamourising the idea of electric car ownership, the company has also branched out into domestic solar energy, with its stock value quadrupling this year.

According to Statista, it is the world’s leading producer of electric vehicles, tripling the number sold from 2017 to 2019, with its Model 3 the world’s best-selling plug-in model.

Yet as it pioneers the movement towards mainstream use of clean energy, Business in the Community (BITC) environment director Gudrun Cartwright highlights the need to phase renewable generation alongside the electrification of vehicles.

“In the UK, the National Grid suggests that if we electrified all vehicles then we would need an extra 10 per cent of electricity. Understanding how we can generate that in a carbon-neutral way is critical if we are to make the most of the benefits of electrification,” says Cartwright.

And as Util chief executive Patrick Wood Uribe points out, Tesla tops the list from an overall revenue perspective, not by percentage of total revenue. He acknowledges that it can be considered to have a more significant positive environmental impact than other businesses in the list with a larger percentage, but it’s down to the influence of scale on impact.

2. Vestas Wind Systems

With more than 117 gigawatts (GW) of wind turbines in 81 countries, nearly 20 per cent of the world’s 650GW of installed wind capacity, Vestas claims to have installed more wind power than any other provider.

Not only does it consider “spearheading the renewable energy transition” as central to its positioning, a key goal is to become “the safest, most inclusive and socially responsible workplace in the energy industry”. This includes its human rights due diligence framework, which it claims is unique to the renewables industry, requiring all projects to hold a social licence to operate that can be revoked at any point.

This is crucial work to become a holistically responsible business, says BITC’s Cartwright, because one product doesn’t necessarily indicate a socially good company. “Clean energy companies are not excused from tackling these issues just because of their work elsewhere,” she says.

3. Siemens Gamesa Renewable Energy

Like Vestas, Siemens Gamesa is a big player in the wind turbine business, present in 90 countries. Most recently and notably it has helped ease power shortages in Pakistan by rolling out eight wind farms in one year, alongside launching its Forests of Siemens Gamesa initiative to plant 50,000 trees to extract more than one million kilograms of CO2 from the atmosphere. The initiative forms part of the company’s new social commitment strategy to reduce poverty and promote STEM (science, technology, engineering and maths) education, while improving the environment.

Indeed, as BITC’s Cartwright says, the climate crisis must be tackled “in a way that creates opportunities for people, builds resilience for communities and restores the health of nature”, areas she believes renewable energy companies have a real opportunity to impact.

“Access to affordable, reliable energy is critical to tackling poverty, lack of social mobility or challenges to a good, stable education, particularly for women and girls,” says Cartwright. 

4. RusHydro (Federal Hydro Generating Co)

RusHydro is the leading producer of renewable energy in Russia, with the country’s government recently boosting its stake as primary shareholder from 60.56 to 61.73 per cent. Its main goal is to be the dominant provider of hydroelectricity in the Far East and its 2025 strategy establishes the company’s responsibility to support the socio-economic development of these regions.

This is an important balance to overcome the sometimes negative side of hyrdroelectricity development, says Dr Alejandro Gallego Schmid, lecturer in circular economy and life-cycle sustainability assessment at the Tyndall Centre for Climate Change Research, University of Manchester.

“Hydropower is normally quite good from an environmental perspective, but there have been a lot of socio-economic difficulties associated with it. There are some calculations that it has caused the displacement of communities of between 40 and 80 million of people and there has been biodiversity loss,” he notes.

But with shareholders having a sizeable influence on company direction and decisions, could RusHydro’s ownership be an area of concern, despite the anti-corruption policy it outlines on its website?

“Companies do what their shareholders want,” says Gallego Schmid. “We have started to see more NGOs partnering with clean energy companies to influence them, so governments need to be particularly sensitive. While providing clean and safe energy, they have to protect people’s rights too.”

5. Verbund

Operating 131 hydropower plants in Austria and Germany, Verbund has also partnered with steelmakers voestalpine and Siemens to run the world’s largest pilot plant for carbon-neutral production of hydrogen to be used in steel production.

The pilot will show whether the technology can be used to replace fossil fuels on an industrial scale, according to Reuters, which reports that the company, 51 per cent owned by the Austria government, is pushing for greater European Union sector regulation to justify a €5-billion investment in carbon-emission lowering projects.

This is where consumer spending power comes into play, says the University of Manchester’s Gallego Schmid. “Sadly, policy changes are normally reactive, as policymakers are often reluctant to change the status quo if there’s no demand from citizens. As consumers, we have a really important role to pressure policymakers to change things,” he says.

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