Unlike traditional energy sources that rely on fossil fuels, such as natural gas and oil, renewable energy comes from sources that do not deplete when used, such as wind or solar power. More importantly, these sources emit zero CO². If used to replace our current fossil energy sources, they contribute to our emission targets and thus help to keep climate change at bay.

On target

There are companies in our sustainable investment universe that perform well regarding renewable energy. They have renewable energy programs with clear quantitative targets and deadlines. As might be expected, renewable energy producers do well, for example EDP Renovaveis from Portugal. But it’s the less likely stars that capture our attention. Amongst them, Swedish apparel retailer Hennes & Mauritz (H&M), and Swiss pharmaceuticals and diagnostics company Roche Holdings, which also have low carbon emission intensity.

On trend

Several companies also demonstrate a strong carbon emissions reduction trend, amongst them Toyota Motor Corp. It’s encouraging to see an automobile manufacturer in this position because energy use is a material issue for this sector due to intense demand for energy during production. Moreover, even if Toyota is no Tesla, the company plays an important role in the development of hybrid and electric cars.

Engagement encourages change

Recently Royal DSM, a global science-based company, committed to 100% renewable energy. In April this year, at its’ annual general meeting of shareholders, Triodos again strongly suggested the company to strive for increased renewable energy use. Global emission targets can only be met if companies  also take action. A single company like DSM uses the equivalent amount of energy to that of three million households. We were therefore very pleased after several years of engagement on this topic with the company that in September, the company had joined RE100 and announced its commitment to sourcing 100% renewable energy.  It has an interim RE100 target to source 50% of its total electricity needs from renewables by 2025, increasing to 100% at the earliest subsequent opportunity. RE100 is an ambitious global initiative to engage, support and showcase companies committed to 100% renewable power. The initiative is led by the Climate Group in partnership with CDP .

Clean energy is on track to become the third largest industrial sector globally. There’s a lot of opportunity for renewable energy to play a bigger role in the fight against climate change. But for that to happen, investments in the relevant sectors and products need to dramatically increase. With the money entrusted to us by our clients, we will seek to foster this development as much as we can.

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.