Chinese corporations are setting the pace when it comes to generating income from renewable energy sources, surpassing their counterparts in the United States and Europe. Data from BloombergNEF (BNEF) reveals that companies in the S&P 500 derive just 3.4 percent of their revenue from clean energy, which is approximately half of what firms listed on the Shanghai Composite Index earn.
Prominent Chinese companies like Longi Green Energy Technology and Tongwei are reaping the benefits of China’s dominant position in the clean energy supply chain. The Asia-Pacific region, in particular, offers the most substantial opportunities for clean energy equity investments, as per BNEF’s analysis.
This region boasts over 680 companies generating more than half of their revenue from clean energy, encompassing renewables, nuclear power, electrified transport, biofuels, hydrogen, and carbon capture. In comparison, the United States has approximately 410 such companies, while Europe, the Middle East, and Africa combined account for roughly 430.
Transitioning towards greener business models holds immense financial potential beyond environmental benefits, notes Michael Daly from BNEF. However, uncovering clean energy exposures can be challenging due to the lack of transparency in company reports. Many major oil and gas companies, for instance, do not break down clean-energy revenue separately. Some, including industry giants like ExxonMobil and Marathon Petroleum, provide no information whatsoever regarding earnings from clean energy activities.
Predictably, nearly all manufacturers and developers in the renewable energy sector generate the majority of their revenue from clean energy, earning them high ratings from BNEF. Leading companies include China’s Contemporary Amperex Technology and Denmark’s Vestas Wind Systems. In contrast, 45 percent of electric utilities assessed by BNEF receive A1 ratings.
Electricitie de France SA, for example, generated almost 70 percent of its revenue in the previous year from nuclear power, supplemented by income from hydro, wind, and solar sources. Italy’s Enel maintains a well-balanced portfolio of clean power generation revenue, ranking just below EDF and Sweden’s Vattenfall among the world’s largest utilities with the highest clean-energy exposure.
In the automotive sector, Tesla and BYD have established themselves as clear leaders, outperforming traditional carmakers like BMW and Ford, according to BNEF’s evaluation.