In my personal life, friends and acquaintances are shocked to hear that my work in sustainable investment involves uncovering unethical behaviour of companies, held within funds managed by financial professionals often all too keen to justify this behaviour.
Some corruption here, labour injustices there, and an unhealthy sprinkling of human rights abuses – it’s all in a day’s work for the Key to the Future (KTTF) research team.
From Nike’s link to forced Uyghur labour in their Chinese supply chain, to Marsh & McClennan insuring a coal mine; from US healthcare corporations which neglect their patients in pursuit of profit, to an insulation firm which knowingly cladded buildings with flammable materials…
None of this is what the layperson would expect from sustainable funds.
But today I would like to briefly steer away from this and offer up a good news story: a short profile of three companies putting the wind into your portfolio. So, without further ado:
Vestas Wind Systems
When it comes to the sheer number of units installed, Vestas is the largest wind turbine manufacturer in the world. The company has designed, manufactured, installed and serviced wind turbines in 86 countries around the world for over 40 years.
Their website boldly claims that “Vestas is the energy industry’s global partner on sustainable energy solutions” – so it is no wonder that the company is held by five of the funds within the KTTF portfolio, more than any other in this article.
According to Vestas, the company’s 29,000 employees have been responsible for the instalment of over 151 gigawatts of wind turbines across the globe. That much energy is roughly equivalent to more than 196,300,000 horsepower – or enough to power 113.25 million homes.
To break that down into something more practical and understandable, Vestas wind turbines produce enough energy to power the equivalent of nearly 5% of homes across the entire planet (which was estimated in 2021 to be around 2.3 billion homes). That’s not bad at all for one company.
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Siemens Gamesa Renewable Energy
Depending on how you view ‘big tech’, Siemens may not necessarily be your first pick for a sustainable company, but its renewable energy subsidiary, Siemens Gamesa Renewable Energy (Gamesa) is worthy of praise.
Although not as large as Vestas, Gamesa is among the top five wind turbine manufacturers in the world in terms of output, and is held by two funds within the KTTF model investment portfolio.
Gamesa says that it has reached its “100GW ambition” – which means Gamesa wind turbines generate enough energy to power more than 75 million homes, the equivalent of just over 3% of global homes. The company operates in more than 90 countries.
In 2021, Gamesa appeared on the CDP’s (formerly Carbon Disclosure Project) climate change A List, the only Siemens-owned firm to make it onto the list of the “270+ companies […] leading the way to a net-zero, nature positive and equitable future.”
Additionally, Gamesa is a pioneer in the development and production of renewable wind turbine blades. In 2021, the firm launched the “world’s first recyclable wind turbine blade for commercial use offshore”.
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Nordex
The final mention on this list is an honourable mention. Nordex is a far smaller manufacturer of wind turbines than Vestas and Gamesa, but by no means insignificant. Turbines made by Nordex generate enough energy to power the equivalent of just over 1% of global homes.
The company “has installed wind power capacity of more than 32 GW in over 40 markets” and is held in just one fund in the KTTF model investment portfolio, iShares Global Clean Energy (the only fund to invest in all three of today’s profile companies).
Nordex made it onto this list due to data used in our internal research process which suggests the company is contributing significantly towards efforts to keep global temperature rises to well below 1.5ºC by the end of this century.
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Putting the wind into your portfolio
As wind and other renewable energy sources will come to be more heavily relied on in the near future, it is vital to invest in companies such as Nordex, Siemens Gamesa Renewable Energy, and Vestas.
We are always looking at ways to increase our exposure to wind power, most recently thanks to a tip off from a client, who sent us a press release about the ZEBRA Consortium’s development of a new type of renewable turbine blade.
Our managing director contacted the funds within the KTTF model investment portfolio to enquire about inclusion of the companies involved. He was told that a few companies are being looked at by some funds, and that Owens Corning has recently been taken on by one fund.
By our estimates, Nordex, Gamesa, and Vesta’s combined gigawatts of generated energy is equivalent to the power needed for roughly 9% of homes globally. I don’t mean to mislead anyone with that figure, but hopefully our clients can feel like their investments are contributing towards a positive change.
Due to the nature of our work, there is a tendency to mainly focus on the negatives. While this is done in the interests of delivering an ethical, sustainable portfolio for our clients, it can become draining. It’s important, no matter what you do in life, to take a step back every so often to think about the positives.
