5 Leading Companies in Climate Change

Like most investors, you probably aim for the best possible return when picking potential investments. But as consumers increasingly clamor for companies to embrace social responsibility, good corporate citizenship is becoming a vital part of many companies' success. And it can boost the performance of our portfolios, too.

CR magazine recently released its "100 Best Corporate Citizens" list for 2013, in which it rated members of the Russell 1000 large-cap index on 325 different elements related to responsible behavior. In the coming weeks, I'll delve into each of the seven categories that contribute to a company's overall score.

Today, we'll look at the climate change category, which gets a 16.5% weighting. Here are the top-rated companies:

United Parcel Service
(NYSE: UPS  )

Exelon (NYSE: EXC  )

PepsiCo (NYSE: PEP  )

IBM (NYSE: IBM  )

Spectra Energy (NYSE: SE  )

To earn their high scores, the companies above engaged in a variety of good practices, including, among many other things, disclosing carbon dioxide emissions, disclosing greenhouse gas emissions, and applying their climate-change policy standards to their suppliers and vendors.

Digging deeper
So what, exactly, are these companies doing right? Here are a few examples of their climate-change-related activities:

UPS has a "Corporate Climate Change Statement" (link opens PDF file), and reports on its progress annually in a company sustainability report. Its strategy includes optimizing its logistics to minimize miles flown or driven, conserving energy, and investing in fuel-saving technologies. It has also been highly ranked by the folks at ClimateCounts.org. Between 2008 and 2011, it reduced  its gallons of fuel consumed per ground package delivered from 0.127 to 0.116, an improvement of close to 9%.

Exelon is a major American electricity and gas company, and also our largest nuclear-power utility. Though its "Energy Reduction Challenge," the company aims "to reduce our own building purchased energy consumption by 25% and auxiliary power at our plants by 7% by 2012 [vs. 2001 baseline levels]." As an example of how profitable green-ifying a business can be, the company updated a 45-year-old lighting system at one plant and achieved 80% savings in annual energy costs.

PepsiCo's climate-change initiatives have helped it win the EPA's Energy Star "Sustained Excellence" Award for four years in a row. Between 2006 and 2010, it reduced its per-unit use of thermal energy in its food and beverage plants by 12% and electricity consumption by almost 8%. The company has many environmentally friendly initiatives under way, such as using low-carbon fertilizers on a trial basis in Florida to grow oranges for its Tropicana drinks. It also plans to try the fertilizer with potatoes.

IBM has also been recognized by the EPA, "for its ambitious emissions reduction goals, and for being at the leading edge of setting requirements for suppliers to measure, disclose and reduce their operational greenhouse gas emissions." The company has had energy policies in place since the 1970s, and between 1990 and 2011, it has "saved 5.8 billion kWh of electricity consumption, avoided 3.7 million metric tons of CO2 emissions (equal to 55% of the company's 1990 global CO2 emissions) and saved $442 million through its annual energy conservation actions."

Spectra Energy specializes in the transport and storage of natural gas, among other things. Its climate-change commitments and achievements include reducing its air emissions by 10% between 2007 and 2011, and between 2007 and 2010, it reduced its carbon-dioxide-equivalent emissions by 4.3 million metric tons. It's looking into the feasibility of a major carbon capture and storage project in British Columbia, which might capture and store 2 million tons of carbon dioxide, equivalent to removing 500,000 cars from the road each year.

Earning green while being green
Companies doing good can boost your portfolio's performance. And various other studies have suggested that socially responsible investments are at least competitive with the overall market, if not outperforming it on occasion. That's a solid motivation for even the most coolly rational investors to take social responsibility to heart. 

If you're in the market for solid socially responsible candidates for your portfolio, check out the real-money portfolio run by my colleague Alyce Lomax. Out of all the Fool portfolios in the group, hers was recently in first place.

Want to learn more about PepsiCo?
PepsiCo has quenched consumers' thirst for more than a century. But recently, the company has left shareholders craving more. With increased competition and loss of market share, many investors wonder if this global snack food and beverage giant is simply fizzling out. Are more bland results ahead for PepsiCo? The Motley Fool's premium report on the company guides you through everything you need to know about PepsiCo, including the key opportunities and threats facing the company's future. Simply click here now to claim your copy today.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 23, 2013, at 7:47 AM, mememine69 wrote:

    Get up to date and stop this needless panic.

    *Occupywallstreet does not even mention CO2 in its list of demands because of the bank-funded carbon trading stock markets ruled by corporations and trustworthy politicians.

    Science only agrees it “could” be not “will” be a crisis.

    Not one single IPCC warning isn’t swimming in “maybes” and not one single scientist anywhere has ever said a CO2 crisis is as inevitable or eventual like the same scientists like to say comet hits are, only “possibly” and “potentially” and “likely” and…. Deny that!

    A climate crisis is the worst emergency imaginable and needs certainty not “maybe”. And if you think a little tiny catastrophic crisis is even possible, nothing will change your mind doomer.

    If “maybe” is good enough for you to condemn your own children to your exaggerated greenhouse gas ovens……………you are no planet lover, you just hate humanity.

    28 years of “maybe” is 100% proof that CO2 “won’t” be a crisis.

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