Citigroup names 74 likely climate winners

New York, 1 February: Banking giant Citigroup has named 74 companies in 21 industries and 18 countries that stand to benefit from efforts to tackle climate change.

Citigroup Investment Research worked with the Washington, DC-based World Resources Institute (WRI) to compile its second report on the issue. Last year, Citigroup argued that climate change is not just a problem, but an opportunity, and named a dozen companies that stand to profit from the issue.

On 26 January, it released Climate Consequences, which expresses more certainty about the likelihood of regulation in the US and identifies more possible investments.

Natural gas companies are set to benefit, since many power generators will choose gas over coal to meet greenhouse gas (GHG) caps. Citigroup also favours utilities that emit relatively little GHGs and industrial firms and car manufacturers that change their processes or products in response to climate change. Renewable energy companies are on the list, as well as biofuels firms and their suppliers.

Among companies it names are:
Constellation Energy, EDF, Entergy, Exelon and Fortum – all utilities with big nuclear portfolios;
FPL and Iberdrola – utilities with extensive wind energy capacity;
DuPont, and Monsanto – which are producing seeds and chemicals for biofuels;
Agriculture firms Archer Daniels Midland and Noble Group;
Biofuels firm CropEnergies;
Sugar and ethanol firms Cosan of Brazil and Bajaj Hindusthan of India;
Palm oil producers IOI Corp and IJM Plantations;
General Electric and Siemens – which supply clean coal and other clean power systems;
Natural gas groups Gaz de France, Gazprom and BG Group;
Renewable energy companies Gamesa, Sunpower, Suntech and Vestas Wind Systems;
Honda and Toyota among car manufacturers; and
Insurer Swiss Re.

It also cites firms with indirect roles, such as construction company Shaw Group, which installs pollution controls, as well as Potash Corp and Terra Corp, which provide nutrients for grain cultivation.

Citigroup notes that more investors are taking an "active" position on climate change, pressing firms to cut GHGs and position themselves to take advantage of new regulations and markets. It also predicts that corporate behaviour will change, as companies see opportunities for new products and services.