Behind the Corporate Push for a Federal Standard for Clean Energy

More than 75 companies are currently lobbying lawmakers to enact a federal “clean energy standard” (CES), according to Axios

Companies such as Apple (AAPL), General Motors (GM), Unilever (UL), and Ebay (EBAY) have all joined forces to exert pressure on Congress to step up in creating a CES.

The open letter, sent to Capitol Hill, asks that lawmakers set a federal standard for clean energy, requiring power companies to supply zero-carbon electricity in drastically increased amounts. 

Zero-carbon power would allow for companies to operate at greatly reduced emission levels, aiding their efforts to curb carbon emissions. 

The letter said that “a federal clean electricity standard should achieve 80 percent carbon pollution-free electricity by 2030 on the pathway to 100% clean power by 2035,” according to Axios. 

The letter, and push, is backed by Ceres, a sustainable investment advocacy group, the Environmental Defense Fund, and other companies and institutions. 

Recent heat in the Pacific Northwest, attributed to global warming, has helped bring concerns of a warming planet to the forefront for many Americans, and Congress is taking notice. The Biden administration has signaled a push for a CES option to be included in the package being pushed by Democrats currently that includes energy, health, and childcare funding. 

“Millions of Americans are already feeling the impacts of climate change. From recent extreme weather to deadly wildfires and record-breaking hurricanes, the human and economic losses are profound,” the letter said.

Investing in ESG with SPDR

For investors looking to capture the shifting push toward ESG within the financial and economic spheres, there do exist ESG ETF options. 

For example, the SPDR S&P 500 ESG ETF (EFIV) tracks the S&P 500 ESG Index, an index that selects from top companies that meet ESG criteria within the S&P 500, while also adhering to the sector weights of the S&P 500 Index. 

EFIV utilizes S&P DJI ESG scores to rank companies based on their sustainability. This score is derived from analyzing a thousand data points covering a variety of topics collected from companies and then asking roughly 120 questions, according to the S&P website

EFIV excludes companies involved in tobacco, controversial weapons, those that derive 5% or greater of their revenues from thermal coal extraction or generate power from coal, or that score low in United Nations Global Compact standards.

The top three sector allocations of EFIV are 30.11% in information technology, 14.43% in consumer discretionary, and 12.98% in healthcare, as well as several other smaller allocations.

EFIV has an expense ratio of 0.10%, making it one of the cheapest ESG ETFs on the market.

For more news, information, and strategy, visit the ESG Channel.