At Stewart Investors, we believe in putting people first. Our investment world-view is of a series of partnerships – with each other, with our clients, with the companies we invest in, the people who buy their goods and services, and with the wider society in which we all live and work.
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Xcel Energy
Case study
Xcel Energy is a US-listed regulated utility serving 3.5 million electric and 2 million gas customers in eight Midwestern and Western states, primarily Colorado and Minnesota. We invested in the company due to its combination of strong environmental credentials, and an attractive 5-7% earnings per share growth.
This growth is being driven by its investment in decarbonising its power generation assets through measures including: replacing coal with wind; grid advancement; smart meters; transmission; and electric vehicle infrastructure.
Colorado and Minnesota are at the forefront of addressing climate change with adaptive policies promoting cleaner energy generation and electric vehicle infrastructure. In March 2019, Minnesota announced a new set of policy proposals that would require the state’s electric utilities to generate power using 100% carbon-free resources by 2050. Colorado has set statutory targets for the state to cut climate pollution by at least 90% by 2050 (relative to 2005 levels).
These polices have enabled Xcel Energy to significantly grow its wind portfolio, with plans to add 4,700 megawatts of wind capacity to their system – enough to power approximately 2.3 million homes per year. Its significant investment in renewable energy with limited, if any, impact to customer bills aligns Xcel Energy with the SDG 7 (Affordable and Clean Energy: ensure access to affordable, reliable, sustainable and modern energy for all).
The company is tracking ahead of its home states’ climate policies, and is aligned with the UNFCCC Paris agreement to limit global temperatures rise this century to ‘well below 2 degrees Celsius above pre-industrial levels’.
By allocating capital to companies like Xcel Energy, we are working towards achieving SDG Target 7.2, to substantially increase the share of renewable energy in the global energy mix by 2030.
All company information referenced has come from the Company Report unless otherwise stated.
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