And every ETF that tracks the Index will be doing the same going forward. But including both stocks in this index is essentially double counting one company. The Iberdrola family is a leading global investor in renewable energy. But while that’s a plausible reason for excluding one or the other, the same is true for Avangrid and Iberdrola, which are now both included. That’s despite that company’s ownership of fossil fuel generation, and being 82.3 percent owned by the apparently disqualified parent.įor all practical purposes, Enel Americas and Enel SpA shares are essentially two ways of owning the same company. Still, it’s hard to see how it made the grade when Enel was excluded, since both are European utilities with extremely similar operations and business plans.Įqually incongruous is the fact that the tracking stock for Enel’s South American operations outside Chile-Enel Americas SA (ENIA)-is still in the index. That makes sense, considering the company’s aggressive renewable energy project backlog. Interestingly, Iberdrola is one of the S&P Global Clean Energy Index’ ten largest holdings. And the company is basically the US unit of its 81.52 percent owner Iberdrola SA (IBE, IBDRY), which has plans to continue using fossil fuels until its target date of 2050 for being “carbon neutral.” And that company is still burning coal and plans to continue using gas until at least 2045.Īvangrid also operates natural gas distribution utilities in the Northeast US. And I’m definitely a fan of the business plan, which combines regulated energy transmission and distribution utilities with a growing portfolio of onshore wind, solar and most recently offshore wind projects.īut while Avangrid doesn’t currently operate any fossil fuel power plants, it’s on the verge of acquiring PNM PNM Resources. I’ve also tracked this company and its predecessors literally for decades. So by definition the long-term trend has been a steep decline in their carbon-to-revenue ratios.Ĭonversely, one of the companies picked to replace them is Avangrid AGR Inc. For one thing, Enel and NextEra have been rapidly winding down their fossil fuel generation and ramping up wind and solar for more than a decade.
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