Are renewable energy (green) companies outperforming non-green companies?

Beyond the popular notion that companies are going ' green' due largely to pressures from environmental groups and in order to meet regulatory requirements, this research project examines ' what is in it' for the green companies. Are green companies actually worse off than their non-green peers considering the traditional or conventional belief that the additional costs involved with being environmentally compliant, negatively impacts the bottom line? Our research's focus is on whether or not renewable energy companies have been out-performing non-green companies. Thus far, published works have shown conflicting results on the financial performance of investments that have set environmental compliance as their major criteria. While some have been able to prove that it pays to be green, others have reported that green investors are worse off. Unlike previous studies that examined green performance at the portfolio or aggregate level with mutual funds, our study examines performance at the firm level. We examined companies in the alternative energy sector and created a match for them with non-green companies and found that their operational and stock performance were not any worse off, but they also outperformed their traditional energy peers. In terms of raising finance, our findings further revealed that the green companies were better able to raise capital via equity. Thus we are of the opinion that investment in the renewable energy sector is a worthwhile venture. --P. ii.