The ESG Scorecard: A Deep Dive into the Clean Energy Sector

Despite its promises, the clean energy sector, featuring companies like NextEra Energy, First Solar, and Siemens Energy, faces significant challenges across ESG fronts. Governance issues include lawsuits over misleading financial practices and greenwashing accusations. Environmentally, the sector struggles with defective technology and product performance failures, eroding trust in renewable energy solutions. Social and labor challenges are also prevalent, including discrimination lawsuits, unsafe working conditions, and customer dissatisfaction stemming from product failures and poor service. Furthermore, the growing threat of cybersecurity vulnerabilities within clean energy infrastructure poses risks to both operational systems and consumer data.

What are the most pressing ESG challenges currently facing the clean energy sector? Read on to find out.

NextEra Energy: ESG Challenges and Legal Disputes

NextEra Energy faces several ESG controversies despite being less exposed than its peers. Governance issues include a $1.2 billion impairment related to the Mountain Valley Pipeline and a $350 million antitrust lawsuit for allegedly obstructing a competitor’s clean energy project. It has also faced legal challenges, notably investigations into its political donations connected to its bid for Jacksonville’s public utility. Environmental concerns involve growing opposition to its solar and battery projects and lobbying against rooftop solar policies, along with protests over its wind and drilling operations in Florida, which are subject to a class-action lawsuit for environmental risks. Additionally, the company is investigating wind turbine collapses and is engaged in legal disputes regarding employee rights, including a retaliation lawsuit and a $500,000 settlement over debt collection practices.

Key Controversies:

• • • NextEra takes $1.2bn charge as pipeline project comes under pressure
    • NextEra Energy Faces Antitrust Lawsuit Over Alleged Efforts to Block Competitor’s Project
    • NextEra Energy Investors Urge Revival of Political Meddling Suit
    • 'Dangerous Drilling': Coral Gables Lawyer Files Motion for Class Certification Against Florida Power & Light
      

First Solar: Legal and Regulatory Risks

First Solar has been dealing with a mix of ESG challenges. The solar manufacturer is locked in patent litigation with JinkoSolar while struggling with broader industry headwinds like polysilicon oversupply, hurting bookings, and creating manufacturing problems. CEO Mark Widmar has pointed to policy uncertainty as a major roadblock, saying failed climate legislation is hampering domestic solar production. The company is also cleaning house with its Malaysian contractors over unethical labor practices. Despite proposed subsidy cuts dragging down the stock, RBC analysts still see nearly 40% upside potential as First Solar works through these operational and regulatory pressures.

 Key Controversies:

• • • First Solar forecasts higher 2025 sales, initiates legal action against JinkoSolar
    • Why First Solar Stock Remains a Frenzied Buy Despite Trump's Spending
    • FSLR - First Solar: No Floor In Sight - Pending Further Policy Clarity
    • Climate bill defeat a blow to U.S. solar production, First Solar CEO says
    • Human Resources Ministry to investigate four contractors who used forced labour at First Solar Malaysia

Siemens Energy: ESG Controversies and Operational Challenges

Siemens Energy is facing multiple ESG controversies, including criticism for its reliance on fossil fuels and accusations of greenwashing. Its Siemens Gamesa unit struggles with turbine quality issues, resulting in financial losses, employee layoffs, and legal disputes, including a blocked asset sale in India and corruption allegations. The company is also under legal scrutiny for delays in the Akkuyu nuclear project and past sanctions violations. Additionally, Siemens Energy has been criticized for a data breach involving MOVEit software and vulnerabilities in its products. Socially, it has faced backlash for abolishing its women’s quota in the U.S. and labor unrest at Siemens Gamesa facilities, including strikes over working conditions.

 Key Controversies:

• • • Siemens Energy Faces Criticism Over Fossil Fuel Dependence and Greenwashing Accusations
    • Siemens Gamesa Faces €1.6 Billion in Repair Costs Due to Wind Turbine Quality Issues
    • Russia’s Rosatom to sue Siemens over delay of equipment for Akkuyu nuclear power plant construction
    • An agreement has been signed at Siemens Gamesa Arazuri after two months of strike demanding equality with other centres

Conclusion

In conclusion, the clean energy sector faces critical ESG challenges that threaten its potential for sustainable growth. Companies like Tesla, Siemens Energy, and NextEra Energy must prioritize transparency, improve governance, and address environmental and social issues to regain stakeholder trust. By proactively tackling these concerns, the sector can strengthen its credibility and better contribute to global sustainability efforts. The path forward is challenging, but addressing these challenges is essential for the clean energy industry's success in combating climate change.

Reach out to SESAMm

TextReveal’s web data analysis of over five million public and private companies is essential for keeping tabs on ESG investment risks. To learn more about how you can analyze web data or to request a demo, reach out to one of our representatives.