Procter & Gamble Stock Declines After Partnering With EDF Renewable Energy

Procter & Gamble partners with EDF renewable energy to build wind farms for its U.S. plants.

P&G partners with EDF Renewable Energy in order to build a wind farm situated in Texas to power almost all of its US plants, according to the New York Times, but the company’s stock fell down by 0.90% to $74.98 on late Tuesday.

The company’s partnership makes a contribution in decline of its shares. The wind farm, which Procter & Gamble is aiming to build, is going to be able to create around 370,000 megawatt-hours of energy annually that can power almost 34,000 houses, according to New York Times. The company’s factories consume 300,000 megawatt-hours annually, making it clear that the factories would be taking up lesser energy in comparison to the expected production.

The establishment of wind farms will prove to be beneficial for the company because of the reduction in the annual expenditures helping it to attain more profit and net income. This will also give ideas to other competitors in the market and they are likely to follow the footsteps of P&G. Hewlett-Packard, Dow chemical, and Kaiser Permanente are already planning to generate their own supply of electricity by purchasing renewable energy, while making a good impact on the environment because some consumers actually hold companies and factories accountable for environmental harm and toxic ingredients.

The environment gets affected due to the production activities and if a change can be made, be it minor, it will make a huge impact on the environment and global warming. This fact is also considered by P&G, along with many other companies, which are devoted to environment conservation as part of their corporate social responsibility.

Procter & Gamble products will get more popularity as well because of this renewable energy decision. The company has made a promise of reducing the amount of greenhouse gas emissions in the year 2020 to 30%.  Its president, Shailesh Jejurikar, said, “We find a large number - call it two thirds of consumer looking to make some kind of contribution in the space and hopefully not making tradeoffs in value or performance.” 

P&G will benefit from the windmills but the decline in stock after the partnership bothers it. The shareholders just need to have patience now. The wind farm is expected to operate fully by December next year. The partnership was announced on October 19, at a ceremony at the White House where the company signed to the American Business Act on Climate Pledge. This plan is made by the president of USA himself, to involve major companies to reduce greenhouse gas emissions and combat climate change.

Procter & Gamble’s stock closed at $73.59 on October 21.