Big Money in Sustainability – SAP and Siemens Energy Are Raking It In – RE Royalties Delivers a 10% Dividend

SAP: Digital Tools for Greater Success in Corporate Groups

The Walldorf-based software giant SAP is resolutely driving forward sustainable transformation. With the SAP Sustainability Control Tower, the company provides a central platform that integrates sustainability data directly into operational business processes. The application runs on the SAP Business Technology Platform and seamlessly links financial metrics with greenhouse gas emissions in accordance with the GHG Protocol. This protocol is the world's most important and widely used standard for measuring, accounting for, and managing greenhouse gas emissions. The software enables highly automated reporting in accordance with strict European regulations. Integrated assistants such as SAP Joule also support management teams in AI-driven analysis of strategic initiatives in the energy sector. Although SAP is not a provider of renewable energy, its solutions benefit from the green transformation. Recurring SaaS revenues generate predictable cash flows—and this also applies to sustainability-related software.

Siemens Energy Benefits from Restructuring

Siemens Energy operates in a completely different area of value creation, where the company has finally turned things around after years of turbulence. Following problems at its wind power subsidiary Siemens Gamesa, the Grid Technologies segment is now boosting the Group's earnings as a profit driver. In the second quarter of fiscal year 2026, order intake climbed to EUR 17.75 billion. The total order backlog reached a record level of EUR 154 billion. As a result of these figures, management raised its annual revenue growth forecast to 14 to 16% and now expects an earnings margin of 10 to 12% for 2026, excluding one-time items. In addition to the boom in substations and high-voltage grids, the upswing at Siemens Energy is also driven by the boom in AI data centers. To underscore its independence from the parent company and save on licensing fees, Siemens Energy plans to rebrand as Omterra soon.

RE Royalties: License Revenue from Green Projects as a Source of Returns

Away from the major tech and industrial conglomerates, RE Royalties occupies an innovative niche. The Canadian project financier consistently applies the principle of license financing, familiar from the commodities sector, to the renewable energy sector. Instead of giving up equity, project operators receive cash, while RE Royalties secures gross revenue royalties in return over terms ranging from 15 to 25 years. Since traditional banks often overlook projects in the CAD 10 million to CAD 30 million range, RE Royalties reports strong demand from project operators. The company's existing portfolio includes approximately 135 projects in solar, wind, hydropower, biogas, and energy storage worldwide. The operating figures underscore the strength of the model. In 2025, the business generated revenue of CAD 6.2 million, offset by manageable costs due to the asset-light model. For new projects, RE Royalties' management is targeting a double-digit internal rate of return. This shows that the business model works.

RE Royalties Focusing on New Partnerships or a Potential Exit Scenario

Details from past transactions demonstrate how dynamically the model scales in practice. For the Jackson Center solar project in the US state of Pennsylvania, the company financed the construction of a 27-MW solar plant and, in return, secured tiered royalty payments from the gross proceeds. A deal with Revolve Renewable Power provides a secured loan of USD 8.0 million for a wind farm, offering 12% interest and a 5% gross revenue royalty through 2046. Even in the Maldives, RE Royalties is providing a CAD 10 million facility for solar plants. This broad regional diversification has enabled shareholders to enjoy a consistently stable dividend yield of around 10%—meaning RE Royalties is not only a growth stock but also offers compelling arguments for more conservative investors.

However, although RE Royalties repeatedly highlights its extensive deal pipeline, the company's valuation has not really moved forward and currently stands at just under CAD 20 million. To address what RE Royalties' management views as a valuation discount, in the best interests of shareholders, the company has engaged PricewaterhouseCoopers to conduct a strategic review to evaluate options, including partnerships or a sale of the company. Indeed, with its expertise and track record spanning more than 100 projects, RE Royalties appears to be in a promising position. However, the business is not entirely without risk—if project developers slip into insolvency, there is a risk of lost revenue. With demand for renewable energy remaining strong and RE Royalties benefiting from a highly agile, asset-light business model, the stock deserves a closer look from investors.