27% of AAON’s energy use comes from renewable sources



in net sales growth over the last decade



in R&D spending since 2016

The Path to Drawdown: Geothermal

Solving climate change and staying below 1.5ºC of global temperature increase requires that the world switch from fossil fuels-based power to using 100% emissions-free sources.

Geothermal power is a technology that converts the steam coming off of underground reservoirs of hot water into electricity. Some geothermal techniques reinject the condensed steam back into the underground reservoirs after being used for electricity generation, while others use geothermal steam to heat another liquid, which is used to generate electricity. Unlike wind and solar, geothermal power generation can take place 24-7 without disruption and under almost any weather conditions. And while drilling for geothermal is expensive, the heat source itself is free. 

Geothermal power accounted for 0.34% of total global electricity generation in 2018. According to Project Drawdown, geothermal would have to grow to about 2.6-2.8% by 2050 for the world to be on a path to remain under 1.5ºC of warming. 

To get there, geothermal would need to undergo a drastic expansion over the coming decades:

  • 90 TWh in 2018

  • 4,064 TWh in 2050

  • 12.65% CAGR from 2018-2050

The IEA also projects that, to reach a 100% clean electricity grid by 2030, geothermal electricity generation would require a 10% annual increase between 2019 and 2030.


AAON Inc. (stock ticker: AAON) designs, manufactures, and sells semi-custom heating, ventilation and air conditioning equipment (HVAC) for commercial and residential use. They are headquartered in Tulsa, Oklahoma.

AAON's Role in Drawdown

AAON’s product line features an extensive range of heating, ventilation and air conditioning units. These include generic rooftop units and indoor and outdoor air handling units.

Unique in AAON’s offering are geothermal heat pumps, which take advantage of the constant temperature of the Earth (depending on latitude, ground temperature ranges from 45°F-75°F) by exchanging heat with the Earth through a ground heat exchanger. They offer rooftop, self-contained, and split system versions of geothermal heat pumps.

AAON: What We Like

We commend AAON for taking several important steps (p. 5) to improve their environmental footprint and energy conservation:

  • Through their partnership with a waste-to-energy facility, AAON’s Tulsa, Oklahoma facility converted 524 tons of waste into energy in 2019
  • They’ve also recycled 9,852 tons of waste.
  • They’re replacing incandescent and fluorescent lights with LED alternatives
  • In 2019, 29% of AAON’s energy use came from renewable source

AAON: What We Want to See Improve

Set GHG Emissions Reduction Targets

We agree with AAON (p. 14) that their innovatively designed HVAC products help commercial buildings reduce their carbon footprint by becoming more energy efficient. But we want AAON to cut their own emissions as much as possible. Right now, AAON’s sustainability report doesn’t list any concrete targets for reducing GHG emissions. We urge them to set clear, quantitative targets for reducing direct and indirect emissions by the end of this decade.

Switch to Renewable Energy Faster

We’re happy to see that AAON is making an effort to bring in renewable energy for their operations. At the same time, we think they can do better. They should switch completely to renewable and clean energy source for all of their operations and manufacturing over the next decade so as to significantly reduce their carbon footprint.

Report Key Sustainability Metrics

AAON’s sustainability report is still lacking in important metrics. For investors who are concerned about the carbon footprint and sustainability of their portfolios, some important data include a company’s energy use by source (29% of AAON’s energy-use is renewable, but what about the rest?), water usage, scope 1, 2 and 3 emissions, and emissions avoided through their products and services. These pieces of information should be included in AAON’s reports as soon as possible.

Other Geothermal Stocks in the Climate Index

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