Climate change legislation may be up in the air, but a growing number of utility companies worldwide have already hit the ground running with new ways to reduce carbon footprints and meet rising energy demand.

A sizeable focus on renewable energy, smart-grid initiatives, and a presence in markets less encumbered by regulatory uncertainty are the big attractions behind many of the utility investments being held by socially responsible mutual funds.

"Renewable technology is much more nimble and flexible," than large scale technologies like nuclear energy and clean coal, which can take up to ten years to get approval by the U .S. Department of Energy before even being built, says Lily Donge, a senior sustainability analyst who directs environmental research and advocacy for the Bethesda, Md.-based Calvert Group Ltd.

Earlier this year, Calvert conducted an internal benchmarking study of the utilities in the S&P 500 universe, says Donge. Companies were analyzed and ranked by emission costs, management and governance of carbon risk, and opportunities. Three companies that topped the list include NextEra Energy Inc. (until recently known as FPL Group, Inc.), PG&E Corp., and Consolidated Edison Inc.

NextEra Energy, which will change its NYSE ticker symbol from FPL to NEE in late June, runs Florida Power & Light and is the nation's largest generator of wind and solar power. Last month, it raised $190 million in capital for wind projects. "That ability to attract capital when the financing infrastructure is quite thin at this time is remarkable," says Donge. It's held in the Calvert Global Alternative Energy Fund.

Wind projects are getting more cost competitive in relation to natural gas, thanks to greater technology efficiencies, says Donge. And while its just 2% of the energy produced in the U.S., wind energy accounted for more than 40% of the country's additional energy generation in 2008, she notes.

Con Edison, held by the Calvert Social Index Fund, is a power distribution company that's making big investments in smart-grid technology. It's helping design better grids to facilitate more efficient use of energy. It's also installing communication tools which enable commercial and industrial buildings to take power when they need it and give it back to the grid through solar panels, says Donge.

"We absolutely see efficiency and smart-grid programs becoming more main stream. Two years ago, no one knew what smart-grid was. Now the question is how companies can leverage and make money off that," she says.

PG&E Corp. isn't currently in any Calvert fund, but "they are very much leaders in targeting and managing CO2 emissions," says Donge. Its fuel mix, more diversified than that of many other utilities, includes natural gas, renewables and nuclear energy.

Calvert's core funds don't have any nuclear holdings although companies with some nuclear involvement, like NextEra Energy, are permitted in the Calvert Global Alternative Energy Fund as long as they focus on alternative energy. Calvert is doing enhanced engagement with two companies held in its advocacy-oriented Large Cap Value Fund which have nuclear operations, Duke Energy Corp. and Southern Co.