Clean Energy and Green Investments Analysis

In 2021 we encourage our clients to go greener, to follow investment strategies that can make a difference to our climate. There are significant indicators that suggest that such an investment approach will prove successful for investors and beneficial for the globe on all fronts.

Why Clean Energy? Why Green?

  • Joe Biden signs the Paris Agreement = positives for the clean energy and climate change movement.
  • Biden’s infrastructure legislation will create over 10 million good-paying jobs.
  • Once the US economy has recovered, taxes in the US are likely to be increased.
  • These taxes are likely to lead to further innovations.
  • The United States has slipped from being the most competitive economy to tenth place, competing economies such as the UAE, Singapore, and China will also prosper.
  • The European Union has committed to fighting climate change like never before by allocating 30% of the EU’s largest and most extensive stimulus package ever towards a more resilient and greener Europe.

This all indicates a renewed commitment to fighting climate change from the world’s governments.

Reopening, Recovery, Reflation

Re-opening of economies after Covid lockdowns are likely to bring substantial growth and recovery due to pent-up demand, particularly in economically sensitive industries e.g travel. There is a possibility of reflation, and inflation, as a result. Interest-rate’s will likely remain at or near zero for a long time to come. High savings and cash levels amongst consumers and corporations means there is plenty of money out there looking to generate returns more generous than those offered by deposits.

Going Cleaner and Greener in 2021.

This doesn’t mean that I am going to start eating more salads. Issues such as greenhouse gas emissions and carbon footprint are now mainstream investor issues. Socially responsible investments mean different things to different people. Therefore, this is not about socially responsible investments; this is about investments in a wide range of companies focused on creating environmental efficiencies. Investment approaches are available for clients who want to make a difference and also make a profit.
The clean energy and green sector provides exposure to companies that produce energy from solar, wind, recycling, water, and other renewable sources by identifying and targeting clean energy and green companies worldwide.

Average Market Return is not enough? What are your Alternatives?

The historical return of the S & P 500 market is more than 8%pa. Does this meet your expectations? We regularly speak about building a portfolio of low-cost, diversified investments that match your goals.
Clean energy and green sector investment performance has been in the doldrums for the past 15 years, despite the rising profile and awareness of climate change. Is there now significant evidence to suggest there will be outperformance over the next 15 years?
What's coming next?

Written by Pat Leahy

Published 2021-02-01

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