Power politics: Re-examining the case for investing in decarbonisation

After a turbulent few months in the markets, Deirdre Cooper re-examines the case for investing in companies with the potential to benefit from global decarbonisation.

May 6, 2022

9 minutes

Deirdre Cooper
After a turbulent few months in the markets, Deirdre Cooper re-examines the case for investing in companies with the potential to benefit from global decarbonisation.

Seismic shift

Russia’s invasion of Ukraine has triggered a seismic shift in European energy policy, centred on a rapid acceleration towards renewables. Combined with elevated oil and gas prices and heightened energy-security concerns far beyond Europe’s borders, the conflict could ultimately influence how many countries generate electricity, heat and cool homes and offices, power factories and fuel vehicles. What does all this mean for investors?

From one perspective, events in the first months of 2022 have merely strengthened an existing investment trend. The world urgently needed to wean itself off fossil fuels before Russia’s aggression on its neighbour, and it has even more reason to do so now. We remain convinced that decarbonisation is a powerful growth tailwind for select businesses, giving them the potential to increase market share, revenues and profits.

After the turbulence of this year so far – which, beyond the events already mentioned, includes soaring costs, rising interest rates and further supply-chain disruption – it seems a good time to re-examine how investors may be able to capture the opportunities presented by the transition to a low carbon economy.

Read the full paper

Authored by

Deirdre Cooper
Portfolio Manager

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