As the cost of renewable energy sources such as wind and solar energy continues to drop, they are becoming increasingly competitive with conventional energy sources such as coal or oil. In fact, research shows that experts have consistently underestimated the growth of clean energy for the past ten years. The chart below, from GMO, shows that since 2011 the projected growth in renewables has jumped higher, we expect this trend to continue. Below, according to GMO, we highlight the case for investing in stocks related to climate change.
Returns:
- We believe there will be exceptional investment opportunities in the climate change sector.
Secular Growth:
- We expect long-term secular growth in the sector
Industry Dynamics:
- We carefully evaluate industry dynamics to identify industries where companies can monetize the secular growth.
Value-oriented Approach:
- We expect a disciplined, value-oriented approach to be critical in this sector.
Other Attractive Features:
- Beyond the prospects for strong returns, we believe a climate opportunities strategy can provide diversification, inflation protection, and opportunities to capitalize on inefficiencies.
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