Opportunity: Energy investing
Investing in the transition
Thanks to carbon pricing, regulations and lower costs the energy sector is undergoing a once-in-a-century transition. New players and business models are driving growth and increasing well-being. But this is just the beginning.
Renewables are fueling innovation and growth. Solar has become the cheapest source of electricity in history and capacity is expanding fast. However, there’s still a long way to go. The net zero trajectory requires annual investment in clean energy to reach USD 4 trillion by 2030, more than triple current levels.
Renewable energy is only a first step. Alone, it is not enough to hit net zero, and investments are needed across the entire value chain. Renewable must be accompanied by reducing energy intensity, electrifying buildings and transport, and increasing smart grids by 2050, when dedicated investments in energy infrastructure will far exceed investments in energy generation.
Roman Boner CFA
Senior Portfolio Manager
The energy sector accounts for 75% of global emissions, making it the largest contributor to climate change
The energy sector accounts for 75% of global emissions, making it easily the single largest contributor to climate change. The IPCC recently revealed we are on course to reach a catastrophic 2.7°C temperature increase rather than the agreed 1.5°C.
Switching to renewable energy is the only way forward.
Climate solutions are gaining momentum. The cost of clean technologies is falling dramatically. In 2020, renewables accounted for 90% of net power capacity expansion globally. EV uptake is also increasing.
Government action is supporting clean energy markets. More policies will further boost clean tech and infrastructure, the most powerful policy being carbon pricing regimes.
Abundant private sector financing is now available. Following COP26, 1,045 companies have signed and agreed to invest to reach net zero by 2050.
Why RobecoSAM Smart Energy?
The RobecoSAM Smart Energy Equities strategy invests in cleaner solutions across the energy value chain. This includes renewable energy production, smart grids and decentralized energy networks that optimize renewable electricity production, transmission and distribution, as well as investments in the efficient management and use of energy. These help decarbonize transportation and other heavily emitting industries.
The strategy is actively managed and sustainably driven. SI input is integrated into portfolio investment decisions and helps inform future investment strategies. Since inception in 2003, the strategy’s assets have grown to nearly EUR 3,3 billion as at September 2022.