africaen
Sustainable Investing Glossary

Sustainable technology

Sustainable technology is that which can contribute to a more resource-efficient future and is mainly found in four areas: renewable energy, digitalization, decarbonization, and the circular economy. It has been gaining ground in recent decades amid wider technological advances that can deal with many of the planet’s problems. Investing in sustainable technology is a major theme for funds targeting trends, renewables and the circular economy.

Renewable energy

The most visible use of sustainable technology has been in renewable energy. Advances in light refraction technology has led to the development of solar power farms the size of cities. The largest wind turbines now stand over 300 meters tall, or as big as the Europe’s tallest building, the Shard in London. This has led to major investor demand in the makers of solar panels and the high-strength fiberglass composites used in wind turbine blades.

Creating returns that benefit the world we live in
Creating returns that benefit the world we live in
Sustainable investing

Evolution of wind turbine heights and output

Source: Bloomberg New Energy Finance

Digitalization

The digitalization trend is revolutionizing all forms of business, and is particularly prominent in financial technology which is transforming payment systems. Demand for cashless payments were further boosted by the coronavirus pandemic, while disruption to supply chains has raised interest in better logistics. Both can be tapped by fintech or industrial trends funds.

Decarbonization

Decarbonization is causing business models to change, most notably in the move away from the internal combustion engine towards electric vehicles. This has switched attention towards components for products such as car batteries, though the mining of lithium and cadmium present their own sustainability challenges. Smart mobility funds have tapped into the opportunities offered not only by electric vehicles, but also autonomous driving and shared transport systems.

Circular economy

The circular economy theme has been growing as the world gradually moves away from the take-make-dispose model of extracting resources to produce goods that are then mostly discarded. The circular model focuses on technology that can aid recycling, extend product life and reduce wasteful packaging. New technologies, such as those developing biodegradable plastics, as well as changing consumer preferences regarding longer lasting products are seen as major drivers. 

While these are the four largest themes, virtually all technology is being made more sustainable in one way or another, as the world becomes more efficient. Innovations range from making a dishwasher use less water to air conditioning systems that use less energy in office buildings, and satellites that can check up on deforestation. The biggest challenge is seen in further developing carbon capture technology, as its ability to remove CO2 from the atmosphere is currently too small to make a noticeable difference.

See also: Circular economy, Decarbonization
What we’ve learned from three years of SDG credit investing
What we’ve learned from three years of SDG credit investing
It’s possible to pursue both wealth and well-being.
28-07-2021 | Insight
Podcast: Are investment managers ready for ESG going mainstream?
Podcast: Are investment managers ready for ESG going mainstream?
More and more investors say they choose their fund manager based on their sustainability credentials.
27-07-2021 | Podcast
The CO₂lumnist: Carbon scopes participating at the Tokyo 2021 Olympics
The CO₂lumnist: Carbon scopes participating at the Tokyo 2021 Olympics
Investors rely on data to make decisions on climate strategy.
22-07-2021 | Column
Logo

Disclaimer

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.

Please confirm that you are a professional investor and/or institutional investor and that you have read, understood and accept the terms of use for this website.

I Disagree