- Switzerland
- July 22, 2022
War and crisis also set the world back in terms of UNO Sustainable Development Goals - But there are rays of hope
Barely seven years remain to achieve the United Nations Sustainable Development Goals (SDG…
Megatrend Exposure
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The Climate & Energy score of this Portfolio is 6%
Climate & Energy
The Globalance Megatrend-Share shows you the average share of revenues of the portfolio that is achieved in one or more megatrends. For the calculation, the Megatrend-Shares of the individual investments are capital-weighted and added up.
6%
Climate & Energy Exposure
7th
Climate & Energy is the 7th most represented megatrend in this portofolio
64 (of 502)
of the holdings are invested in this megatrend
What's at stake
The megatrend climate and energy is one of the most omnipresent trends of our time. Researchers agree that anthropogenic greenhouse gas emissions in the 21st century to date exceed those of the Paleocene/Eocene temperature maximum by a factor of about ten. The last time the global temperature was as high as it is today was 100'000 years ago. The concentration of CO2 was last at today's level three to four million years ago. The fact that humans are accelerating global warming is considered scientifically proven. Researchers are uncertain on how fast the planet is heating up and where exactly what consequences can be expected. To avert the climate crisis, global warming must be limited to a rise of less than 1.5 degrees Celsius - as set out in the Paris Climate Agreement. To achieve this, global greenhouse gas emissions must be reduced to zero net by 2050, as the latest report of the Intergovernmental Panel on Climate Change (IPCC) shows. The next few years are crucial to achieving this goal.
Climate & Energy Exposure of your Assets
Portfolio Megatrend Exposure
Data source: Globalance
What am I looking at?
The graph shows you the score for each asset. The shape of each asset is its stylized Footprint-Profile.
Asset Name | Climate & Energy Exposure | Global Megatrends Exposure | % of portfolio | |
|---|---|---|---|---|
| Generac Holdings Inc. | 100% | 100% | 0% | |
| Enphase Energy, Inc. | 100% | 100% | 0% | |
| Consolidated Edison, Inc. | 100% | 100% | 0% | |
| Trane Technologies plc | 100% | 100% | 0% | |
| A. O. Smith Corporation | 100% | 100% | 0% |
Why does it matter
Opportunities
The megatrend climate and energy means that growth and quality of life (travel, mobility, consumption and infrastructure) must be sustainable. This requires innovations and new business models on an unprecedented scale.
The aim is to create a society that even has a net positive effect on the environment. "Net positive" means giving more to the environment than it takes from it. To achieve this, objectives and ideals must be redefined. The price of a product is defined by its environmental performance and not only by its direct costs.
The megatrend has great potential for creative disruption. Clean energies will replace fossil energies.
High demand, driven by government regulations and objectives, is driving innovation.
Inefficient infrastructure, especially buildings, must also be replaced by efficient buildings or materials.
Risks
The OECD states: "Even if the currently planned national climate protection contributions are fully implemented, there is likely to be a warming of around 3° degrees, with probably severe damage".
In order to avoid climate change, existing oil reserves, for example, must not be burned. Governments could introduce significant CO2 prices. As a result, oil companies will have to write off large amounts of biogas plants. This leads to so-called "stranded assets".
Following from the above we have to anticipate physical, societal, economic and political risks.
Relevance for Investors
The climate crisis is relevant for investors for several reasons. Starting with the risk perspective, it is important to avoid those companies that emit pollutants with their products or their production. These include first and foremost companies in the fossil energy sector. Their business opportunities could be massively restricted by political decisions and could be subject to taxes. Renewable energies are one of the most important instruments for dealing with climate change. The following three main areas are in Climate & Energy: - Renewable Energies - Energy efficiency - Energy Storage There are also investment clusters such as low-emission public transport, vehicles with alternative drive systems, water (treatment and recycling), waste recovery and sustainable use of natural resources. Marketable products and services already exist today in all the areas mentioned. However, technologies with ef-fectively negative emissions are only in their infancy. Negative emissions are defined as technologies that remove net CO2 from the atmosphere (see climate protection projects).
Latest Insights
Globalance assesses and comments: With our Insights, we show you what the developments in the world mean for your assets. The focus is on future-oriented answers to major challenges.