The shift toward sustainable investments

Is it often good to look at capital markets as an indicator for important future trends. They generally value companies on future expectations and sometimes anticipate important trends via massive shifts in flows and portfolio allocations. Last year has seen a crazy ride, with some of the strongest corrections in recent times, as also shown by the volatility indicator VIX at a historic high even above the financial crisis, so sometimes capital markets tend to exaggerate and create bubbles as well.

Early movers into renewable energy have been highly rewarded, as long term stock prices of companies like Orsted or Iberdrola show. This is in sharp contrast to utility and energy companies that did not move in this direction - while the early movers have multiplied their market value, the latter have lost in some cases up to over 80 percent and been completely marginalised. 

A recent study by the IEA/Imperial College finds that renewable energy stocks not only massively outperform conventional energy, but even at a lower volatility. The fact that climate change risks were finally widely recognized caused a big paradigm shift toward sustainable investments, accelerating this development.

While we need to be wary of greenwashing, this trend is very powerful and more and more banks completely abandon any financing of fossil fuels. Insurers dump utilities not exiting from coal and the question is how long capital will actually be available for fossil fuel projects.

All of this has profound implications and points towards a truly exciting and disruptive decade with fast defossilization.

We need to deliver the main chunk of the energy transition in this decade, otherwise it will be too late. So act now and fast and join us on our mission 'No Emissions'.