Cleantech stocks are companies that are utilizing a new technology and/or related business models intended to provide solutions to global climate or natural resource challenges. Individual sectors under the cleantech umbrella include renewable energy, energy efficiency, smart grid, energy storage, ecosystem services, transportation, water, agriculture, and clean industry.
Climate Risk and the Carbon Bubble
Fossil fuels companies face the risk that many of the still-in-the-ground assets they count on their balance sheets and/or in their future revenue projections may never be recovered or realized. The Carbon Tracker Initiative has totaled up the amount of carbon that publicly traded companies held in reserves of discovered oil, natural gas and coal. Most of the carbon – the basis for the fossil fuel companies’ market valuations – was “unburnable.” Investors must realize that if government policies curtailed carbon emissions, the value of these companies would fall and fall quickly.
Led by pressure from activists, an increasing number of investors are expected to divest fossil fuel holdings this year, amid growing awareness the risks of climate change, according to a recent analysis. Research has shown that the “number one” ESG trend to watch in 2013 is how emissions and weather-related risks can impact investment portfolios. The index and investment research provider cited the 350.org campaign known as Fossil Free in which students from over 200 universities in the US have called for their endowment funds to sell holdings in fossil fuel companies.
Cleantech Finance provides news, original research, and market insights of cleantech stocks, IPOs and market trends impacting your portfolio. We maintain a thorough and detailed database of cleantech stocks, ETFs, mutual funds, and REITs and provide high-quality, original research on fundamentals driving the growth of the companies and individual sectors.
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