The outbreak of COVID-19 in 2020 caused a lot of people to
re-evaluate.
For many, it was the first time they had breathed air free from
car-exhaust fumes, slept without street noise or seen the sky without the vapour trails of
air traffic.
While the fallout was fast and severe for some – including
industries such as aviation and hospitality, which are still struggling to recover – for
others it served as a reminder of what could be possible.
And so sparked a new wave of interest in green investing. While
brokers will have a keen understanding of what is important to their core customers, it’s
also important to keep abreast of growing trends to be able to identify new clients, or
new areas of growth among existing clients.
So, what do you need to know about green investing?
What is green investing?
Green investments, also known as eco-investments, are businesses
or funds that look for ways to reduce harmful pollutants or use their resources more
sustainably. Green investment companies can range from electric vehicle (EV)
manufacturers, reusable energy providers, food brands to various alternative technology
firms.
While eco-investing is often thrown into the mix with socially
responsible investing (SRI) and environmental, social and governance (ESG) investing, it
is important to note that they are not the same thing. SRI and ESG investing focuses on
supporting companies that make quality choices in regard to human rights and social
justice, in addition to environmentally friendly policies.
COVID-19 effect on stocks:
The benefits of lower air pollution during the initial lockdown
of 2020 had a clear impact on all of us, with green investing opportunities becoming more
of a priority for some. At the start of 2020, despite broader market turmoil, many green
stocks were in bullish markets and continued to surge as time went by.
Emerging markets saw a record increase in climate investments
which soared to new heights in 2021, providing traders with new opportunities to expand
their portfolios in the eco-conscious route. Total global investments in green and
eco-conscious stocks reached $755 billion last year – a 25% increase from a year earlier –
according to BloombergNEF’s annual investment report.
Indeed, investors are developing an increased interest in this
exciting sector. Here are five climate change stocks brokers may want to consider paying
attention to.
Tesla (TSL)
Possibly one of the most popular electric vehicle manufacturers,
Tesla, was founded in 2003 by Elon Musk, Martin Eberhard, JB Straubel, Marc Tarpenning and
Ian Wright who all believed that driving electric cars is better, quicker and more fun
than gasoline cars.
Today, the company not only specialises in building all-electric
vehicles but also infinitely scalable clean energy generation and storage products.
Tesla went public on 29 June 2010 trading under the ticker symbol
TSLA. Its stock surged by nearly 390% between the start of February 2020 and the beginning
of January 2021. The firm reached its all-time high of over $1,200 per share at the
beginning of November 2021.
Beyond Meat (BYND)
Beyond Meat is a plant-based food company that specialises on the
production of vegan meat. It was founded in 2009 by Ethan Brown with the goal of creating
“delicious, nutritious, sustainable protein so that you can Eat What You Love™, no
sacrifice required.”
From juicy burgers to Italian-style meatballs, sausages and mince
the company uses no GMOs, gluten or soy in its products. In a recent report, it was noted
that a Beyond Meat Burger has 12.7 times less greenhouse gas emissions than a regular beef
burger.
The company went public on 2 May 2019. It was the first ever
vegan meat alternative firm to list on the US stock market and is traded under the ticker
symbol BYND. During the pandemic years, the company’s stocks surged by around 162% between
January 2020 and mid-October 2020.
Plug Power (PLUG)
Plug Power Inc. is the world’s only provider of turnkey hydrogen
fuel cell solutions across the transportation, aerial, robotic and stationary power
applications industries. It specialises in the development of hydrogen fuel cell
technology that combines hydrogen and oxygen to create electricity, with water and heat as
by-products.
The firm was founded in 1997 and has since deployed over 45,000
fuel cell units. It provides solutions for NASA, BMW, Boeing and Amazon.
Plug Power went public on 29 October 1999 and is trading under
the ticker symbol PLUG. Its shares started to pick up speed in 2020 but truly skyrocketed
at the start of 2021, surging by around 1,106% between $6.08 on 20 February 2020 and
$73.34 on 26 January 2021 – its all-time high.
Brookfield Renewable Partners LP (BEP)
Brookfield Renewable Partners LP owns a number of renewable power
generating facilities in North America, Colombia, Brazil, Europe, India and China. The
firm’s businesses range from renewable power and transition including hydroelectric, wind
and utility solar; to infrastructure such as utilities, transport, midstream, data;
private equity; real estate and credit and insurance solutions.
The company was founded in 2011 and went public on the New York
Stock Exchange (NYSE) in June 2013 under the ticket symbol BEP.
Its share price skyrocketed by around 203% to $49.36 on 25
January 2021 after briefly dipping to $16.28 on 20 March 2020.
Republic Services Inc. (RSG)
Republic Services Inc. is a solid waste collection company that
specialises in non-hazardous, solid waste collection, waste transfer and disposal,
recycling and energy services. It is based in the United States and owns a number of
collection companies, transfer stations, recycling centers and landfills focusing on
providing effective and reliable environmental services and solutions to their customers.
The firm was founded in 1998 and since then expanded to operate
186 regenerative landfills, 76 recycling processing centers, 75 renewable energy projects
and 12 commercial composting facilities.
It went public on 10 July that same year on the New York Stock
Exchange and is trading under the ticker symbol RSG. Between 23 March 2020 and 30 December
2021, RSG shares surged by around 111%, rising from as low as $66 to as high as $139
respectively.
Eco-friendly investments do not just provide profits but also
environmental benefits. As the world adjusts to climate change, fossil fuels and other
polluting industries are in the likes of facing higher costs and regulatory barriers, thus
opening the door for more green investment opportunities to emerge.