Renewable power is outperforming fossil fuels in major American and European stock markets but investment in clean energy is still falling well short of the level needed to put the world’s energy system on a sustainable path.
The claims come from a study by Imperial College Business School which added the renewables listed universe today is small cap and therefore low liquidity. This would make these stocks hard to hold by institutional investors and asset managers.
It also stated there is a lack of depth in the renewables universe in public equity markets. While a larger set of opportunities exist in private equity markets, they are not accessible to individual investors.
However, Fundeye has identified many investment opportunities that tap into the renewable sector, such as Bluefield Solar, one of the largest pure play solar energy providers on the markets. Bluefield partner James Armstrong discussed the company’s record earnings earlier this year.
Gore Street Energy Storage Fund is another investment company that fits the renewable sector well, Fundeye spoke to CEO Alex O'Cinneide (pictured) in April as the fund seemed unscathed in a COVID ridden market place, its share price holding up extremely well.
Dr Charles Donovan, Executive Director of the Centre for Climate Finance and Investment at Imperial College Business School, said in a statement: “There's momentum gathering behind renewable power, based on its economic advantages. Our results show that renewable power is outperforming financially, but has still not attracted sizable support from listed equity investors.”
However, data from Bloomberg shows that BNY Mellon has a 25 percent stake in Bluefield Solar and there are lots of institutional investors on other renewable energy trust’s shareholder registries. While it may be true that buying stocks in a listed oil major is a more direct way of gaining exposure to the fossil fuels market, the growth in renewable funds suggests that as a sector there is plenty of scope for investor participation.
