Investors can align their money and morals by investing in funds offering exposure to companies furthering the transition to sustainable energy.
Clean energy initiatives have seen a resurgence in popularity this spring following concerns about over-reliance on Russian energy exports, focused attention on the role of renewables and energy efficiency in improving global energy security.
Additionally, McKinsey’s recent “net-zero 2050” report estimates that $9.2 trillion will need to be invested across various sectors annually to limit the global temperature rise to 1.5°C by 2050 — an estimated 60% increase on current investment levels.
Investors looking to add exposure to the quickly growing industry should consider the SmartETFs Sustainable Energy II ETF (SOLR), which invests in companies poised to benefit from the energy transition. This includes companies that believe in providing or supporting alternative or renewable energy sources, or those that produce, generate, transport, deliver, or extend energy applications to make alternative or renewable energy more efficient or accessible, according to SmartETFs.
The time has come for sustainable energy, and for many reasons, traditional fossil fuels are simply no longer competitive.
Sustainable energy is now cheaper than conventional energy. In fact, solar and wind have become the cheapest form of energy for most of the planet, according to SmartETFs.
Favorable legislature has also served as a tailwind for the space. Biden’s clean new energy plan, the China green revolution, and the EU’s plan to reduce carbon are all large-scale plans to embrace clean, sustainable energy.
SOLR is actively managed and fully transparent, investing in 30 approximately equally weighted positions globally.
The fund holds securities spanning all market caps, including large-cap (57.32%), mid-cap (25.01%), and small-cap (17.06%), and micro-cap (0.61%), according to ETF Database.
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