As global governments reshape their economies to achieve a more sustainable future, capital will shift away from high-polluting industries and sectors toward greener, cleaner ones. However, this change won’t happen overnight, providing investors with unique opportunities to capitalize on the companies driving the change.
In the upcoming webcast, Understanding Investing in the Carbon Transformation: A Due Diligence Session, Roger Mortimer, Portfolio Manager, KraneShares, will explore tomorrow’s low-carbon leaders and provide a discussion about a new strategy that focuses on carbon transformation.
Specifically, the Kraneshares Global Carbon Transformation ETF (KGHG) is an actively managed ETF that aims to capture the low-carbon leaders of the future.
KGHG focuses on companies in traditionally high emissions industries that are on the cusp of the transition away from fossil fuels to renewable technology, according to KraneShares. Companies in high impact industries that have a stated commitment and demonstrated action towards decarbonization may see superior growth compared to their peers, as well as potentially benefit from a reevaluation and improved environmental, social and corporate governance (ESG) score.
KraneShares argued that decarbonizing operations is becoming increasingly important as pressure for companies to address climate change intensifies. Global energy demand will grow 50% by 2050 and 80% of the world’s energy use is still fossil fuels.
“Three core drivers of decarbonization include: greater policy reforms around regulating emissions, increasing inflows into ESG and impact investments, and technological advancements driving down costs for renewables,” according to KraneShares.
“Green capital expenditure is an emerging multi-decade secular theme that is crucial in facilitating the decarbonization transition across industries. This significant increase in infrastructure spending will create investment opportunities.”
KGHG can help provide access to the emerging decarbonization leaders disrupting their industries and provide potential portfolio diversification, as climate-focused investments may act as a differentiated and non-correlated source of return that is not driven by the economic cycle.
Financial advisors who are interested in learning more about the global carbon transformation can register for the Tuesday, May 24 webcast here.
