Clean energy trends are "unstoppable"

Portfolio exposure to the clean energy transition is a vital tool in an investor's toolbox, amidst low overall growth which in some countries has turned negative or become unstable, a global investment manager says.

The long-term trend toward electrification and renewable power shows no signs of slowing yet.

Direct investments in the sector, supplemented by fossil fuel energy sources to ensure grid stability during the net zero transition, is turbocharging growth.

The research comes out of Nuveen, the investment manager of US financial retirement services firm TIAA, which had US$1.2 trillion in assets under management (AUM) as of 31 Dec 2023 and operations in 27 countries.

"Investors... recognise the very real risks posed by fissures and fault lines in the economic terrain - and the need to navigate them successfully. This is the challenge we're facing midway through 2024," Saira Malik, Nuveen chief investment officer said.

"The long-term trends toward electrification and renewable power appear unstoppable. Opportunities include direct investments in specific clean energy industries like solar and wind, complemented by exposure to more traditional energy sources (e.g., natural gas, nuclear power) that will still be needed to meet energy demand while alternative sources and technologies continue to mature.

"From a practical standpoint, few investors can be full-time market seismologists, monitoring every danger zone and anticipating every aftershock before taking their next step. But informed awareness of the risks and opportunities shaping the current landscape may help them avoid cracks - and protect their portfolio's back."