In part two of this two-part series, Frédérique Carrier, head of investment strategy at RBC Wealth Management, compiles the technological solutions to invest in to help foster a sustainable future.
This report looks at the importance of sustainability from an investment perspective. It highlights some of the technologies and innovations that could help curb the greatest threats to the sustainability of the global economy. In our view, companies at the forefront of developing technology solutions to sustainability issues may offer compelling long-term investment opportunities.
Environmentally friendly technologies that aim to reduce greenhouse gas (GHG) emissions.
Our climate change article looked at several emerging technologies used in buildings to dramatically cut fossil fuel consumption. We highlighted geoexchange technology, which takes advantage of constant subterranean temperatures to heat and cool structures.
Greentech also encompasses electric vehicles (EVs) and the ecosystem around them, including batteries, parts, and semiconductors. According to a Deloitte Insights report released in 2020, EVs accounted for 2.5% of new car sales globally in 2019.
“Greentech also encompasses electric vehicles (EVs) and the ecosystem around them”
It expects EV sales to grow by an average of 29% per year over the next decade, with EVs constituting just over 30% of new car sales globally by 2030 thanks to a broader model offering, a reduction in battery costs, and greater access to affordable public and home charging infrastructure.
Regional differences will emerge depending on governments’ commitments to investing in EV infrastructure and offering cash and tax incentives. Deloitte expects EV sales in 2030 to account for 48% of domestic new car sales in China, 42% in Europe, and a more modest 14% in the US.
Other Greentech industries include wind farms and solar power, and the development of batteries to store the power generated by these intermittent sources of energy — the wind doesn’t always blow and the sun doesn’t always shine — while comparatively the demand for electricity is more constant.
Wind energy accounted for some 8.8% of total electricity generation in the US in 2020, according to the US Energy Information Administration (EIA), while solar energy contributed a lesser 2.3%. Together they provided some 10% of all electricity generated in the US. The EIA predicts the share of all renewables (i.e. including hydro) in the US electricity generation mix will double from the current 21% to 42% by 2050, with wind and solar driving much of that growth.
Hydrogen, another key aspect of Greentech, could potentially help meet a non-negligible 14% of US energy demand by 2050, according to the Fuel Cell & Hydrogen Energy Association.
While much of the attention garnered by hydrogen has focused on transportation applications — cars, heavy trucks, locomotives, ships, even…
Read more:: The sustainable technologies worth investing in