The war in Ukraine invites us to reevaluate our foreign relations and has created a platform for energy policies to be revitalized. With the connection between energy security and renewables entering the mainstream debate, investors have moved their attention to the related exchange-traded funds.
In March of this year, investors allocated around 642 million USD towards renewable energy, with Invesco Solar ETF and Invesco WilderHill Clean Energy ETF taking up the lion’s share of 400 million USD.
“The activity doesn’t match squarely with broad activity across exchange-traded funds, pointing to Russia’s invasion of Ukraine as a catalyst for renewed interest in the space,” Pippa Stevens reports for CNBC. “Funds that track the S&P 500 attracted around $6.9 billion in inflows during March. Capital also flowed into these funds in February and December, at the same time that investors were exiting renewable energy funds.”
Solar stocks have indeed been on the rise since the changing global energy landscape. Tata Power’s shares, an Indian utility company with the main focus on renewables including solar, went up 21% in four days, while intel on solar investments has been reported on heavily these past few months.
According to a new report by the Centre for Climate Finance & Investment at Imperial College Business School, such investments in clean energy make financial as well as environmental sense, especially when they are diversified.
“Government, corporate, and investor flows are required to fund the transition to a lower-carbon economy in advanced and emerging markets.” Mili Fomicov, Researcher at the Centre for Climate Finance & Investment at Imperial College Business School, said in a statement.
Several nations have already declared to move up their green energy transition in the interest of obtaining energy security. Europe has announced plans to speed up the shift away from fossil fuels, even if harmful bridge fuels will be leveraged in the meantime, while the Biden Administration has recently submitted a budget proposal that addresses climate goals, equity, and advancement in clean energy. Most recently, Japan has been forced to face the reality of its energy insufficiencies. On the 1st of April, the Prime Minister, Fumio Kishida, announced that they would not halt its energy projects in Russia. This has led to international uproar, and climate Data Provider TransitionZero has reminded Japan of its immense potential in offshore wind farms.
“Recent disturbing geopolitical events highlight the need to accelerate the energy transition, and those renewables are a more viable source of energy supply,” Fomicov continues. “Our study demonstrates that this investment could provide financial and diversification benefits.” Sign this petition to tell Massachusetts to go all-in with renewables
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