Climate policy stocks are up 78% this year as governments step up ambitions Climate policy stocks are up 78% this year as governments step up ambitions Climate policy stocks are up 78% this year as governments step up ambitions

Climate policy stocks are up 78% this year as governments step up ambitions

Equities 8 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  In the last two weeks the EU Commission, ECB and China have all been out with positive climate related policy actions and intentions which underscore the huge political support for the green transition to a less carbon intensive economy. Investors have also noticed this sending our climate related basket of 56 stocks up by 78% this year compared to only 5% for global equities.

Our basket of climate policy stocks is up 78% this year in USD on an equal-weight basis compared to 5% for the MSCI ACWI Index. Since the basket is not an index there is no official point-in-time date we can rely on as such our basket naturally has a survivorship bias and thus the long-term performance is impacted by this. Also, previous performance is not an indicator for future performance. But the strong performance this year highlights the huge focus on climate related stocks both from investors but also governments. Last week the EU Commission announced an ambitious 2030 Climate Target Plan which targets a 55% reduction in net greenhouse gas (GHG) emissions by 2030. The EU Commission is linking the ambitious plan with the need for massive fiscal spending to offset the decline in economic activity imposed by the lockdowns related to the COVID-19 pandemic.

This week the ECB followed up announcing that it will accept sustainability-linked bonds as collateral as part of their bond purchase programmes. Read Christopher Dembik’s research note on what the ECB’s decision means as green has suddenly become the new black. Yesterday Althea Spinozzi stayed with the “green” theme writing a research note on green bonds and how they could be attractive for investors.

Finally, China announced a carbon neutrality plan aiming for peak carbon emissions by 2030 before reaching carbon neutrality in 2060. This is an important signal because it puts pressure on the United States to also step up on climate change through active policies.

Back in early January 2020 we defined green stocks as the next mega trend in equity markets over the coming decades. The impact from climate change will make the COVID-19 pandemic, although serious and enormous in scale, look small in the bigger picture when this century is judged in the history books. In our view some of the largest companies in the world over the coming decades will be found among the companies that come up with effective solutions to clear air, carbon capture, hydrogen production, water treatment, water desalination, renewable energy, battery storage, mobility in urban cities, electric vehicles, fuel cells etc.

The table below shows an inspirational list of stocks with exposure to the climate theme and future policy implementation regarding the environment. The list consists of 56 stocks across themes such battery & energy storage, bioplastic, environmental services, fuel cells, hydro, mobility & electric vehicles, nuclear power, solar, wind and plant-based food. On list also contains the ECX carbon emission future which is a contract that prices carbon emissions in the EU. Given the new EU Commission target for carbon reductions the expectation is that carbon emission prices could rise as direct consequence of policy implementation as higher carbon emission prices is an incentive factor in investment decisions.

NameTickerThemeMarket capRevenueNet incomeEV/EBITDAEV/SalesYTD (%)5yr (%)
Panasonic6752:xtksBattery & energy storage21,04768,9042,0764.90.4-8.4-18.9
Ganfeng Lithium002460:xsecBattery & energy storage9,02476052123.314.054.5524.2
VartaVAR1:xetrBattery & energy storage5,5314065634.36.8-1.6NA
EnerSysENS:xnysBattery & energy storage2,6883,08813711.91.2-14.630.5
GS Yuasa6674:xtksBattery & energy storage1,4083,6391265.60.6-20.2-10.7
AlfenALFEN:xamsBattery & energy storage1,325160658.82.4225.4NA
Symphony Environmental TechnologiesSYM:xlonBioplastic6211-1NA2.7322.2307.3
Good Natured Products (**)GDNP:xtsxBioplastic138-3NA2.7-19.4-21.6
Biome TechnologiesNot availableBioplastic69-1NA0.8-14.356.9
Waste ManagementWM:xnysEnvironmental services47,20215,4551,67013.73.6-0.5146.6
Republic ServicesRSG:xnysEnvironmental services29,34610,2991,07313.03.43.9147.4
Waste ConnectionWCN:xtseEnvironmental services26,4355,38956726.05.314.9190.5
SuezSEV:xparEnvironmental services10,46820,16839412.01.215.311.4
PentairPNR:xnysEnvironmental services7,4142,95735615.82.5-1.141.9
Kurita Water Industries6370:xtksEnvironmental services3,9022,4361689.71.310.756.4
Cleanaway Waste ManagementCWY:xasxEnvironmental services3,0971,5667611.52.47.8252.4
Clean HarborsCLH:xnysEnvironmental services2,9593,412987.51.4-38.017.4
Plug PowerPLUG:xnasFuel cells4,851230-85NA12.7282.1482.4
Ballard Power SystemsBLDP:xtseFuel cells3,655106-39NA30.9108.41,115.4
Bloom Energy (**)BE:xnysFuel cells2,020785-304NA2.9104.0NA
PowerCell SwedenPCELL:xomeFuel cells1,225746NA170.944.21,588.7
Ceres PowerCWR:xlonFuel cells1,17320-6NA20.0113.7568.7
China Yangtze Power600900:xsscHydro62,4957,2213,11913.910.912.8NA
Brookfield Renewable PartnersBEP:xnysHydro14,1502,980-3419.110.225.3175.4
Meridian EnergyMEZ:xasxHydro7,8052,16811219.94.1-5.3205.2
TeslaTSLA:xnasMobility & electric vehicles354,42324,578-86290.38.1354.6654.7
UberUBER:xnysMobility & electric vehicles58,80014,147-8,506NA4.112.8NA
BYD01211:xhkgMobility & electric vehicles40,46617,63223419.81.8176.8171.0
NIONIO:xnysMobility & electric vehicles24,4651,133-1,634NA6.0346.8NA
LyftLYFT:xnasMobility & electric vehicles8,4173,616-2,602NA2.6-37.3NA
WorkhorseWKHS:xnasMobility & electric vehicles2,3620-37NA8,868.8639.1355.8
Avis BudgetCAR:xnasMobility & electric vehicles1,9009,1723026.42.4-14.2-39.5
ExelonEXC:xnasNuclear power33,58134,4382,9367.52.3-22.240.9
EDFEDF:xparNuclear power31,25179,8395,7714.61.1-11.9-24.6
CGN Power01816:xhkgNuclear power18,7618,8141,37110.34.7-19.4-41.0
China National Nuclear Power601985:xsscNuclear power10,0066,67066811.56.8-8.3-47.5
BWX TechnologiesBWXT:xnysNuclear power5,3951,89524414.33.0-6.1135.1
Xinyi Solar Holdings00968:xhkgSolar11,7261,16130821.17.297.9380.4
SolarEdge TechnologiesSEDG:xnasSolar9,4941,42614736.04.099.2681.3
Enphase EnergyENPH:xnasSolar8,85562416156.48.0168.91,679.7
First SolarFSLR:xnasSolar6,5723,063-11526.31.410.841.6
Vivent SolarVSKR:xnysSolar4,261341-102NA7.8366.3183.5
Scatec SolarSSO:xoslSolar2,808203-420.414.158.7410.5
Vestas Wind SystemsVWS:xcseWind29,58613,59878818.01.245.8206.4
Siemens Gamesa Renewable EnergySGRE:xmceWind17,08711,536158NA1.239.9125.7
Northland PowerNPI:xtseWind5,8311,25024210.87.746.8185.8
China Longyuan Power00916:xhkgWind4,9263,9886617.04.5-0.4-38.3
Innergex Renewable EnergyINE:xtseWind3,017420-2120.613.540.1183.8
Beyond MeatBYND:xnasPlant-based food9,402298-121,061.921.799.2NA
ECX Carbon Emissions (***)EMISSIONSDEC20Carbon emissionNANANANANA6.9

* Market capitalization, 12-month rolling revenue and 12-month rolling net income are all measured in USD mn.
** Peter Garnry owns shares in Bloom Energy and Good Natured Products with no intention to sell within the next month
*** ECX Carbon Emissions can be traded through a CFD (expiring every year in December) or a future (Dec-2020 has ticker code CFIZ0)
**** YTD (%) and 5yr (%) is total return year-to-date and the last five years in local currency

One of the key technologies in the transition to a less carbon intensive economy is batteries & energy storage as renewable energy needs storage as it cannot always be produced when demand is there. We have recently written about Tesla’s ‘Battery Day’ and how it offered a glimpse into better and more efficient batteries over the coming years, and a more general research note on lithium-ion batteries and how the battery industry will prove a high-growth industry for decades.

The climate theme will also be impacted by the upcoming US election on 3 November. The Trump administration has done little to advance climate policies pulling the US out of the Paris Accord and rolled back many EPA rules. Biden has as a part of his campaign launched a plan called Clean Energy Revolution which contains spending of $1.7trn over 10 years. Read our research note from August describing which green energy stocks could go up in the case of a Biden win.


Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 07

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
  • The rise of populism: Far-right parties will influence the future

    The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.

    Read article
  • Investing in China: Navigating Q1 amid economic challenges

    Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.

    Read article

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.