Investment giant becomes latest major player to step up its interest in the burgeoning clean tech space
Schroders has launched a global equity fund, targeting the transition to a low carbon economy by investing in companies focused on clean energy.
Investing across renewable power production, transmission, distribution and storage, as well as smart grid technologies and electric vehicle charging, the Schroder ISF Global Energy Transition fund will not allocate to companies with exposure to nuclear or fossil fuels.
The long-only portfolio of 30 to 50 stocks will focus on three significant global trends; the decarbonisation of power generation, the electrification of energy use and increased energy efficiency.
Managed by Schroders' commodities and resources investment team, the fund will have a sustainability focus and a bias towards 'best-in-class' companies, and those that can demonstrate clear progress towards reducing their dependence on carbon.
The global energy transition will require $120tr of investment by 2050 to meet climate goals, according Schroders' head of commodities and manager of the fund Mark Lacey, who added there was also "growing consumer demand for clean technologies…creating strong real earnings growth opportunities".
Lacey said: "A significant inflection point has now been reached in the last two years which is allowing companies in the sector to become attractive investment opportunities.
"We therefore believe this could be a beneficial time for our clients to allocate to energy transition."
Head of sustainable research at Schroders Andrew Howard added the "dramatic change in ways we produce and consume energy" means "exposure to the energy transition sector is not just an investment opportunity but also a necessity".
He said: "There is now global recognition from governments, consumers and investors that the production of clean energy is essential for the planet.
"The other recognition is that the scale of the investment required to achieve the transition to more sustainable energy is in the trillions of dollars.
"Renewable energy and electric vehicles are only a part of the change; the way we use electricity, the way it is stored and how it is distributed needs to be updated and this requires significant investment.
"Schroders is excited to be able to offer investors exposure to this fast growing and exciting sector using an active approach."
This article first appeared at Investment Week