Should you invest in sustainable stocks amid various hurdles?

Highlights

  • Just 1.2% of the 5,000 huge multinational firms are making significant disclosures regarding their climate risks, as per Arabesque.
  • Sustainable investing is becoming popular as investors are becoming more aware about where their money is being channelised.
  • Pressure from investors, combined with carbon taxes and top-down regulation can reduce renewable energy costs, as per CEO of Ceres Phil Caldwell.

Amid the catastrophic impact of climate change and destruction of the environmental setup, sustainable investing has been a very poplar topic of discussion among investors as well as companies, as it helps them get the required investment capital to combat the climate issues. Funds received from sustainable investments help in financing a variety of green projects, such as projects related to eco-friendly transportation and renewable energy.

But as per the latest data released by a thinktank, just 1.2% of the 5,000 huge multinational firms are making significant disclosures regarding their climate risks. Meanwhile, over half of these large, listed firms, around 54%, aren’t making any disclosures at all. In 2019, all the 11 recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) were considered and reported on by these 1.2% of the companies, as per the new report published by ESG research and investment manager Arabesque.

As investors are becoming more aware about where their money is being channelised, the environmentally conscious but money-savvy investors are choosing to go for green and eco-friendly projects and are thus contributing towards a sustainable future for the planet.

However, there are various hurdles in the way of sustainable investing as of now. The most important one is “greenwashing” under the garb of ESG rules. The companies claim to be moving towards sustainable projects while investing in coal mining, oil and gas, which harm the environment. It is also very difficult to measure the progress of sustainable investments due to inaccurate reporting. For a greater positive impact, the social priorities of the entire community must align.

Recently, energy company Ceres Power has partnered with the Imperial College, London, to bring out the cheapest flow battery in the world. CEO Phil Caldwell said that due to pressure created by investors, combined with carbon taxes and top-down regulation, the companies are thinking to reduce the costs associated with renewable energy, which will further provide a boost to the sustainability goals and gradually sustainable investing.

RELATED READ: How ESG and sustainable investments are changing investments, businesses

Here are some of the LSE-listed sustainable stocks that investors can go for.

Active Energy Group PLC (LON: AEG)

London-headquartered Active Energy Group PLC has a green economy mark on the LSE and is engaged production of traditional and second-generation biomass products. Active Energy Group PLC’s shares were trading at GBX 0.40 at 8:21 AM on 19 November 2021 (GMT).

Greencoat UK Wind PLC (LON: UKW)

London-headquartered Greencoat UK Wind PLC mainly invests in the wind farms projects the UK. With a green economy mark on the LSE, the current market cap of the FTSE250-listed company stands at £2,851.37 million. It has given a return of 1.24% in the last one year. Greencoat UK Wind PLC’s shares were trading at GBX 134.00 at 8:14 AM on 19 November 2021 (GMT).

RELATED READ: Why Sustainable Financing is so Crucial in Present Scenario

Gore Street Energy Storage Fund PLC (LON: GSF)

UK-based Gore Street Energy Storage Fund PLC is London's first listed energy storage fund on LSE. It invests in facilitation of renewable growth and invests in assets across the UK as well as globally. The current market cap of the company stands at £395.07 million. It has given a return of 11.46% in the last one year. Gore Street Energy Storage Fund PLC’s shares were trading at GBX 114.50 at 8:18 AM on 19 November 2021 (GMT).

AFC Energy plc (LON: AFC)

Headquartered in Cranleigh, AFC Energy plc develops hydrogen fuel cell power systems for companies to generate clean energy. It is a constituent of the FTSE AIM UK 50 index, and its current market cap stands at £418.66 million. It has given a return of 114.47% in the last one year. AFC Energy PLC’s shares were trading at GBX 57.90 at 8:24 AM on 19 November 2021 (GMT).

Ceres Power Holdings plc (LON: CWR)

Headquartered in Horsham, Ceres Power Holdings plc is a world-leading UK-based company which develops low cost, next generation solid oxide fuel cell (SOFC) technology. It is a constituent of the FTSE AIM UK 50 index, and its current market cap stands at £2,170.57 million. It has given a return of 47.22% in the last one year. Ceres Power Holdings PLC’s shares were trading at GBX 1,138.00 at 8:26 AM on 19 November 2021 (GMT).

RELATED READ: Carbon conscious: 6 carmakers agree to go green by 2040

Comment


Disclaimer