Finding opportunities in the energy transition

Some observers believe Donald Trump's return to power spells disaster for sustainably themed investment, citing the US President's long-held dislike of wind turbines and his promise to wind back the Inflation Reduction Act of 2022. Such concerns may appear valid after a flurry of activity following his return to office, and a sweeping array of executive orders directed towards promoting fossil fuel energy and cutting government support for sustainable technologies.

However, it would be a mistake to believe that Trump's policies will halt the growth of transition-aligned industries. While his actions to date, and no doubt actions to come, will slow some industries in the US and create ongoing uncertainty there and around the world, the factors inevitably driving the global economy to become more efficient and sustainable are not going away. While the headlines are largely negative, the Trump administration's policy agenda will in fact benefit many sustainable technologies.

Counterintuitively, the impact of short-term uncertainty has improved the investment potential in many of the areas that President Trump seeks to undermine.

Investment in sustainable technologies at the outset of the first Trump presidency delivered good investment outcomes over the subsequent four years, and there is every chance that this will occur again.

Shaken, not stirred: Confidence in cleantech suffers, but the transition continues

As the Trump administration embarks on its second term, it is fair to say that many industries face a period of heightened uncertainty, particularly those singled out as part of what President Trump has described as the 'green new scam'. The administration's early actions-from halting subsidies for electric vehicles (EVs) to enacting emergency powers to aid domestic fossil fuel extraction- have understandably shaken investor confidence in clean tech. Trump's further desire to reverse both recent and long-standing federal legislation to remove policy support for and incentives related to clean energy only serves to exacerbate that.

There is no doubt that some of the Trump administration's actions will have their intended effect.