Thematic environmental strategies face countervailing forces in the near term. Support may come from the ‘green shoots’ of the recent growth stock recovery, offset by the downdraft of recessionary risk. Investors with a longer-term view should stay focused on the tailwinds and enduring drivers of demand including regulatory and legislative support.
On this Talking heads podcast, Edward Lees, co-head of the environmental strategies group, tells chief market strategist Daniel Morris that 2023 should be the year of implementation for green initiatives such as the US Inflation Reduction Act, predicting some of the capital flows could last 10 years.
On the latest earnings news, he says any weakness represents ‘delayed, not lost, revenues’. He notes the recent COP27 meeting brought ‘not nearly enough progress’, but highlighted some encouraging developments.