Climate Assets monthly update: Optimistic opportunities in the energy transition

We are now near the end of a second quarter earnings season that has shown signs of support for the Climate Assets strategy. We take reassurance from the fact that most companies continue to post profits ahead of consensus forecasts, and that all major equity regions are predicted to provide year on year earnings growth in 2024 and beyond. Fixed interest continues to offer attractive yields and we expect it to dampen declines for multi-asset portfolios. To read more about our macroeconomic view please view our latest monthly commentary.  

As with many things political though, it is far from straightforward and we acknowledge that about 40% of the manufacturing investments announced in the first year of the IRA implementation, have been delayed or paused. Delays are driven by slowing demand and uncertainty around the US presidential election. However, many of the projects that have been delayed are relocating to red states to ensure Republican support and thus it is in everyone’s best interest to remove financing and permitting barriers to support the overall labour market. These pieces of legislation were landmark acts and while the execution details may differ over time and be subject to political changes, the big picture remains one of increasing government support in this area.