Executive Summary

  • The imperative for an effective response to climate change only grows following the hottest year on record. Climate investing faces risks in 2017, particularly from the incoming US administration, but nuanced opportunities exist for positive environmental and social impact coupled with attractive potential returns.
  • Growth in clean power may face new obstacles arising from federal fossil fuel policies, but is supported by programs at the state and municipal levels. The opportunities are even greater abroad due to falling generation costs.
  • The Trump administration’s stated intention to focus on infrastructure could result in much-needed investments in water infrastructure and improving resource efficiency.
  • Across major asset classes, we believe:

– Low-carbon and more general sustainability strategies executed by active managers enable investors to shift between sectors, geographies and companies as needed to generate return and impact.

– Active managers in this space tend to outperform the common thematic benchmarks such as the Wilderhill Clean Energy Index and the S&P Global Clean Energy Index.

– Green bonds are being included in core fixed income strategies, offering an avenue for investors looking to increase the impact of their fixed-income investments.

– Sustainable/low-carbon private equity investments have respectable track records in terms of both longevity and performance.

  • Cornerstone Capital, as an investment advisor, helps its clients navigate these tumultuous times while supporting their goals of transitioning to a clean energy economy and adapting to the impacts of climate change. We believe in the opportunity for impact and risk-adjusted returns as the role of private investment becomes ever more critical in responding to climate change.

Download our full report here.

To discuss customized advice on this or other investment themes, please contact us at info@cornerstonecapinc.com.

Sebastian Vanderzeil is a Global Thematic Research Analyst with Cornerstone Capital Group. He holds an MBA from New York University’s Stern School of Business. Previously, Sebastian was an economic consultant with global technical services group AECOM, where he advised on the development and finance of major infrastructure across Asia and Australia. Sebastian also worked with the Queensland State Government on water and climate issues prior to establishing Australia’s first government-owned carbon broker, Ecofund Queensland. 

Craig Metrick is Director of Manager Due Diligence and Thematic Research Analyst at Cornerstone Capital Group. Previously, Craig was Principal and US Head of Responsible Investment at Mercer, working with a variety of public and private clients. Before joining Mercer, Craig was a Director at the Investor Responsibility Research Center (IRRC), which provided ESG research to institutional investors. Craig is a Chartered Alternative Investment Analyst, and currently serves as Chair of the Board of Directors of the US Forum for Sustainable and Responsible Investment (USSIF).