Why Climate Action Now? Examining the Recent Selloff and Current Investment Opportunity

Perspectives — Lazard Asset Management

November 14, 2023

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Shares of clean tech companies, which make up a large portion of the climate action investable universe, have sold off substantially over the last 24 months, spurred by a confluence of factors, including rising interest rates, inflationary pressures, geopolitical tensions, and a lack of clarity around the rollout of key government initiatives.

Despite these challenges, following the first anniversary of the passage of the landmark U.S. Inflation Reduction Act (IRA), Lazard Asset Management's fundamental conviction in the climate action theme has become even stronger in the current environment.

The drivers of the Lazard Climate Action Strategy Team's heightened conviction in climate action investing are numerous, but are based primarily on their belief that:

  • Unprecedented government and private investment will transform the industry.
  • Nascent technologies are becoming more economically viable.
  • Logistical and inflationary headwinds should dissipate.
  • Valuation does not reflect the earnings potential of the space, providing an attractive entry point.

In this Lazard Perspectives piece, Lazard Climate Action portfolio managers provide evidence to support these beliefs and help explain why they think now is an opportune time to invest in climate action.

Click here to read the report in full.

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