ELMRI in the AFR: Renewable Energy Investment in the Current Political Climate

As the 2024 U.S. presidential election approaches, concerns are mounting in the investment community, particularly in the ESG (Environmental, Social, and Governance) sector. The possibility of Donald Trump's return to the White House has led many to anticipate a rollback of environmental policies, similar to those he initiated during his first term. This prospect is causing fund managers to reassess their positions, especially in green energy and climate-related investments, which have already been underperforming in recent years.

While a Republican presidency might increase fossil fuel drilling, it is unlikely to derail the broader energy transition. Much of the job creation from the Inflation Reduction Act (IRA) has occurred in Republican-leaning states, making it uncertain whether Trump would dismantle these initiatives.

Additionally, with Kamala Harris now gaining on Trump in the polls, the outcome of the election remains uncertain, and this political volatility must be considered.

Despite recent challenges, including higher development costs and interest rates, we remain optimistic about future renewable energy investments, particularly as the macroeconomic conditions become more favourable.

This note has been prepared by ELM Responsible Investments (‘ELMRI’) ABN 70 607 177 711 AFSL 520428, for Australian wholesale clients for the purposes of section 761G of the Corporations Act 2001 (Cth).

The information is not intended for general distribution or publication and must be retained in a confidential manner. Information contained herein consists of confidential proprietary information constituting the sole property of ELMRI and its investment activities; its use is restricted accordingly.

This note is for general informational purposes only and does not purport to be comprehensive or to give advice. The views expressed are the views of the writer at the time of preparation and presenting and all forecasts, assumptions, opinions, data and other information are not warranted as to accuracy or completeness and are subject to change without notice. This is not an offer document and does not constitute an offer or invitation of investment recommendation to distribute or purchase securities, shares, units or other interests to enter into an investment agreement. No person should rely on the content and/or act on the basis of any material contained in this note. Any potential investor should consider their own circumstances and seek professional advice.

ELMRI funds, its directors, employees, representatives and associates may have an interest in the named securities.

Past performance is for illustrative purposes only and is not indicative of future performance.