Donald Trump’s victory does not favor green energies. The president-elect of the United States has publicly spoken out against sustainability and his measures will predictably harm parts of the renewable energy sector. Therefore, the main stock index in this segment, the S&P Global Clean Energy, in which 100 green listed companies from around the world are listed, fell more than 10% in the seven days following the election. Since then, it has increased by less than 2%. Within this index, Vestaa Danish wind turbine manufacturer, has reached fall of 19%, losing 5 billion euros in stock market value. Sunrun, a US supplier of photovoltaic systems, was less fortunate, collapsing 40%. Orsted, a Danish company specializing in offshore wind, fell almost 10%, while Iberdrola moderated its losses to less than 2%. Concerns over tariffs have also weighed heavily on listed Chinese companies (a third of Clean Energy Index members are Chinese).
Apart from the Trump effectthe truth is that the sector was already in decline throughout 2024. These companies were burdened largely because the rate cuts – which favor them, being a highly indebted sector – arrived later than expected , and not without doubts. Thus, the global clean energy index fell by 22% over the year; but, From this level, analysts give it an upside potential of 32%.. On the other hand, within the Ibex 35, Solaria and Acciona Energía are also the two most bearish stocks in 2024; Solaria falls 46%, and from this level, the potential attributed to it by analysts is 55%; For its part, the Acciona subsidiary fell by around 30% and the future upward trajectory exceeds 36%.
Experts emphasize that beyond rhetoric anti-ESG of Trump, the future president will not dismantle the IRA (Inflation Reduction Act, the big package of measures professional transition energy activated by Joe Biden); most of the beneficiaries of this law are precisely the Republican states well positioned in renewable energies, like Texas. He Trump effectalthough noticeable in the short term, does not modify the long-term attractiveness of the energy transition and renewable energies as an investment theme, especially in a context of falling rates. Right now, opportunities may arise, said fund manager Beatriz Pérez. Income 4 megatrends Environmenta few days ago, during his speech at the IV ESG Forum of elEconomista.es.
Within the same event, Antonio López, Head of Sustainability and Actions at March AM, warned that the EU was very clear regarding the energy transition, as demonstrated by the powerful regulatory instrument deployed by the Commission, and highlighted that North American fund managers will have to adapt to this reality if they wish to distribute their products on the Old Continent. For his part, Jorge Urriza, head of sustainability and ESG at Ibercaja Gestión, said that the measures envisaged in the IRA have already started and that it would be very difficult to reverse them without harming the interests of the republican states themselves .
Given the panorama described, it is not surprising that funds in the Alternative Energy category (at Morningstar) are experiencing declines this year. Their 5-year balances are better. In 2024, the Clean energy transition Pictetwhich increased by 3.1%, while over five years it recorded an annualized rate of 8.8%.
