Is a strong ‘green’ economic recovery in sight?

May 21, 2021


We believe the rebound from the Covid-19 crisis is likely to be the most environmentally friendly economic recovery on record. Fueled by abundant liquidity, investors are flocking to back myriad projects in renewable energy, electric vehicles, plant-based food, social inclusion and the circular economy.

These flows are expected to bring enduring economic benefits: from reduced waste production, to cleaner and cheaper energy, to more resilient and climate-friendly agricultural practices. Achieving net-zero carbon status by 2050 has become a more realistic prospect too, beyond just ‘buying green’. It is no wonder that, a recent correction notwithstanding, the companies providing innovative solutions and the support for transition across economies have seen their stock prices rise.

In our view, innovation alone is not going to solve the planet’s most pressing problems. Sustainable investing requires a pragmatic approach and should not be limited to loftily valued ‘solution providers’. When profits cease to matter, you know problems are brewing. We believe investors should embrace the successful implementers of sustainability solutions into business practices that drive efficiency, build brand value, and help companies remain relevant in a changing world.

Andrew Parry, portfolio manager, Newton

All investments involve risk, including the possible loss of principal. Certain investments involve greater or unique risks that should be considered along with the objectives, fees, and expenses before investing.

Charts are provided for illustrative purposes and are not indicative of the past or future performance of any BNY Mellon Investment Management product.

"Newton" and/or the "Newton Investment Management" brand refers to Newton Investment Management Limited. Newton is incorporated in the United Kingdom (Registered in England no. 1371973) and is authorized and regulated by the Financial Conduct Authority in the conduct of investment business. Newton is a subsidiary of The Bank of New York Mellon Corporation. Newton is registered with the SEC in the United States of America as an investment adviser under the Investment Advisers Act of 1940. Newton's investment business is described in Form ADV, Part 1 and 2, which can be obtained from the website or obtained upon request.

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.

This material has been provided for informational purposes only and should not be construed as investment advice or a recommendation of any particular investment product, strategy, investment manager or account arrangement, and should not serve as a primary basis for investment decisions. Prospective investors should consult a legal, tax or financial professional in order to determine whether any investment product, strategy or service is appropriate for their particular circumstances. Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change. This information contains projections or other forward-looking statements regarding future events, targets or expectations, and is only current as of the date indicated. There is no assurance that such events or expectations will be achieved, and actual results may be significantly different from that shown here. The information is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. BNY Mellon Securities Corporation is a subsidiary of BNY Mellon.

Not FDIC-Insured | No Bank Guarantee | May Lose Value