ESG Dossier on the future of energy

• Use of renewable forms of energy remains the best solution for the future
• Sustainable investments benefit from political tailwind
• Informative articles on “Energy of the Future” in our new ESG Dossier

Climate change presents mankind with hitherto unseen challenges. Our use of energy and the resources from which we obtain it play a central role in this. We need new strategies and technologies to make the ambitious climate goals achievable. In the latest edition of its regularly published ESG Dossier, Erste Asset Management (Erste AM) therefore focuses on the topic of “The Energy of the Future”.

The use of renewable forms of energy remains the best solution

As Walter Hatak, Head of Responsible Investments at Erste AM, points out, there is no perfect solution when it comes to finding the energy of the future. Whether solar energy, wind power or hydro-electric power – every energy resource always comes with certain downsides. “Instead of burying our heads in the sand, however, we are in a position to choose the best possible alternative, to take the future into account in our planning, and to learn from past mistakes,” Hatak emphasises. The use of renewable energy remains the best solution, along with research into the use of new energy sources such as hydrogen.

The guest article by WWF Austria also emphasises the urgency of expanding renewable energies: “The expansion must take place quickly and cannot be at the expense of nature. Both are possible.” In addition to switching to more sustainable forms of energy, more efficient use is also necessary.

Ambitious political plans

The year 2022 was also a gamechanger in terms of energy supply. The Russian war of aggression in Ukraine caused an energy crisis and ruthlessly revealed the dependence on fossil energy imports. The European Union (EU) presented REPower EU, an ambitious plan to diversify energy supply and make it fit for the future. In the USA, the Inflation Reduction Act was passed in the summer, which stipulates billions of dollars in investments in green energies. The political tailwind can be a decisive step in the energy transition. “We can only hope that politicians take their ambitions seriously,” comments fund manager Alexander Weiss in his article.

“Green technologies” support energy transition

The energy transition also favours companies from the environmental technologies sector, among others. These “green technologies” are likely to remain one of the megatrends of the coming years. With the ecologisation of the economy, new energy carriers are also becoming increasingly attractive. For example, recent technological advantages and cost reductions could decisively change the environment for the production of green hydrogen. Our experts are also closely involved with new technologies and companies that play a pioneering role in this area, as the article by fund manager Alexander Weiss on a visit to a company in Portugal shows.

Investors can benefit from energy transition through sustainable investment funds, such as the ERSTE GREEN INVEST* impact fund. The portfolio includes companies from various areas of the environmental economy. In addition to the major theme of ‘energy”, the areas of “water”, "waste & recycling", and the “transformation” and “adaption” of the economy also play a crucial role.

For information by our experts and guest authors about “The Energy of the Future”, please visit our latest ESG Letter: https://blog.en.erste-am.com/energy-of-the-future/

About us:

Erste Asset Management (Erste AM) coordinates, and is responsible for, all asset management activities across Erste Group Bank AG. At our locations in Austria, Germany, Croatia, Romania, Slovakia, the Czech Republic, and Hungary, we manage assets worth EUR 70.4bn (as of November 2022).