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Matching environmental investing with financial objectives

3 reasons to consider Pictet Cleaner Planet

Active Equity 3 min read
As the past few years show, if the economy is to thrive in the 21st century, it will need affordable energy, abundant natural resources and the ability to adapt to extreme weather.
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PCLN invests in companies that are developing solutions to these complex challenges.

The environmental technology, or cleantech, industry is already a large global business - a USD 5 trillion market that is growing at 7-8% per year.Pictet Asset Management estimate, 2025 For investors, it represents a potentially attractive source of long-term capital growth, supported by innovation, favorable regulation and shifting business and consumer preferences.

Here are three reasons why we think you should consider PCLN.

Rising electricity demand

As the US and other major economies try to become more energy self-sufficient, this is giving rise to attractive investment opportunities right across the electricity supply chain.

In the US alone, electricity demand is expected to rise 25% from 2023 levels by 2030, thanks to a boom in artificial intelligence data centers, cloud computing, industrial reshoring and the electrification of cars and buildings.https://www.icf.com/insights/energy/demand-growth-challenges-opportunities-utilities

We believe that, without investment in infrastructure, this surge in electricity demand could overwhelm an aging grid, causing continual blackouts. It could also lead to higher energy bills. At this rate, US households could see electricity prices rise by some 15-40% by 2030. By 2050, prices might be double what they are today.https://www.icf.com/insights/energy/demand-growth-challenges-opportunities-utilities

Our fund invests in businesses that are developing products that will build an energy system fit for the 21st century. This includes smart grids, advanced transmission infrastructure, and semiconductors that allow power networks to use renewable sources of energy.

Tapping into water solutions

Energy is not the only scarce resource. Water is another. Even if we seem to have enough of the wet stuff, it isn’t always in the right place for those firms that need it for agriculture, manufacturing and cooling, nor is it always safe to drink.

In the US, for example, the water industry is struggling to meet demand as frequent droughts, aging and leaky infrastructure and thirsty AI data centers puts pressure on supplies.

All of which is creating commercial opportunities for businesses that specialize in water treatment, recycling, precision irrigation, pollution testing, leak detection and smart meters. Many companies operating in this industry are witnessing rapid profit growth and, as such, are a major part of PCLN’s investment universe.

Adaptation and resilience to extreme weather events

Flash floods, dust storms, heatwaves and wildfires. Extreme weather is a feature of modern life.

In 2024 alone, the US saw 27 weather disasters, each one causing losses of more than USD1 billion. That’s three times more than the 1980-2024 average.https://www.ncei.noaa.gov/access/metadata/landing-page/bin/iso?id=gov.noaa.nodc:0209268

But extreme weather doesn’t just cause damage to housing, transport, agriculture and power networks. It also increases insurance costs, which adds to the economic toll.

It is against this backdrop that a dynamic new industry – adaptation and resilience, or A&R – has begun to take shape. These are companies that develop and manufacture the satellite imaging devices, cooling technologies and fire-resistant materials that help households and businesses contain the effects of severe weather. With corporate sales of A&R products estimated to be already running at USD500 billion per yearTailwind Adaptation and Resilience Innovation Playbook, 2024: https://www.tailwindfutures.com/wp-content/uploads/2024/12/Final-Tailwind-Playbook-12.12.24.pdf - the industry promises to be a rich source of investment opportunities; it will also be a prominent feature of the PCLN fund.

Footnote

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Important information

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