The threat to our climate and biodiversity is severe, yet the world has never been in a stronger position to address it. Renewable-energy costs have fallen for solar, wind, and batteries. Funding for climate technology has grown. Engineers are supported by increasingly sophisticated technology, software and computational power. Governments and regulators are pushing for action. The world knows what needs to be done and there is an action plan for carrying out the transition.
The Jupiter Green Investment Trust finds the firms developing and implementing solutions for the world’s most pressing environmental challenges. The trust follows six core investment themes: clean energy; green mobility; the circular economy; green buildings and industry; sustainable agriculture and land ecosystems; and sustainable oceans and freshwater systems.
We are more convinced than ever that environmental challenges are central to global development in the long term, and the solutions will be among the leading mega-themes of the foreseeable future, not to mention a source of long-term, above-market capital growth.
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While much attention is focused on clean energy and green mobility, we also see powerful long-term trends that are less prominent, but affect a multitude of sectors, offering structural growth opportunities to a wide array of companies. Here are three picks in the portfolio that encapsulate this approach.
Wading into water pollution
Canada’s Stantec (Toronto: STN) is a leader in global sustainable engineering and environmental services. Among the top ten in Corporate Knights’ 2023 Global 100 most sustainable corporations in the world, Stantec is suitably diversified across business lines, with approximately a fifth of its business in water solutions.
In this segment, the company consults global water-utility providers, including those in the UK that are now set to invest heavily in pollution monitoring and avoidance technology, given the well-publicised controversy around sewage discharges.
The company is also benefiting from technology and equipment specifically designed to mitigate the effects of climate change, such as flood-defence mechanisms, including new environmental infrastructure in energy and transportation.
Another company focused on solving complex environmental challenges is Ansys (Nasdaq: ANSS), the world’s leading engineering simulation-software provider with diversified exposure and a strong financial profile. Ansys sits within our circular-economy theme, and provides solutions to minimise customers’ resource and material use by reducing physical prototypes in the research and development (R&D) and testing phase of product development. Longer-term, both regulation and consumers’ expectations are driving companies to “design out” waste by ensuring their products are recyclable at the end of their usable life, with Ansys’s solutions among the enabling technologies.
An excellent choice for energy efficiency
A strong recent contributor is Monolithic Power Systems (Nasdaq: MPWR), which provides power-management solutions that help deliver energy efficiency in cloud computing, automotive markets and artificial intelligence (AI) applications. We added to our position last year on the back of the sell-off that had affected semiconductor markets. The sector’s downturn overlooked the positive long-term demand for a step- change in energy efficiency in these areas.
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