Climate Change and how it affects investing

March 30, 2015

solar'panels building Climate Change and whether it´s a real phenomenon or not is one of the most widely and heatedly debated of subjects you will find on the internet or anywhere else for that matter. Whether man-made climate change is real or not is not what I actually want to talk about here, but seeing as almost all the experts on the subject, i.e. climatologists think it is real, I´d be inclined to go along with those whose job it is to actually know about this stuff while I get on with what I do, writing!

One thing that is rarely discussed is if climate change is all bad? It just seems to be assumed by almost everyone, that it is bad. The actual truth is that there are some benefits to a warming planet and to increased CO2 levels. Direct benefits such as reduced heating bills, lower winter mortality rates and frivolous though it might be, more warm days to enjoy the sun´s rays. Higher CO2 is also beneficial to plant growth and leads to increased crop yields and there is plenty of evidence for this in many parts of the world.

Let´s make it clear though, we´re not saying that climate change is a good thing. If the worse is to be believed it wreaks havoc with weather systems and affects the poor of the world the most, those least responsible for it in the first place. For example, increased flooding in Bangladesh.  However, seeing as there are some actual benefits from it, then some companies and industries are surely likely to benefit more from it than others as well. So who are those companies?

The obvious sector you would expect to benefit is anything involved with green technology. More and more governments and companies and indeed the general public are trying to go green, those companies who are at the cutting edge of green technology could see massive growth.

Air conditioning manufacturers. Not exactly exciting stuff but nevertheless easy to see that sales of Air conditioning units should see a rise in the coming years.

Coastal defense construction specialists. Dutch companies, the nation renowned for their massive coastal dams and land reclamation from the sea are already seeing worldwide demand for their expertise.

Constructors of hurricane resistant buildings.

Solar panel manufacturers. Recently companies have started producing solar panels which can replace windows as they allow visible light through. In theory at least, these solar panels could help power houses and offices, where they would be particularly beneficial one would image would be on skyscrapers.

Whole countries even stand to benefit, Greenland is perhaps the prime example, their minerals, gas and oil becomes easier to access.

Whether it´s real or not, bad or not, the reality is politically it is recognized as a problem, many of the general public see it as a problem, so whatever you believe personally, as an investor you need to factor in the reality of the subject of climate change in to how and what you invest in, investing in green stands to be profitable and debatably you might even be doing a bit of good.