Goodbye oil and fossil industries, hello renewable electricity and energy efficiency: investors are increasingly turning to sustainable energies, convinced of their generalization in the economy.
On August 31, fell one of the most emblematic values of the Dow Jones, the benchmark index on Wall Street which brings together 30 of the most powerful companies: the American oil company Exxon.
Entered in 1928 in the elite, of which it was until 2011 the largest capitalization, Exxon had only one week to prepare for the demotion.
This lapse is the symbol of a more global weakening: in France, Total, which for a long time weighed the heaviest in the CAC 40 index, has lost its splendor, and the price of a share has even fallen below 30. euros at the end of September, at the lowest since the beginning of the 2000s.
Since January 1, the world index grouping together oil and gas exploration and production companies has lost 50% of its valuation, against a backdrop of falling black gold prices. The decoupling with the market trend was accentuated from the index rebound in March.
Conversely, the world index of alternative energies, which includes companies for which at least half of their income is linked to a more sustainable economy, has increased by nearly 40% since January 1.
Best progressions of 2020
On the Parisian market, values around renewable energies are among the best increases of the year. Since January 1, the renewable electricity producer Albioma has increased by 70% and its competitor Neoen 50%, respectively the 2nd and 4th best performances of the SBF 120.
On the smallest indices, Voltalia took more than 40%, and the hydrogen producer McPhy saw its valuation almost multiplied by six.
These values “are still too small to attract large funds. They have yet to prove themselves on the market, ”said AFP Oskar Tijs, analyst specializing in the sector at NN Investment Partner. However, they show that the sector is buoyant. “Renewables are no longer seen as additions to fossil fuels, but as the future of energies,” said Tijs.
The successes also exist on a larger scale, as with Ørsted. The Danish company abandoned fossils in 2017. Since that date, its stock market price has tripled.
The success of the sector can be explained by technical progress which has embellished the fundamentals: “solar electricity was once five times more expensive than fossils. Today, even without a subsidy, it has become cheaper on average, ”suggests Xavier Chollet, manager of the Pictet Clean Energy fund.
The share of renewable energies is expected to rise to 40% in 2030, against 8% in 2018. “No president or political program can slow down development if they are cheaper without a subsidy,” he said to mean that even re-election of Donald Trump in the United States will not slow the trend.
A trend beyond energy
“Beyond energy, it is the entire ecological transition that has accelerated, whether in production, distribution or energy efficiency,” said AFP Nicolas Beneton, specialist of sustainable investment at RobecoSAM.
In Europe, it is even time to accelerate, with 30% of the 750 billion of the European Commission's recovery plan dedicated directly to ecological transition objectives.
This change is materializing in particular in the field of mobility, which is at “a breaking point”, according to Mr. Beneton. “When we look at the production of cars, we clearly see a scissors effect: this year will be exceptional for electrified vehicles and very difficult for the traditional industry”.
The manager believes that electrification will develop to improve thermal efficiency and in areas as varied as housing or industrial processes, making it possible to open up his portfolio to these stocks.