Investments in Climate-Themed Funds: Focus on Power Generation
The necessary decarbonisation of the economy creates opportunities for investments in climate-themed funds, says René Nicolodi. The Head of Equity & Themes at the Asset Management of Zürcher Kantonalbank explains in the show "Geld" who the winners of the transformation could be.
Interview with Dr René Nicolodi
Martin Spieler: What impact does climate change have on the global economy?
René Nicolodi: The high concentration of CO2 emissions is causing the Earth to warm increasingly. The International Energy Agency assumes that without strict countermeasures, global warming will increase by 2.4 degrees Celsius by the end of this century. Direct consequences of the temperature rise include extreme weather events, glacier retreat, hunger, and water crises that are worsening. Indirect consequences include increasing health risks, which in turn affect the economy. The economic costs of these damages and risks are estimated to be 38 trillion US dollars by 2050.
Climate change is a global challenge. What benefit does it bring to the climate if Swiss private investors invest in climate funds?
Climate protection requires a societal, but above all, a political framework. If this framework is in place, capital and financial markets can perform very important functions: On the one hand, by allocating capital to companies for the development and provision of solutions against climate change. On the other hand, this will lead to the rapid transformation towards decarbonisation that we need. This requires large investments.
What opportunities does the fight against greenhouse gas emissions and for decarbonisation offer from the perspective of investors?
They benefit from an investment theme that is likely to be structurally and long-term present and could offer very high growth opportunities. At the same time, the rapid decarbonisation that is necessary will create many winners – but also losers. So, it is a theme that investors want to reflect in their overall portfolio. This also from a risk perspective.
In which areas do the greatest investment opportunities for climate-relevant themed funds arise against this background?
From our perspective, the focus is on power generation through renewable energies and energy efficiency in general. This also includes the expansion of energy infrastructure and the electrification of the mobility sector – and generally the efficient use of resources.
How can private investors engage in the fight against climate change and generate returns at the same time?
Climate protection on the private side starts with each individual. There are behavioural components and measures that can be easily integrated into everyday life. On the investment side, investors can send a signal and contribute to the faster realisation of decarbonisation.
For whom is such a climate fund suitable, also from a risk perspective?
There is still an investment risk. Investors are operating in a specialised field and investing in companies that provide specific solutions. These tend to be small and mid-cap companies that also generally exhibit greater risks. Therefore, good diversification is very important. Furthermore, an active approach can be worthwhile, as the theme is very dynamic, competitive, and also influenced by political conditions.
This interview was first broadcast in slightly modified form on 4 April 2025 on the TV programme "Geld" on Tele 1, Tele M1 and TVO (Swiss German only).
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