Following up on the previous blog’s theme on the importance of converting operational sustainability metrics to business fundamentals… In the past 5 years, climate/sustainability-focused equities were following the 1990s dot-com path – “meme-like” valuation growth without reasonable underlying business fundamentals. That’s changed. MSCI posted their Five Takeaways for Investors from Climate Week NYC 2025 and one takeaway mirrors a theme mentioned in practically every other Climate Week 2025 summary I’ve seen:
Sustainability/climate aspirations, targets and disclosures aren’t winning. Investors and operating companies now demand these initiatives make money. It’s about revenue, cost management, margin and ROI.
“Investors are increasingly focused on where money is made and lost as fossil fuels give way to renewable energy and electrification…
‘There’s been a real reality check around investing,’ noted a consultant, citing a continuous emphasis on value creation and ‘a lot of technology already in the money.’
Private capital is flowing where the economics work. Apollo has poured billions into grid modernization and has invested in energy-efficient cooling for data centers.”
“Investors are increasingly focused on where money is made” – this shouldn’t be a surprise. Business fundamentals rule, even in sustainability – otherwise sustainability-related investment strategies can just be considered meme stocks. Who wants their sustainability programs to be the basis for their company meme?
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