David Harrison, fund manager of the Rathbone Greenbank Global Sustainability Fund, offers thoughts on the US sustainability journey and investment opportunities following President Biden’s first year in office.
“The Joe Biden Presidency brought with it expectations of a much greener and progressive US climate agenda, supported by investment in green infrastructure and a more visible role in the global climate debate. Whilst there has been some disappointment at the inability to pass the ‘build back better’ program into law to date, the US has once again become engaged in the global climate debate – a complete reversal from the Trump years. The importance of this cannot be under-stated given the size of the US economy. Moreover, global net-zero ambitions are heavily reliant on the US playing their part.
“At a US sector and company level, we are also seeing progress, particularly in the areas of vehicle electrification and renewable energy investment. Many US automakers are already pivoting to a full electrification strategy and a large number of new energy production are renewables-based. Whilst we are still relatively early in the US sustainability journey and we do need to go faster, we have seen our investment opportunity set expand significantly in the past 12 months.
“We think the US industrial sector remains attractive in 2022. In particular, we favour those companies exposed to industrial digitisation, vehicle electrification and green infrastructure. In many cases digitisation rates across the industrial landscape are still below 10%, whilst electric vehicle penetration is below 5%. The move to more sustainable infrastructure is also at a relatively early stage in the US.”