Last year, in a volatile context for equity markets, Impact investing stocks were subject to some dynamics of their own, especially those in emerging markets. After having suffered more than their developed market peers during the sell-off in March 2020, emerging market stocks staged a gradual rebound over the course of 2020 that became particularly pronounced at the end of the year, driven by expectations of the pandemic coming to an end.
In many cases, impact investing stocks proved to be more resilient than their peers. There are several dynamics underway that set impact stocks apart from mainstream stocks, mainly “green” government policies, regulation and the falling cost of renewable energy.
The latter is due to technological innovation and rising efficiency in the production of solar panels and batteries. In fact, we may be at the cusp of price parity between renewable and non-renewable energy in many markets the world over, which would amount to a paradigm change for many impact stocks, particularly those in emerging markets.
These are just some of the reasons why the subject remains of keen interest for investors, as Jen Gale, founder of the Sustainable-ish blog, and Mathieu Nègre discuss in their latest podcast.