WS Guinness Sustainable Energy

The Guinness Sustainable Energy strategy is managed for capital growth and invests in companies involved in the generation, storage, efficiency and consumption of sustainable energy sources (such as solar, wind, hydro, geothermal, biofuels and biomass).

We believe that over the next twenty years the sustainable energy sector will benefit from the combined effects of:

• Demand growth – The electrification of transportation and improved energy storage economics brings attractive long-term sustainable energy demand growth
• Improving Economics – Sustainable energy sources have become cost competitive with power from fossil fuels; we expect the cost of supply to continue to fall
• Public & Private Support – Both governments and companies are pursuing sustainable energy in order to achieve mandated carbon targets or to improve public perception
• Low current exposure – Poor profitability and need for subsidies has kept the weight of sustainable energy in global indices and broad global equity funds at a low level
• Sustainability Theme – The sustainable energy sector offers 'green' credentials that some investors are targeting to help facilitate global de-carbonisation and to reduce carbon intensity of their portfolios

The Guinness Sustainable Energy strategy is positioned to benefit from the many opportunities associated with the sustainable energy transition. We identify four sub-sectors and have assembled a proprietary investment universe of around 250 companies with critical mass that are most directly exposed to them:

• Displacement: displacement or more efficient usage of hydrocarbon-based energy
• Electrification: the switching of hydrocarbon-based fuel demand towards electricity, especially for electric vehicles
• Installation: the manufacture of equipment for the generation and consumption of sustainable energy
• Generation: the production of sustainable energy, either pureplay companies or those transitioning from hydrocarbon-based fuels

The portfolio comprises around 30 broadly equally weighted positions.