Some of the largest U.S. banks are investing in alternative energy. Investors can also play the rising growth in renewables through clean energy sector-related exchange traded funds.
For starters, the Guggenheim Solar ETF (NYSEArca: TAN) and the Market Vectors Solar Energy ETF (NYSEArca: KWT) track global solar photovoltaic panel producers. The First Trust Global Wind Energy Fund (NYSEArca: FAN) focuses on the wind industry
ETF investors can also track the broader green energy industry through the PowerShares WilderHill Clean Energy Portfolio (NYSEArca: PBW) and First Trust NASDAQ Clean Edge Green Energy Index Fund (NasdaqGS: QCLN), which both track broad exposure to U.S. clean energy companies, including solar photovoltaics, biofuels and advanced batteries.
Additionally, the Market Vectors Global Alternative Energy ETF (NYSEArca: GEX) and PowerShares Global Clean Energy Portfolio (NYSEArca: PBD) cover global clean energy companies. [Renewable Energy ETFs Look Like a Good Long-Term Play]
On Monday, six companies, including JPMorgan Chase (NYSE: JPM), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS), pledged to cooperate to raise investments in renewable energy, reports Jacob Pramuk for CNBC.
The six financial firms also urged governments to push clean power sources and combat “significant” economic risk from climate change ahead of talks at the Sustainable Innovation Forum in December.
“Policy frameworks that recognize the costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low carbon energy and create jobs,” the Wall Street banks said in a statement.
Many firms have already been investing into clean energy projects in recent years. For instance, Citi wants to allocate $100 billion to environmental finance over the next 10 years and Wells Fargo has invested $52 billion in environmental efforts since 2005.
The shift into renewables may also be seen as a way for large banks to diversify their portfolios, which are heavy in fossil fuel – the largest U.S. banks are among the top financiers of the coal industry. Nevertheless, the firms acknowledged that they are in a position to shape the energy industry ahead.
“Part of us feels like we’re enablers of what gets done in the world,” Valerie Smith, director and head of corporate sustainability at Citigroup, told CNBC.
PowerShares WilderHill Clean Energy Portfolio
For more information on the renewables industry, visit our renewable energy category.
Max Chen contributed to this article.