In Wake of Ida, Sustainable Infrastructure Spending Could Get Boost

Hurricane Ida devastated New Orleans, leaving the city without power indefinitely. The remnants of Ida went on to pummel the East coast, causing tornados and flash floods in New Jersey and New York. The storm has highlighted the need for climate-resilient infrastructure.

As Congress prepares to vote on a massive infrastructure bill, investors have a serious opportunity to be part of a sustainable future. The bill still has many hurdles, as the progressive wing of the Democratic party is pushing for a separate, $3.5 trillion bill aimed at addressing climate change and Republican members of Congress remain skeptical on the bill, but the need for sustainable investment is starting to become universally acknowledged.

“If we’re going to make our country more resilient to natural disasters wherever they are, we have to start preparing now,” Senator Bill Cassidy (R-La.) said Monday on CNBC. “I’m sure hoping that Republicans look around my state, see this damage and say, ‘If there’s money for resiliency, money to harden the [power]grid, money to help sewer and water, then maybe this is something we should be for.’”

The Putnam Sustainable Future ETF (PFUT) focuses on companies that are creating solutions to sustainability challenges. Companies innovating on solutions to the complex problems faced by climate change have tremendous growth potential, and ongoing weather-related disasters are only going to push governments to invest in sustainability more actively. These are companies that stand to benefit greatly from sustainable infrastructure spending.

As it stands, the current version of the Biden Infrastructure bill has earmarked funds to be allocated over the next eight years to support more electronic vehicles in the US, upgrade the electric grid, and improve the water distribution infrastructure of the country. This could fuel a long ESG bull market.

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