Is Your Portfolio Ready for ESG Innovation? | ETF Trends

Growing focus on sustainability and climate change in 2021 saw an influx into environmental, social, and governance funds in 2021 by investors. With ESG funds going mainstream last year and expected to continue to expand this year, innovators and innovation will continue to push the space forward, believes the Fast Company Impact Council, Fast Company reports.

The council is by invitation only, and members includes the leaders and movers and shakers from a variety of industries, such as top leadership from AARP, Insight Global, Morgan Stanley, BlackRock, Meta (formerly Facebook), Paypal, and many more.

The general consensus of the council is that companies will continue to push ESG agendas and practices to the forefront in 2022, alongside growth and profitability. An environment of cultural, regulatory, and business factors will all contribute to this increased focus on sustainability across industries, leading to even more adoption and further growth within the space.

All of this will be made possible by the continued innovation within technology and science that will help propel both companies and consumer products forward, as well as transparency tool adoption by companies, believes Caroline Brown, managing director of Closed Loop Partners. Brown sees a “a continued growth in emerging circular business models on all levels of corporations, allowing companies to take better advantage of materials and products, increasing loyalty with consumers and lessening their environmental footprint.”

“Climate tech, entrepreneurship, and deep tech innovation are on the rise to tackle the biggest challenges that humanity faces. It is crucial for large companies, as well as startups, to launch new products, not only with their target customers in mind, but also with other stakeholders and equity in mind,” said Andrea Carafa, emergence fellow at Stanford University and director of Blackstone Launchpad.

Innovation will come from all fronts, from universities helping to guide and create the next wave of technology products, to the creation of better tools to address climate change that utilize the Internet of Things, said Brad Lukanic, CEO of CannonDesign.

“Built environments in 2022 are going to be supercharged for change, partly because about the agile need for interaction Tools for addressing climate change are also going to be front and center. We have better tools connected to the Internet of Things that are going to be able to measure and make things more accountable in built environments,” Lukanic explained.

Investing in Innovation Within Clean Energy With CNRG

For investors looking to invest in inherently ESG companies, one such option is a pure play based on the clean energy sector, which has continued growth opportunities as companies seek to find more environmentally efficient ways to reduce carbon emissions and run their businesses.

The SPDR S&P Kensho Clean Power ETF (CNRG) invests in clean energy and tracks the performance of the S&P Kensho Clean Power Index.

This benchmark combines artificial intelligence with a quantitative weighting methodology to invest in global stocks that drive innovation in the clean energy sector concerning both products and services. This includes firms manufacturing technology used for renewable energy and companies that have services and products related to the generation and transmission of renewable energy and supply chain companies.

CNRG allocates 19.07% of its portfolio to electrical components and equipment companies, 14.97% to electric utilities, 12.73% to semiconductors companies, and 9.72% to renewable electricity.

CNRG has an expense ratio of 0.45% and AUM of $357 million.

For more news, information, and strategy, visit the ESG Channel.