Invest in Innovations in Clean Energy and Resource Efficiency With GSFP | ETF Trends

Increasing energy efficiency is key for decarbonization, unveiling an impactful, lucrative opportunity for investors.

Goldman Sachs Global Investment Research anticipates energy efficiency savings of as much as 40% by 2050 in the residential, services, and industrial markets as a result of building efficiencies, smart cities, and other initiatives.

According to the IEA, buildings account for 36% of global energy use. The agency attributes around 40% of global greenhouse gas emissions to residential and commercial buildings, with the absolute number growing as construction activity increases.

Building efficiency improvements is a $300 billion opportunity, with a long runway for growth, according to a recent report from Goldman Sachs. Certain advances including the Leadership in Energy and Environmental Design (LEED) certified buildings, energy-efficient washers and dryers, and LED lighting options have all become more prevalent in recent years.

Rapid advancements in technology have enabled cities to become “smarter” in managing how they monitor the power grid during storms or even in how they collect garbage. Smart cities, driven by IoT, not only have the potential to be a huge global growth opportunity for investors but also show promise for a wide range of benefits – including alerting utilities of power outages during storms, according to the report from Goldman Sachs.

One of the companies advancing energy efficiency is Kingspan Group, which provides building materials and solutions to reduce energy consumption in residential and commercial buildings. The Ireland-based company is a holding in the Goldman Sachs Future Planet Equity ETF (GSFP), weighted at 0.76%*, according to VettaFi. 

Kingspan’s products include thermally efficient and airtight insulated panels as well as rigid insulation boards, which together saved 192.7 million MWh of energy, 38.15 million tons of CO2, and more than $5.25 billion in energy costs in 2018, according to Kingspan, 2021. 

The company’s insulation panel technology, QuadCore, assists in the manufacture of self-blended hybrid insulation panels with increased thermal efficiency, which enables greater energy conservation. The company uses plastic bottles in the insulation systems, currently using 256 million bottles, and planning to use 500 million bottles in insulation systems by 2023.

Offered insulation systems have helped save energy equivalent to 110 million barrels of oil, the annual output of 66 power stations, 4.7 times the annual electricity consumption of greater London, and energy utilized by 20 million cars on the road in 2018, as related to sales of insulated panels and insulation boards between 1993 and 2018.

ABB Ltd., weighted 1.98%* in GSFP, is a multinational corporation focused on electrification, process automation, robotics & discrete automation, and motion, and the world’s largest supplier of EV charging systems. Its high-powered electric fast chargers for cars can provide charge for 100 kilometers in just four minutes.

Buildings produce close to 1/5th of the world’s total carbon emissions and HVAC systems are responsible for 45% of commercial building energy consumption. ABB’s artificial intelligence solution has the potential to optimize HVAC (heating, ventilation, and air conditioning) control, resulting in up to 25% energy savings in the first 3 months, increasing net operating income, and improving energy use intensity. 

If ABB’s energy management solutions were used in 100% of industrial plants and 100% of cities in Germany, it could save 79.28 million tons of CO2 emissions.

In addition to resource efficiency, GSFP invests in companies that seek to provide solutions to environmental problems aligned with key themes including clean energy, sustainable consumption, the circular economy, and water sustainability.

Launched in 2021 as the firm’s first transparent, active ETF, GSFP invests in companies that are on the right side of the climate transition and have a positive impact on the future planet, according to a 2021 statement from the firm. 

*As of the end of Q2 2022.

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