The transition from grey to green
The global energy sector is undergoing a profound transformation necessitated by today’s energy and climate emergencies. Human-induced climate change is causing widespread disruption in nature, leading to mounting loss of life and biodiversity, as well as severe economic damage. To mitigate the catastrophic impact of global warming, energy-related CO2 emissions must be reduced in accordance with the 1.5°C warming limit and the Paris Agreement goals.
Renewables will play a critical role in accelerating our transition to net zero: thanks to technological advancements, the costs of renewables have dropped dramatically, making them not only viable alternatives to conventional fuels and a powerful engine for economic growth in the coming decades, but also a means of ensuring energy security. The electrification of the energy system will play a crucial role in decarbonizing the global economy. This means that investments in storage capabilities and materials that enable the energy transition will also need to increase.
"Renewable power frees economies from volatile fossil fuel prices and imports, curbs energy costs, and enhances market resilience."
Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA)
Source: Renewable Power Remains Cost-Competitive amid Fossil Fuel Crisis (irena.org) Retrieved on 25.07.2022.
We believe that three powerful long-term structural growth trends will fuel the evolving energy transition:
Many low-carbon technologies, such as wind turbines or electric vehicles, require large amounts of metals and minerals. To meet the rapidly growing demand for clean energy solutions, the demand for those minerals will skyrocket: according to recent estimates, it is expected to triple by 2040.
Projected total mineral1 demand
As global power systems decarbonize, the demand for electricity is set to increase to enable a reduction in the use of technologies that emit CO2.
The share of electricity in final energy use could more than double
* Other final uses include heat, biomass, hydrogen, and other renewables.
Source: International Energy Agency (2021), Net Zero by 2050. Retrieved on 29.06.2022.
A transition to renewable energy requires significant investment in grid infrastructure. Smart grids improve reliability by providing consistent and responsive power, help reduce carbon emissions by increasing efficiency, and create savings by empowering the consumer to monitor and manage usage.
Smart grids enable structural changes in energy systems
Source: European Renewable Energies Federation et al. (2018), Energy Atlas – facts and figures about renewables in Europe. Retrieved on 29.06.2022.
Watch Dirk Hoozemans, Portfolio Manager, as he explains what makes Energy Evolution such an attractive investment opportunity.
The net-zero transition requires the share of renewables in the global energy mix to exceed the growth in energy demand. As the global population grows, demand for electricity – and, by the same token, for cleaner, more secure, more reliable, and more affordable energy sources – is set to boom. This is further underpinned by geopolitical developments highlighting the need for energy security. The energy transformation offers opportunities for sustained economic development, social inclusion, energy security, improved health, job creation, and other societal benefits.2
It also offers tremendous opportunities for investors with a long-term investment horizon.
The Credit Suisse (Lux) Energy Evolution Equity Fund seeks to benefit from the long-term secular growth trend of energy transition by investing in pure-play3 companies that operate along the entire energy value chain. These companies provide products and services that facilitate the evolving transition from a fossil-fuel-based system to cleaner ways of producing, storing, supplying, and consuming energy. This means that they also contribute to achieving the United Nations Sustainable Development Goals numbers 7 (Affordable and Clean Energy), 9 (Industry, Innovation, and Infrastructure), and 13 (Climate Action).
Additionally, the fund applies exclusions and integrates ESG4 considerations into the investment process following the principles of the Credit Suisse Sustainable Investment Framework.
The investment promoted in this marketing material concerns the acquisition of units or shares in a fund and not of any underlying assets. The underlying assets are owned by the fund only.
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1 Includes chromium, copper, aluminum, battery metals (lithium, nickel, cobalt, manganese, and graphite), molybdenum, platinum group metals, zinc, rare earth elements, and others.
Source: International Energy Agency (2022), The Role of Critical Minerals in Clean Energy Transitions. Retrieved on 29.06.2022.
2 UN (2021). Theme report on energy transition: towards the achievement of SDG 7 and net-zero emissions.
3 We define a pure player as a company in which at least 50% of revenue comes from products and solutions that facilitate the energy transition.
4 ESG stands for environmental (E), social (S), and governance (G). For further information about the ESG investment criteria and the sustainability-related aspects of the fund, please consider the legal and regulatory documents of the fund (e.g. the prospectus) and visit credit-suisse.com/esg. In addition to sustainability-related aspects, the decision to invest in the fund should take into account all objectives and characteristics of the fund as described in its prospectus or in the information which is to be disclosed to investors in accordance with applicable regulations.
Risks
The full offering documentation including complete information on risks may be obtained free of charge from a Credit Suisse client advisor, representative, or, where applicable, via Fundsearch (credit-suisse.com/fundsearch).
This is a marketing communication.
Please refer to the prospectus/information document of the fund and to the KIID/KID (as applicable) before making any final investment decisions.
Source: Credit Suisse, unless otherwise specified.
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