Investing.com – Reducing greenhouse gas emissions has become one of the most important topics for investors, both because of the risks associated with the transition to a low-emission economy and because of the huge investment opportunities that open up decarbonisation strategies and new technologies.
According to the International Renewable Energy Agency (IRENA), an investment of $ 131 trillion is needed to fund the energy transition needed to keep global warming below 1.5 ° C by 2050. This equates to an average annual investment of $ 4.4 trillion, or about 5% of world gross domestic product (GDP).
“Renewable energy technologies now dominate the global electricity market, becoming the cheapest source of electricity in many markets,” said Anu Narula, head of global equity at Mirabaud AM (Geneva-based asset manager) in a research note.
Technologies, markets and business models are constantly changing, but companies that know how to find innovative solutions that can be used on a large scale and quickly will have a “significant long-term competitive advantage”, according to Narula.
Here are two companies that, according to Mirabaud’s stock manager, are at the forefront of their decarbonisation ambitions:
Linde PLC (NYSE 🙂 is the world’s leading industrial and engineering gas company. Its business model is to turn purified air and other gases into solutions that help customers improve energy efficiency and resource use.
For example, Narula notes, Linde’s hydrogen helps refineries produce ultra-low sulfur diesel (ULSD), which improves air quality and therefore the environment and human health. Hydrogen is a key factor in the transition to clean energy.
According to the Hydrogen Council, if all projects are implemented, the total investment in green hydrogen in 2030 will exceed $ 300 billion, equivalent to 1.4% of global energy funding. Linde currently has the largest liquid hydrogen capacity and the largest distribution network in the world.
“Linde aims to quadruple its annual hydrogen sales over the next 10-15 years. It has also committed to investing $ 1 billion by 2028 in decarbonisation initiatives, sponsoring technologies that reduce the cost of hydrogen (a major obstacle to its implementation in most countries) and plans to triple production over the same period, ”wrote the head of Mirabaud.
Note that analysts are quite optimistic about Linde shares: 9 analysts out of 11 recommended the purchase, the average target is 330.44 euros, which means a potential growth of almost 19% compared to the current price. In addition, InvestingPro Fair value of Linde shareswhich is based on the result of financial models, is 308.69 euros, which is 11% higher than the current price.
Gaztransport and Technigaz SA
Gaztransport et Technigaz SA (EPA 🙂 is a leading global engineering company specializing in LNG transportation and storage. GTT is constantly working on new LNG storage technologies and solutions for other liquefied gases. The company has its own testing laboratory and is actively involved in research through partnerships with engineering companies, research institutes, laboratories and universities. A large portfolio of patents and constant investment in research and development provide GTT a unique market position.
“GTT also offers new programs for the use of liquefied natural gas (LNG) as a fuel, an emerging market,” Narula said in the analysis.
Demand for LNG is expected to continue to grow beyond 2040, especially in Asia, where countries have limited domestic natural gas production and no infrastructure to transport pipelines. “As LNG is playing an increasingly crucial role in the energy transition, Gaztransport and Technigaz has everything it can get from the development of LNG-based technologies,” Narula said in the study.
Note that analysts are moderately optimistic about the shares of Gaztransport, p 5 out of 8 analysts who recommend buying, with an average target of 129.66 euros, which means a growth potential of almost 9% compared to the current price. On the other hand, the fair value of InvestingPro, which is based on the synthesis of financial models, is 100.17 euros, which is 15% lower than the current price.