NASA carbon capture site
Source: Getty Images

Riding the Eco-Wave with Climate Tech Stocks

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Oct. 21 2021, Published 1:01 p.m. ET

Tech kingpin and Microsoft head Bill Gates attended the virtual SOSV Climate Tech Summit and spoke about the climate tech industry. "There will be, you know, Microsoft, Google, Amazon-type companies that come out of this space," Gates said, touting his own 1975-founded company as a blueprint for startups of the future.

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Not all those companies are ready for the public market, but some have already infiltrated impact investor portfolios. These climate tech stocks are leading the charge.

What does Gates know about climate tech?

Gates isn't sitting on the sidelines waiting for climate tech innovators to come along. He and his fellow billionaires invest in clean tech through his company Breakthrough Energy Ventures.

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So far, BEV has invested in companies such as AeroSeal, BioMilq, Carbon Cure, Form Energy, KoBold Metals, QuantumScape, and WeaveGrid, along with numerous other climate tech startups.

NextEra Energy (NEE)

NextEra Energy (NYSE:NEE) is the global leader in wind and solar energy. That trend is set to continue, with plenty of signed agreements on the company's docket. By 2023, NextEra plans to increase its EPS by 6–8 percent. Those sweet earnings are also expected to grow by 10 percent annually at least through next year. NEE shares are up 13.35 percent year-to-date, and experts project long-term growth.

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Brookfield Renewable (BEPC)

Renewable energy leader Brookfield Renewable (NYSE:BEPC) is an industry leader in hydroelectric, wind, and solar energies as well as energy transition. Brookfield also focuses on carbon capture. In partnership with Trane Technologies (NYSE:TT), it offers unique decarbonization-as-a-service. BEPC stock is down 31.08 percent in 2021, but it shows long-term potential.

The iShares Global Clean Energy ETF (ICLN)

The iShares Global Clean Energy ETF (ICLN) is a diverse array of clean energy assets including Plug Power, Enphase Energy, and Verbund AG. It holds 77 companies in total and maintains a low expense ratio of 0.42 percent. Currently trading at $23.72, its shares could eventually surpass their $33.16 peak from Jan. 2021.

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Global X Autonomous & Electric Vehicles ETF (DRIV)

The Global X Autonomous & Electric Vehicles ETF (DRIV) holds clean tech car companies as well as software and hardware companies working in self-driving technology. Its holdings include Microsoft (which is working on tech for GM's electric lineup), Nvidia, Tesla, and Plug Power. Currently trading at $29.12, DRIV shares have risen 28.2 percent in 2021, and have seen even more impressive growth since March 2020.

KFA Global Carbon ETF (KRBN)

The KFA Global Carbon ETF (KRBN) tracks the IHS Markit Global Carbon Index, which follows the most-traded carbon credit futures contracts and prioritizes companies practicing cap-and-trade in major European and North American programs. Top holdings include Sunrun, Consolidated Edison, and Vestas Wind Systems. KFA shares are currently trading at $40.22 and had risen 58.35 percent year-to-date as of Oct. 21, 2021.

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What climate tech is not

Recently, fossil fuel giant Total Energies (EPA:TTE) was accused of not doing enough about climate change. According to EuroNews, "They uncovered research published in the Total journal in 1971 which explained that burning fossil fuels resulted in 'the release of enormous quantities of carbon dioxide.'" TTE has been harping on its slow-but-steady transition to cleaner forms of energy. In reality, it plans to increase fossil fuel production moving forward.

Climate tech is not overinflated projections from CEOs. It's real action, and people are discovering whose efforts are merely a facade.

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