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Energy Impact Partners’ Climate Tech Index Shows Sustainability As Profitable

Image Courtesy of Bram Van Oost

Imagine investing in an index that not only produces much higher returns than the broader stock market but also gives you a share of companies on the leading edge of climate-friendly technologies. In fact, such an index already exists. You just can’t invest in it.

The index called the “Climate Tech Index,” was created by Energy Impact Partners (EIP), a New York-based global investment platform. The index is not available for public investment. Instead, it exists as a kind of educational tool designed to demonstrate the breadth of successful companies working on sustainable and climate-focused solutions.

The EIP Climate Tech Index website tracks the stock market performances of more than 30 constituent companies from various geographic regions and across numerous industries, ranging from electric vehicles and renewable energy to biopolymer technologies, energy storage, and plant-based meat.

Electric vehicle giant Tesla is the largest and best-known company on the index. Among other U.S.-based stocks, the top names include Enphase Energy, QuantumScape, Plug Power, SolarEdge Technologies, Sunrun, First Solar, and Beyond Meat.

From a purely financial standpoint, the companies that make up EIP’s Climate Tech Index have easily outperformed the overall stock market. As of March, its gains had nearly tripled those of Nasdaq since the beginning of 2020, rising 127 percent vs. 45 percent for the Nasdaq.

Image courtesy of American Public Power Association

Even though the EIP index only exists as an educational resource, there’s no reason it couldn’t be turned into an exchange-traded fund (ETF) open to investors. As TechCrunch pointed out earlier this year, most ETFs currently on the market are focused on energy production or infrastructure. A fund along the lines of the Climate Tech Index could become the first to track a much more diversified lineup of stocks that provide a wider focus on addressing the changing climate and reducing greenhouse gas emissions.

“As far as we could tell, (there was) nothing that was inclusive of the broader climate tech ecosystem, which includes other sectors such as electric vehicles, plastics recycling, and plant-based meat,” said Shayle Kann, a partner with EIP, told Axios. “We built our index to be able to monitor how the whole crop (so to speak) of climate tech companies performs as the market evolves.”

The companies in the index are not in EIP’s portfolio, though it does have investments in plenty of other eco-friendly companies and products, with more than $1.7 billion in assets under management. The firm’s mission is to bring together entrepreneurs and forward-looking energy and industrial companies to advance innovation.

EIP invests globally across venture, growth, credit, and infrastructure, led by a team of more than 45 professionals with offices in New York; San Francisco; Palm Beach, Fla.; London; and Cologne, Germany. It also has plans to open an office in Oslo, Norway.

One of its most recent transactions, announced on May 6, was a $30 million investment in FLO | AddEnergie, a leading North American electric vehicle charging network operator and a major provider of smart charging software and equipment. 

Two weeks later, EIP led a $10 million, Series A round of financing in Moxion Power, a maker of mobile energy storage systems. Moxion is working to replace fossil-fuel-burning generators with mobile energy storage technology and all-electric equipment rental solutions, with the goal of helping customers reduce the costs of temporary power and decarbonize their operations.

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