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Understanding the European Green Deal: A path to sustainable investment

The European Green Deal stands as a comprehensive framework of policies and initiatives aimed at reducing emissions by at least 55% by 2030 and achieving carbon neutrality across the continent by 2050.

The companies featured in this article are to exemplify several thematic transitions occurring in this sector presently. It is important to note that they are not intended as investment recommendations. While Arbuthnot Latham does not directly include these stocks in our main portfolios, there may be indirect ownership through funds acquired on behalf of our clients.

This ambitious transformation requires an estimated expenditure of EUR 1 trillion by member states to finance the Green Deal's objectives. As new funding frameworks emerge to facilitate positive change, opportunities for innovation and investment naturally arise. Businesses offering innovative solutions and contributing to a more sustainable future are poised to benefit from this financial influx, as demand for their products and services is expected to grow.


Exploring investable themes

As members of the Investment Committee, we continually seek out exciting and investable themes. Megatrends, which evolve over time, present avenues for investor returns. The European Green Deal specifically highlights opportunities in clean energy, sustainable mobility, and the circular economy, among others. Understanding how these megatrends will unfold is essential for forward-thinking investors. Delving into companies aligned with these trends provides deeper insights into the investment potential of these themes.


Company spotlight: Sika

Sika, a specialty chemicals company, plays a pivotal role in enabling greater environmental compatibility within the construction and vehicle industries. Noteworthy is Sika's significant progress in developing water reducers for concrete, saving over 6 billion litres of water annually. Additionally, their research aims to optimise cement production, thereby reducing carbon footprint and raw material usage. As the need for achieving net-zero emissions grows, Sika's innovative solutions position it well to capitalise on emerging investment opportunities.


Company spotlight: Infineon

Infineon, a semiconductor manufacturer, aligns with the theme of a sustainable future through its focus on clean energy and efficient transport networks. Their products, integral to electric and autonomous vehicles, are crucial for the European Commission to meet its emissions targets. Infineon's contributions to sustainable mobility highlights its potential for investors seeking exposure to the green economy.


Company spotlight: Energiedienst

Energiedienst comprises a portfolio of companies supplying customers with renewable energy, primarily generated from hydroelectric power. Over the years, the business has diversified its operations to offer solutions for energy production via solar panels, as well as improving consumption efficiency through smart metering systems and heat pumps. Companies like Energiedienst play a pivotal role in expanding the accessibility of environmentally friendly power generation, presenting compelling investment opportunities in the renewable energy sector.


Navigating challenges

Despite its transformative potential, the European Green Deal faces criticism and challenges. Political opposition within Europe, particularly regarding the "Farm to Fork" strategy, and concerns over potential competition from US subsidies pose hurdles. However, the Green Deal encapsulates powerful long-term global trends, promising significant transformation and creating ample investment opportunities for forward-thinking investors.

In conclusion, the European Green Deal represents a landmark initiative driving sustainable development and offering lucrative investment prospects. By understanding its objectives, exploring investable themes, and identifying companies aligned with its goals, investors can position themselves to benefit from the transition to a greener economy.

At Arbuthnot Latham, we offer a range of portfolio solutions to suit our clients own financial and personal goals. Talk to us today about our sustainability portfolio, or wider product range, if you would like to learn more.



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Author -

George Rudland

George Rudland

Senior Investment Manager

George Rudland, Senior Investment Manager, joined Arbuthnot Latham in 2021. George leads the European Research desk, and he is a voting member of the Sustainable Portfolio Service Investment Committee.

George is Chartered Wealth Manager - Level 7. He also holds the IMC, IAD and a BA (Hons) in Economics and Geography. George was recognised as one of the PAM NextGen leaders of 2024.

In his spare time, George enjoys cycling and outdoor pursuits.


This communication should be considered a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments, and the income from them can fall as well as rise, and may be affected by exchange rate fluctuations. Investors could get back less than they invest. Past performance is not a reliable indicator of future results. The tax treatment of investments depends upon individual circumstances and may be subject to change.

The contents of this communication are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.