Erin Bigley, CFA| Chief Responsibility Officer

David Wheeler, CFA| Portfolio Manager—Sustainable Climate Solutions; Senior Research Analyst—Sustainable Thematic Equities

Kent Hargis, PhD| Chief Investment Officer—Strategic Core Equities; Portfolio Manager—Global Low Carbon Strategy

Transcript

Erin Bigley: As equity investors hunt for opportunities, why should they consider climate-focused investing?

Kent Hargis: We see plenty of investments growing in both energy transition, through wind and through solar, also through the growth of electric vehicles, and we expect that to grow much faster than the market over the course of the next 10 years. We also see that in the private sector is supporting or complementing the public sector.

Erin Bigley: David, what are you seeing?

Dave Wheeler: I see government policies, I see technological innovation, I see capital flows really lining up behind the need to address climate change. And so when I think about the investment opportunities, certainly companies that provide solutions to climate challenges should see strong tailwinds for their businesses in the years ahead.

Kent Hargis: So really it is more than just excluding companies that have risk to climate change. It really is taking advantage of those opportunities.

Erin Bigley: How has the landscape for climate-focused investing changed over the past year or so?

Kent Hargis: The US has increased investments in renewables, solar and wind, with the aim of reducing carbon emissions by up to 40%. We also see on the European side, an attempt of similar spending, again focused on increasing renewables. The changes and the constraints here are really around permitting and actually getting the project started, and we're also seeing some advancements and some relaxation of some of the rules to move forward, it's actually getting some of these investments started and getting along the path that we're all aiming for.

Erin Bigley: We've just come out of COP 28. What sort of impact do you think that will have on climate-focused investing?

Dave Wheeler: When I think about not only COP 28, but other policy developments going on around the world, we're really seeing an alignment of political consensus around the need to address climate. And I think they'll result in accelerating capital into solutions to help address the challenges.

Erin Bigley: So can climate-focused strategies perform in a challenging environment?

Kent Hargis: We feel that investing in companies that are very high quality, that are at attractive prices, those companies will do quite well in this environment. So we like companies that have operational excellence, those companies that are still innovating on the quality side. We like companies that have less leverage, those that have very extended pipelines many years out in the future. And those companies that are more diversified in their customer base, so less exposed to a single client to reduce the risk of mispricing or causing issues with profitability.

Dave Wheeler: One thing that I think about is capital going in is not dependent upon economic growth and cycles. For example, over the last four years, which has been pretty bumpy, we've seen the amount of capital going into decarbonization double over that period. So we're seeing secular growth in this area that shouldn't be vulnerable to economic slowdown.

Erin Bigley: So how do you see this space evolving over the next several years?

Dave Wheeler: Along with high inflation, supply chain bottlenecks, rising interest rates, those have been headwinds to performance in climate investments. But as we move forward, I think those are going to move into the rearview mirror and it'll be smoother sailing for climate-related investments.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams. Views are subject to revision over time.

Learn more about AB’s approach to responsibility here.

AllianceBernstein

AllianceBernstein

AllianceBernstein (AB) is a leading global investment management firm that offers diversified investment services to institutional investors, individuals, and private wealth clients in major world markets.

To be effective stewards of our clients’ assets, we strive to invest responsibly—assessing, engaging on and integrating material issues, including environmental, social and governance (ESG) considerations into most of our actively managed strategies (approximately 79% of AB’s actively managed assets under management as of December 31, 2024).

Our purpose—to pursue insight that unlocks opportunity—describes the ethos of our firm. Because we are an active investment manager, differentiated insights drive our ability to design innovative investment solutions and help our clients achieve their investment goals. We became a signatory to the Principles for Responsible Investment (PRI) in 2011. This began our journey to formalize our approach to identifying responsible ways to unlock opportunities for our clients through integrating material ESG factors throughout most of our actively managed equity and fixed-income client accounts, funds and strategies. Material ESG factors are important elements in forming insights and in presenting potential risks and opportunities that can affect the performance of the companies and issuers that we invest in and the portfolios that we build. AB also engages issuers when it believes the engagement is in the best financial interest of its clients.

Our values illustrate the behaviors and actions that create our strong culture and enable us to meet our clients' needs. Each value inspires us to be better: 

• Invest in One Another: At AB, there’s no “one size fits all” and no mold to break. We celebrate idiosyncrasy and make sure everyone’s voice is heard. We seek and include talented people with diverse skills, abilities and backgrounds, who expand our thinking. A mosaic of perspectives makes us stronger, helping us to nurture enduring relationships and build actionable solutions.
• Strive for Distinctive Knowledge: Intellectual curiosity is in our DNA. We embrace challenging problems and ask tough questions. We don’t settle for easy answers when we seek to understand the world around us—and that’s what makes us better investors and partners to our colleagues and clients. We are independent thinkers who go where the research and data take us. And knowing more isn’t the end of the journey, it’s the start of a deeper conversation.
• Speak with Courage and Conviction: Collegial debate yields conviction, so we challenge one another to think differently. Working together enables us to see all sides of an issue. We stand firmly behind our ideas, and we recognize that the world is dynamic. To keep pace with an ever changing world and industry, we constantly reassess our views and share them with intellectual honesty. Above all, we strive to seek and speak truth to our colleagues, clients and others as a trusted voice of reason.
• Act with Integrity—Always: Although our firm is comprised of multiple businesses, disciplines and individuals, we’re united by our commitment to be strong stewards for our people and our clients. Our fiduciary duty and an ethical mind-set are fundamental to the decisions we make. 

As of December 31, 2024, AB had $792B in assets under management, $555B of which were ESG-integrated. Additional information about AB may be found on our website, www.alliancebernstein.com.

Learn more about AB’s approach to responsibility here.

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