A Spending Spree in ‘23 – But Profitable? Selectively Maybe

C-MACC Weekly “CRETER” (Climate etc.)

A Spending Spree in ‘23 – But Profitable? Selectively Maybe

• More money will pour into energy transition and broader sustainability in 2023 than in 2022, but this does not mean it’s investible – profits could be scant.
•  Investments and announcements of investments surged in 2022, and all sectors underperformed except wind and solar, which had a post-IRA 2H rally.
• Cost inflation will likely be a significant distraction in 2023, especially for wind, solar, and storage, and price increases here could deter some investments.
• Hydrogen has less inflationary pressure, but demand could disappoint for equipment as renewable power is elusive and costs rise. Costs will also impact EVs.
• We like the water sector as a steady gainer and some biofuel and biomaterial companies because they could be acquired in 2023.

See PDF below for all charts, tables and diagrams