Global Decarbonisation Monthly Report | January
Introducing our climate change ETF
2020 - A Year in Review
- According to the International Energy Agency (IEA),
renewable energy installed capacity increased by 200 GW (a 4% growth), with the
US and China being the two countries adding most new projects. Almost 90% of the new generation capacity added in the year comes from
renewable sources, with 10% still being powered by gas and coal. From 2010 to
2020 IEA estimates that solar capacity increased 18x while wind power increased
4x. The same report projects that India and the EU will be driving even
stronger growth in 2021.
- Covid-caused confinement policies have caused a
transitory emissions reduction. The ICOS estimates that CO2 emissions fell by ~7% in 2020. This is
expected to be a short-lived drawdown. In China, upon relaxation of measures, emissions increased back.
- In September, President Xi Jinping announced
that China committed to reach carbon neutrality by 2060. As the world’s biggest
emitter of CO2e, the announcement is a truly relevant one. The pledge was
surprisedly announced at the UN General assembly.
Countries like China, Japan, Norway, Spain and
France already banned fossil fuel vehicles. In 2020 important markets have made
similar commitments: in September California banned ICE sales from 2035, in
October New York State banned sales of ICEs from 2035 and in November the UK
announced the ban from 2030.
iClima Global Decarbonisation Enablers Index Performance
Past performance is no guarantee
of future performance.
Source: Bloomberg, Solactive, HANetf
*TNR Index, in USD. 12 Month figures based on
2.01.20 -31.12.20. December
Breakdown of Annual
- Our climate change ETF's Green Energy sector was up 17.6% in the
year, with the Renewable Energy Equipment sub-section up approximately 11%
followed by Renewable Energy Assets by approximately 5%.
- The Green Transportation sector was up 34.8% in
the year with the EV & Bikes sub segment being up 34.2%.
- The Sustainable Products sector was up 12.6% in
the year, with Sustainable Buildings, Telepresence, and Efficient Materials
& Processes being the leading subsegments.
The Enabling Solutions sector was up 16.05% in
the year with the Fuel Cell being the best performing subsegment.
- Water & Waste Improvements was up 1% in the
Source of all data: iClima/
The Distribution of the Shares Performance
CLMA is currently comprised
of 151 shares. In 2020, 17 companies had a negative share performance, 43 were
between 0% and 30%, and 91 companies were above 30%. Notably, 39 companies had
shares going up between 120% and 1,200% during the year.
Source: iClima/ Bloomberg
Decarbonisation Enablers Performance Table
As of 31.12.20
iClima Global Decarbonisation Enablers UCITS ETF (Acc)
iClima Global Decarbonisation Enablers Index
Performance before inception is based on back tested data.
Back testing is the process of evaluating an investment strategy by applying it
to historical data to simulate what the performance of such strategy would have
been. Back tested data does not represent actual performance and should not be
interpreted as an indication of actual or future performance. Past performance
for the index is in USD. Past performance is not an indicator for future
results and should not be the sole factor of consideration when selecting a
product. Investors should read the prospectus of the Issuer (“Prospectus”)
before investing and should refer to the section of the Prospectus entitled
‘Risk Factors’ for further details of risks associated with an investment in
this product. Source: Bloomberg / HANetf. Data as of 31/12/2020
Noteworthy Company News & Share Performances in 2020
NIO Inc (NIO, up 1,173%) Often called the “Tesla of
China”, NIO Inc has benefited from fiscal stimulus from the Chinese government
in its attempt to boost sales of EVs. Until November 2020, EV sales in China
reached 1.1 Million units, up 4% year-on-year. Nio’s
Battery-as-a-Service subscription model seems to set it apart and allowed for year-on-year
sales growth over 100%.
Plug Power (PLUG, up 949%) The Upstate NY manufacturer of
hydrogen fuel cells for the electric mobility and stationary power markets is
benefiting from the expected relevance of green hydrogen as a climate change
solution. The company made two acquisitions during the year (of United Hydrogen
Group, a H2 producer, and Giver ELX, a cost-efficient producer of H2
generators) that led management to boost is 2024 sales forecast to $1.2 Billion
and EBITDA to $250 Million.
Tesla (TSLA, up 696%) The 17-year-old Californian
company was constantly in the spotlight in 2020. It closed the year almost at almost 500k EV units sold, a 36% year-on-year increase. The company is building two new vehicle assembly operations in Berlin and
Austin which are expected to start operation by end of 2021, adding to the
production in Fremont (CA) and Shanghai.
Workhorse Group (WKHS, up 544%) The Ohio based maker of
electric commercial cargo vans and drones began targeting the “last mile
package delivery” segment. The $6 billion contract to renovate the US Postal
Service delivery truck fleet was postponed to later in 2021, minding that
targeted truck production for 2021 is 1,800 vehicles. In October they filed for
Federal Aviation approval of its drone integrated to EV product, which may be
granted approval in 2021.
Communications (ZM, up 401%) Not a household name before the COVID crisis, the company
was in position to become a WFH solution and 3Q20 revenue soared 367% Year-on-year,
with net income increasing 11-fold. In December 2019, Zoom had 10
million daily VC participants, which grew to 300 million by April 2020. The end
of the pandemic may reduce demand, but the long-term trend of WFH is expected
Alfen Beheer (ALFEN, up 401%) The Dutch smart grid solutions provider saw very solid revenue growth in
2020. 3Q20 sales grew 46% year-on-year, with smart grids revenue up 23%, EV
charging revenue up 72% and energy storage sales up 488%. Gross margin reported
up 383%) The California residential sunroof is the largest installer and owner
of rooftop solar systems in the USA. Its battery storage system, launched in
mid-2019, has experienced fast growth in the year and the company maintained
its first mover advantage in the Virtual Power Plant as a grid service. The
acquisition of rival Vivint in July is expected to improve sales growth.
Sunnova Energy (NOVA, up 292%) In
December, the direct competitor to SunRun raised capital via an equity offering to acquire further solar equipment.
HelloFresh (HFG, up 229%) Berlin based meal kit
delivery company saw a 120% revenue increase in 3Q20 vs 3Q19 sales and the number
of active customers reached an all-time high of 5 million.
Siemens Gamesa (SGRE, up 115%) and Vestas (VWS, up 122%) both
benefited from tail winds for the wind turbine market. Siemens Gamesa sales
growth puts it on track to dethrone
Vestas as the top wind turbine
installer by 2025.
(REZI, up 77%) The Honeywell International spin off saw demand for
residential thermal and comfort products soar.
Uber Technologies (UBER, up 63%) The pandemic reduced mobility bookings by 50% in 3Q20 vs 3Q19, but
delivery gross bookings grew by 135% year-on-year. In September,
it committed $800 Million to help drivers transition to EV by 2025 and to 100%
EV rides in the US, EU and Canada by 2030.
Outlook for 2021
- Eyes on the US
in January: On January 5th,
Georgia will vote on two Senatorial seats and on January 20th Biden
will be inaugurated as the 46th President of the United States. If
both Democratic Senator candidates win, there will be a tie between both
parties and any ties on votes would be broken by Vice President elect Harris.
These Senate seats will determine if the new administration will have the votes
required in both upper and lower houses to pass Biden’s most progressive
- More clarity
on the US path in February: Biden has
also promised to re-join the Paris Agreement shortly after the inauguration. We
expect to see definition in terms of the climate change agenda that the new
administration will pursue vis-à-vis the outcome of the Georgia election. Biden
ran the campaign saying he would not support the Green New Deal.
moment with EU Parliament in June: EU
leaders have agreed to a 55% GHG reduction target by 2030 but European
Parliament is pushing for a 60% reduction.
- UN will host
COP26 in November: During the first
two weeks of the month, leaders will meet in Glasgow for what is expected to be
the most important COP since the Paris Agreement in 2015. Leaders will report
back on their 5-year progress. The UK will be chairing the G7 group and it is expected
to focus on the post Covid recovery on a green agenda.
iClima Global Decarbonisation Enablers UCITS ETF (CLMA), is a UCITS compliant Exchange Traded Fund domiciled
in Ireland. This is the world’s first climate change ETF that provides
exposure to the performance of companies offering products and services that
enable CO2e avoidance. CLMA is unique because it shifts the focus from
companies’ emission reduction actions, to companies offering products and
services that directly enable CO2e avoidance solutions and shines a spotlight
on climate change innovators.
CLMA tracks the iClima Global
Decarbonisation Enablers Index, an Index designed to measure the performance of
securities from five sub-sectors including green energy, green transportation,
water and waste improvements, decarbonisation enabling solutions and sustainable
products. Please remember that the value of your investment may go down as well
as up and that past performance is no guarantee of future performance
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