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Goldman Sachs Likes Tesla and These Other Climate-Friendly Stocks

November 30, 2015

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Electric carmaker Tesla Motors (TSLA), lithium supplier Albemarle (ALB) and solar-panel efficiency specialist SolarEdge Technologies are among winners from a growing focus on emissions as climate-change talks get under way, Goldman Sachs told clients.

As world leaders gathered for a landmark climate pact in Paris on Monday, the U.S. investment bank’s analysts wrote in a note that a breakdown in negotiations was unlikely and any agreement would be hailed as a success.

As part of the summit, Microsoft(MSFT) co-founder Bill Gates is launching a multi-billion-dollar clean energy research and development initiative with heads of state, the French government said on Friday. Gates and a group of developing and developed countries will start the Clean Tech Initiative.

Goldman’s pick of stocks exposed to the $600 billion low-carbon economy included low-emissions lighting stocks like Acuity Brands (AYI) or Germany’s Hella as well as tiremaker Continental.

Shares of SolarEdge were among the biggest gainers from Goldman’s note, rising 2.1% to $19.49 in late-morning U.S. trading. Acuity Brand was up 0.5% at $232.64. Tesla shares were flat at $231.64 and Albemarle was up 0.9% at $53.59.

European premium turbine manufacturers Vestas, Nordex and Gamesa are also long-term winners, Goldman said.

Meanwhile, Moody’s warned that environmental risks would weigh on the credit quality of almost a dozen industries including mining, steel, building materials and oil and gas.

“Whether in autos, capital goods, basic materials, or utilities, both the opportunities and risks associated with spreading low carbon technologies and tightening emissions regulations have become too big to ignore,” Goldman Sachs said.

World leaders were meeting in Paris on Monday to launch an ambitious attempt to hold back the earth’s rising temperatures, urging each other to find common cause in two weeks of bargaining meant to steer the global economy away from dependence on fossil fuels.

Barclays last week backed European renewable energy and engineering stocks like Vestas Wind Systems, ABB and Schneider Electric as relative winners if the talks had a successful outcome.

Goldman said the possible opportunities offset the challenges of competition, subsidy-induced volatility and rapid technology developments.