Fri Sep 17, 2010 1:00am EDT
China is positioning itself to take advantage of the low carbon economy, propelled by healthy private sector climate-related investments and a favorable political climate.
The country's climate-related revenues in 2009 have put China among the top 10 countries for the first time, according to HSBC's third annual review of its Climate Change Index. Fueling the momentum is a 30-fold increase in private sector investment and targeted climate-related stimulus spending.
"The rapid growth of China's engagement with climate change has been staggering: last year China accounted for over 24 percent of total global investment into the climate change sector, having represented only 6 percent of the total in 2004," Joaquim de Lima, global head of quant research for equities at HSBC, said in a statement this week. "We believe with continued strong investment flow from the private sector, coupled with political leadership, China is now well positioned to move to the forefront of developments in the emerging low carbon economy, which should ultimately feed into the future growth of its own economy."
The HSBC launched its Climate Change Index in 2007. It is now comprised of 367 companies providing climate related goods and services, a 140 percent increase since 2004. The index only includes companies whose engagement in climate-related products and services is meaningful to their revenues.
As a whole, its climate-related revenues totaled $530 billion in 2009. Revenues declined 0.9 percent, compared to the revenues of the 2,400 companies that make up the MSCI ACWI (All Country World Index) slid 3 percent over the same period.
HSBC favors the energy efficiency and energy management subsector for particularly strong growth.
"Energy efficiency and energy management remain absolutely key: Not only has the sub sector performed well, but we predict that it is likely to continue to do so next year, as the 'low hanging fruit' and a beneficiary of further stimulus spend," Vijay Sumon, an HSBC Global Research index specialist, said in a statement. "We see it as a 'no regrets' option, as it makes sense for businesses regardless of climate change."
