The 55th Earth Day takes place today (22 April 2025) with the theme of ‘Our Power, Our Planet’, calling for action to triple clean electricity generation by 2030.
According to the International Energy Agency (IEA), the deployment of renewables for electricity generation, for heat production for buildings and industry, and in transport is one of the main enablers of keeping average global temperature rise below 1.5°C.
However, while 2023 was a record year for renewable electricity capacity growth, non-bioenergy renewables need to increase their share of total energy supply from close to 6% today to approximately 16% by 2030 in the IEA’s Net Zero Emissions by 2050 Scenario. To achieve this, annual renewable energy use must increase at an average rate of about 15% through to 2030, close to quadruple the average growth in the past five years.
To mark Earth Day, PA Future asked investment experts to share their thoughts about how to increase renewable energy capacity and what Earth Day means to them.
How sustainable are your choices on Earth Day?
Tom Morris Brown, portfolio specialist, Impax Environmental Markets
Earth Day falls just as British springtime breaks into its stride. As the pagans knew, this is when a new year really begins. Buds blossom, plants awake and a fizzing energy fills each morning.
In this spirit, Earth Day challenges us to think about small changes we can make for the good of our planet. Many of these feel like the ‘right’ thing to do – cut down on food waste, take more public transport, or switch to renewables. Financially, we might choose to buy some more ‘sustainable’ funds, however you choose to define them.
Yet like our New Year’s resolutions, these bursts of good intent often fizzle out. No sooner are the daffodils trimmed back than the disposable barbecues appear. In investment land, the merest whisper of ‘Sell in May’ can prompt the question: “Do I really want this green stuff?”
Identifying changes is a key skill for portfolio managers. Yet distinguishing between short-term fads and structural shifts can make all the difference between buying a dud or investing in the next transformational trend. The changes we make on Earth Day will only endure if they appeal to our self-interest, as well as our sense of virtue.
It’s for this reason that Impax Environmental Markets looks to invest in companies whose products and solutions are not just environmentally but operationally superior. For example, one of our holdings, Monolithic Power Systems – a provider of thermally efficient semiconductors – is instrumental in delivering energy and carbon savings for its customers. Yet customers would not embrace them if Monolithic’s integrated circuits did not also deliver the market-leading power management they desire.
The Trust itself is similar. Since launching over two decades ago, Impax Environmental Markets’ fundamental goal has been to provide market-beating returns over the long run, and innovative companies addressing environmental issues or resource challenges provide us with an ideal opportunity set to deliver this. It is this combination that has enabled us to take on the SDR ‘Impact’ label.
Earth Day, then, should serve as a reminder not to chase what can’t be sustained, whether in our personal consumption or our investments. Ultimately, the most enduring changes are the ones we can live with for the long term.
A holistic, systems-based approach is required
Gabi Slemer, investment director, Octopus Investments
As we reflect on what Earth Day represents and this year’s theme of renewable energy, it reminds us of the importance of holistic action. This year, the call to action is that we must increase our reliance on renewable energy, but this goes hand in hand with the need to decarbonise our supply chains. Not only that, but we also must protect ecosystems and avoid deforestation and invest in new technologies to permanently remove carbon from the atmosphere, using nature to sequester carbon dioxide. It’s not just one thing we need to focus on to protect our planet – we need to do everything together. These things aren’t mutually exclusive but revolve around the same broader goal to halt or reverse climate change, to limit global warming, and to protect our ecosystems and their biodiversity.
“Energy helps the world run, but can we focus on getting it from renewable sources that are kinder to the environment? Food fuels our bodies, but can we farm with regenerative practices that nourish both our bodies and our soils? Timber can provide housing, and furniture, and the floor we walk on, but can we rely on wood from trees that are managed sustainably and replanted?
Up until recently, when we say natural resources, we’re often thinking about the outputs that the earth provides and how they can benefit us, but the narrative is shifting. How can we continue to use the raw materials we’ve grown accustomed to in modern life and protect our planet? The solution requires a holistic, systems-based approach and requires us to rethink how we invest in rebuilding our planet’s natural capital, so that we can reap the dividends of a healthy planet for generations to come.
A £50bn investment opportunity
Philip Kent, CEO, Gravis
The UK’s renewable energy sector has made impressive progress over the last 15 years. In 2010, the country’s energy mix primarily relied on coal and gas. Today, renewables account for over 50% of the UK’s electricity generation. The offshore wind sector is poised for continued growth, with the UK targeting 60 gigawatts (GW) of offshore wind capacity by 2030, up from 15GW today. Onshore wind and solar PV will also contribute to the UK’s future energy mix, with 50GW of solar PV planned by 2030.
However, while wind and solar have led the charge, other technologies must be scaled up to meet the UK’s decarbonisation targets. Looking ahead to 2050, the country will need to decarbonise not just its electricity grid but also its heat and transport sectors. Meanwhile, electricity demand will likely double by 2050, driven by the electrification of transport and heating, the rise of digitalisation and associated increases in demand for energy to power data centres.
These goals will require significant investment in technology, infrastructure and human capital. This next phase of growth will require a dramatic increase in investment, with a £50bn annual investment gap until 2050. This is a unique opportunity for those willing to invest in clean energy technologies and infrastructure.
The challenge is not just to meet demand, but to ensure that the technologies required to support decarbonisation are available at the scale needed.
