In this article, we take a look at the 10 Best Climate Change Stocks to Buy Now.
Investors are focusing on companies driving the transition to a low-carbon economy. Climate change stocks, as defined by the Climate Change Collective, are linked to renewable energy, electric vehicles, and carbon capture technologies. These stocks operate in the reduction of the Greenhouse effect, global warming, and overall carbon emissions.
The past year has been a defining one for ESG investing. The Corporate Sustainability Reporting Directive (CSRD) in Europe and the adoption of the International Financial Reporting Standards for Sustainability (IFRS) across multiple countries have pushed corporate sustainability disclosures forward. However, political and economic headwinds have also emerged. According to Forbes, ESG mentions in U.S. corporate reports peaked in 2023 and have since begun to decline, reflecting a more complex regulatory and market environment.
In the United States, the stock market is navigating an intricate landscape shaped by economic slowdowns and shifting political dynamics. With private sector debt shrinking by 2.4% of GDP in late 2024—the steepest contraction since the 2008 financial crisis. Bloomberg reports that while the broader sustainable debt market faces challenges, a $1.8 trillion segment, backed by U.S. government agencies, continues to thrive. The demand for social bonds, which finance projects in healthcare, housing, and education, has surged by 130% globally, rivaling the traditionally dominant green bond market.
Global investment trends indicate a strong commitment to climate action. Reuters reported that energy transition investments surpassed $2 trillion in 2024 alone, underscoring the financial scale required to reach net-zero emissions by midcentury. Meanwhile, Shell forecasts an annual growth of 4-5% in LNG sales over the next five years, driven by expectations of a 60% increase in global demand by 2040. However, political shifts have also impacted climate stocks—Donald Trump’s return to the White House has led to a dip in European clean energy stocks, as investors anticipate possible rollbacks in U.S. climate policies.
Green finance is gaining momentum, but challenges remain. BloombergNEF Energy Transition Investment Trends estimates that to achieve net-zero emissions by 2050, annual energy transition investments need to reach $5.6 trillion between 2025 and 2030. Currently, investments stand at just 37% of this target, signaling a vast growth potential in climate-focused sectors. Green bond issuance, a key driver of climate finance, hit $575 billion in 2023, with strong contributions from Europe, though U.S. issuers saw a decline. The World Economic Forum’s Fostering Effective Energy Transition 2023 report highlighted the need for trillions in annual investments to meet climate goals, reinforcing the critical role of climate finance.
However, as sustainable investing gains traction, so does scrutiny. Greenwashing allegations have surfaced, with environmental law group ClientEarth taking legal action against BlackRock, accusing the asset manager of misleading investors about its so-called sustainable funds. In response, the European Union has finalized stricter investment fund labels to combat such practices. Morningstar’s 2023 Voice of the Asset Owner Survey showed that ESG considerations now influence a growing portion of institutional investments, yet transparency and credibility remain key concerns.
With all these dynamics at play, the question remains: Which climate change stocks are the best to buy now? Institutional investment remains a key driver. Initiatives such as Mission 2025 have united major corporations and financial institutions in urging governments to elevate their climate ambitions, thereby aligning $31 trillion toward the pursuit of zero emissions. In the following section, we break down the best climate change stocks as investment opportunities in this rapidly evolving sector.
A rooftop view of a busy city skyline with solar energy panels and wind turbines illuminating the skyline.
Our Methodology
For selecting the best climate change stocks, we screened stocks in climate change industries, including renewable energy, carbon capture, electric vehicles, and green technology. From that group, we picked 10 stocks with the highest number of hedge fund investors, as per Insider Monkey’s database of Q4 2024. The stocks are ranked in ascending order of hedge funds having stakes in them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Array Technologies, Inc. (NASDAQ:ARRY)
Number of Hedge Fund Holders: 31
Array Technologies, Inc. (NASDAQ:ARRY) is a leading provider of utility-scale solar tracking solutions, specializing in products that optimize solar panel orientation to enhance energy production. The company primarily serves large-scale solar energy projects, positioning itself as a key player in the renewable energy sector, which makes it one of the best climate change stocks to invest in.
In Q4 2024, Array Technologies, Inc. (NASDAQ:ARRY) reported a net loss but demonstrated robust order growth and improved margins. The company’s order book reached $2 billion, reflecting a 10% year-over-year increase, indicating strong demand for its products.
Analysts’ opinions on Array Technologies, Inc. (NASDAQ:ARRY)’s stock are mixed. While some view it as a promising investment in the solar sector, others note that the company’s 2025 outlook aligns with estimates but falls short of consensus expectations.
As of March 22, 2025, Array Technologies’ stock has faced a 17.39% decline over the past month compared to the oil and energy sector’s 1.36% loss. Stock price stands at $5.63, as of 26th March. Analyst sentiment, however, remains optimistic, with 54% of 26 analysts rating it a “Buy.” The median price target stands at $8.00, indicating a potential upside of 42.10%.
9. Shoals Technologies Group, Inc. (NASDAQ:SHLS)
Number of Hedge Fund Holders: 31
Shoals Technologies Group, Inc. (NASDAQ:SHLS) is a prominent provider of electrical balance of system (EBOS) solutions, serving the solar energy sector in the United States and internationally. The company offers a comprehensive range of products, including custom harness solutions, combiner boxes, junction boxes, PV wire, in-line fuses, racking, and string level monitoring solutions. These components are essential for transmitting the electric current generated by solar panels to inverters and, ultimately, to the power grid.
By moving assembly from the field to the factory, Shoals Technologies Group, Inc. (NASDAQ:SHLS) reduces onsite labor requirements, lowers project costs, and accelerates deployment timelines. This approach not only minimizes project risks but also supports sustainability goals by optimizing material use and reducing waste.
In Q4 2024, Shoals Technologies Group, Inc. (NASDAQ:SHLS) reported revenue of $107.0 million, with an adjusted gross profit margin of 37.6% and a net income of $7.8 million. The company’s backlog and awarded orders totaled $634.7 million at the end of the quarter, indicating robust demand for its products. For the full year 2025, Shoals projects revenue between $410 million and $450 million and adjusted EBITDA ranging from $100 million to $115 million.
On March 26th, Shoals Technologies Group, Inc. (NASDAQ:SHLS) announced its continued commitment to investment in domestic manufacturing in Alabama with First Solar. As of March 26, 2025, Shoals’ stock price stands at $10.86, reflecting a 1.02% increase from the previous close.
Analysts remain optimistic about the company’s prospects, citing its strong order backlog, innovative product offerings, and the expanding renewable energy market as key growth drivers. Bullish sentiments prevail among analysts, with 65% of 23 ratings recommending a buy. The average price target across these ratings stands at $6.50, suggesting a potential upside of 75.44%.
