We recently compiled a list of the 12 Most Promising Green Stocks According to Hedge Funds. In this article, we are going to take a look at where Constellation Energy Corporation (NASDAQ:CEG) stands against the other most promising green stocks according to hedge funds.
President Donald Trump has signed an executive order directing the United States to withdraw from the Paris climate agreement, which is a significant blow to worldwide efforts to combat global warming. The order, signed on Trump’s first day in office after being sworn in for a second term, marks the second time the US has withdrawn from the agreement, having previously done so in 2017. The Biden administration had previously submitted a plan to cut US greenhouse gas emissions by more than 60% by 2035, but Trump’s withdrawal from the Paris Agreement has threatened to undermine these efforts.
On 20 January, The Guardian reported that the global financial sector is witnessing a significant shift away from its commitment to net zero emissions, as banks, asset managers, and industry groups move to accommodate the Trump administration’s anti-net zero stance. At the center of this shift are two key initiatives: The Glasgow Financial Alliance for Net Zero (GFANZ) and The Net Zero Asset Managers (NZAM) initiative.
GFANZ, a global coalition of financial institutions, was launched in 2021 at the COP26 climate conference in Glasgow, Scotland, with the goal of mobilizing the trillions of dollars needed to deliver the goals of the Paris Agreement. The alliance had set a goal of achieving net-zero emissions by 2050, and its members had committed to aligning their financing activities with the goals of the Paris Agreement. However, in a significant reversal, GFANZ has abandoned its requirement that members be aligned with the Paris Agreement, following a series of withdrawals by major US banks.
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The Net Zero Asset Managers (NZAM) initiative, which includes some of the world’s largest asset managers, has also been impacted by the shift in the global financial sector. NZAM was launched in 2020 with the goal of promoting net-zero investing and supporting the transition to a low-carbon economy. The initiative had gained significant momentum, with over 200 asset managers signing up to its principles and committing to align their investment portfolios with the goals of the Paris Agreement.
However, in recent weeks, NZAM has also suspended its monitoring of members’ progress towards their net-zero commitments, and has announced a review “to ensure NZAM remains fit for purpose in the new global context.” BlackRock, the world’s largest asset manager, has also quit the NZAM initiative, citing “confusion” over its membership. The departure of BlackRock, which manages over $11 trillion in assets, is seen as a significant blow to the initiative and has raised concerns about the ability of NZAM to achieve its goals.
The recent policy shifts and the wavering commitment of major financial institutions to net-zero goals represent significant setbacks in the global fight against climate change. However, sectors such as renewable energy and electric vehicles are expected to continue demonstrating resilience due to their cost-effectiveness, technology advancements, and economies of scale.
A close up of a wind turbine producing electricity as the sun sets.
Our Methodology
To compile our list of the 12 most promising green stocks according to hedge funds, we used environmental ETFs plus online rankings to compile an initial list of 25 green stocks. We then used Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Investors: 78
Constellation Energy Corporation (NASDAQ:CEG) is a leading energy provider in the United States, specializing in power generation, wholesale energy sales, and retail energy supply. The company operates one of the nation’s largest solar power facilities, with a generation capacity of 242 megawatts, alongside 27 wind projects across 10 states with a total capacity of approximately 1,400 MW.
Constellation Energy Corporation (NASDAQ:CEG) is leveraging its renewable energy expertise to provide innovative solutions that enable data centers and other businesses to operate with clean and reliable energy. One of the company’s most popular offerings is its offsite renewables product, CORe, which facilitates location-specific renewable energy purchases and provides renewable energy certificates (RECs) tailored to meet customers’ specific energy consumption needs. The company recently partnered with W. L. Gore & Associates on a 55-megawatt (MW) renewable energy project. Under a 20-year agreement, W. L. Gore & Associates will procure around 110,000 MWh of energy annually and receive energy and RECs from Constellation Energy Corporation’s (NASDAQ:CEG) Glover Creek Solar Project in Metcalfe County, Kentucky.
By offering long-term agreements to businesses, Constellation Energy Corporation (NASDAQ:CEG) ensures a stable revenue stream while supporting its clients in achieving their carbon reduction goals. Additionally, the CORe products help the company foster strategic partnerships and collaborations to accelerate the growth and deployment of solar energy projects in collaboration with utilities, state governments, and other organizations.
Overall, CEG ranks 2nd on our list of the most promising green stocks according to hedge funds. While we acknowledge the potential of CEG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CEG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.