Pivot to renewables opens up opportunities in oil and gas

Renewables are attracting investors and delivering spectacular returns—but private equity funds still see opportunities in oil

While investors are increasingly vocal about their concerns over environment, social and governance criteria, market data from the last decade reveals that investment in decarbonisation could have been made for entirely mercenary reasons. Historically, returns from oil companies have been far superior to those available in the renewables sector. But over the last decade—and especially this year as oil demand and prices have fallen—renewables have offered far better volatility-adjusted returns. According to research by the IEA and Imperial College London’s Centre for Climate Finance & Investment, a stock market-listed US fossil fuel portfolio delivered 97.2pc over ten years with 25.4pc vo