Overview
EUROPEAN GREEN DEAL
Get ready to lift-off
In this special edition of the SG Europe Equity Compass, Societe Generale strategists review the European Green Deal presented by the European Commission, and go through the reasons why investors should pay attention to the European Green Deal.
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With its European Green Deal, the EU has set itself the very ambitious goal of becoming the first climate neutral continent.
This has the potential of becoming a real game changer for all the actors involved and, as our European Equity Strategy
team is keen to highlight, a great boost for portfolios.
It may be once-in-a-century industrial project
The European Green Deal is a set of policies put forth by the European Commission. The goal is for the EU to be climate neutral in 2050. It provides a roadmap with actions to boost the efficient use of resources by moving to a clean, circular economy, restore biodiversity and cut pollution. It outlines investments needed and financing tools available and explains how to ensure a just and inclusive transition.
It is Europe’s new growth strategy. And our strategists believe the European Green Deal has the potential to be an industrial strategic project that could be classified in history next to the US’s New Deal (1933), the Marshall Plan (1947) and the foundation of the European Economic Community (1957). Following the COVID-19 crisis, EU leaders agreed to support the recovery through a fiscal plan (with a €500bn recovery fund, 3.5% of EU GDP, backed by Germany), and the Green Deal is be at
the heart of this.
It is a long-term environment project that is accelerating quickly
It is also a political project: the latest polls show that environment and climate change are among European citizens' main concerns: it is now a concern for 24% of European citizens, compared to only 6% 3 years ago.
The European Green Deal is also becoming a key factor for investors, as shown by the strong inflows into Environment, Social & Governance (ESG) funds. With the Green Deal, Europe wants to accelerate its energy transition and become the world's first climate-neutral continent. This is an opportunity for European companies to develop skills and knowledge which would allow them to potentially export their expertise around the globe.
Sooner or later, our scientists and researchers will develop a vaccine against coronavirus. For climate change, however, there is no vaccine. This is why Europe must now invest in a clean future.
Our message is simple: we can’t abandon the Green Deal to transform our economy. We must act faster.
Emmanuel Macron
President of the French Republic
18 May 2020
This is Europe's man on the moon moment.
Ursula von der Leyen
Head of European Commission
14 May 2020
Ursula von der Leyen
Head of European Commission
14 May 2020
GEAR PORTFOLIOS TO THE EUROPEAN GREEN DEAL
The Green Deal has the potential to boost portfolios. Our European Equity Strategists detail a tailored European Green Deal basket of European companies that could potentially benefit from the Green Deal and help the EU to achieve its ambitious target. The basket shows that there is life outside Health Care, Staples, IT and Luxury stocks in European equities, and our strategists believe it is now a good opportunity to gain exposure to the European Green Deal theme.
54
European companies composing the Basket
110
Performance over the past two years, strongly outperforming* the STOXX 600 Index (+0%)
%
+
*Past performance is not indicative of future performance. As of 02/10/2020
Ursula von der Leyen
Head of European Commission
14 May 2020
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This page contains financial analysis which reflects the opinion of the Cross-Asset Research department of Societe Generale, at the date of its publication. It does not necessarily reflect the views of the other departments of Societe Generale nor the official opinion of the Societe Generale group. This content has been prepared for use by institutional and professional investors and is not intended for retail investors. Investors should consider this report as only a single factor in making their investment decision.
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This page contains financial analysis which reflects the opinion of the Cross-Asset Research department of Societe Generale, at the date of its publication. It does not necessarily reflect the views of the other departments of Societe Generale nor the official opinion of the Societe Generale group. This content has been prepared for use by institutional and professional investors and is not intended for retail investors. Investors should consider this report as only a single factor in making their investment decision.
© Societe Generale 2020
Cookies Policy
Legal Information