The Overlooked Building Blocks of the Energy Transition
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If the worst consequences of climate change are to be avoided, the world's energy infrastructure is likely to require a complete transformation. Many people are familiar with the alternative energy technology needed for this overhaul, but less attention has been paid to the raw materials that underpin that technology's development.
As the pace of the energy transition accelerates, many expect the demand for clean energy materials — that is, the physical materials required to create alternative energy sources — to accelerate with it. Yet significant physical and geopolitical obstacles stand in the way of producing adequate supply — an imbalance that may be driving some of today's most attractive opportunities for investors.
In this Lazard Insights, Lazard Asset Management makes the case that, with careful scrutiny of underlying fundamentals and ongoing assessment of external risks, exposure to the energy transition may be best achieved by owning the equities of the materials producers that are poised to benefit from it over time.
