Here are the best ASX renewables shares of the year so far

Green wasn't so green last quarter…

A group of businesspeople hold green balloons outdoors.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Renewables and ESG focused shares have taken a hit this year, while resources and traditional energy markets have boomed 
  • Losses range from individual shares to more diversified products such as ETFs 
  • Some names have absorbed the volatility in 2022 far better than others. Here's a couple that did 

Commodity markets are booming in 2022 amid a wave of catalysts. Turns out, that's been equally as harsh for ESG and ethically focused share baskets.

As a sector – which is still poorly defined on Australian public markets, mind you – renewables have lagged other segments such as financials, utilities and materials this year.

How can we tell? Whilst there's no specific ASX renewables index, EFTs tracking the segment have crept downwards this year, as is shown further below.

Evidently, as markets have endured volatility in 2022, that's translated to a fairly strong headwind for ASX renewables shares, and at the end of the day, the sector is in the red in 2022.

Nonetheless, scaling back to the start of the year, some names have absorbed losses better than others. Let's take a look at those.

'Green' shares aren't in the green

Unfortunately, on an individual stock level, what we define as a 'renewables' share is quite narrow. Actually, there are no real winners per se, but some shares absorbed selling pressures better than others.

Let's talk in terms of energy first and, with that, results aren't good.

Renewables investor Infratil Ltd (ASX: IFT) is down 2.45% year to date but has whipsawed higher over the past three months. Although, its price chart looks like a 9.0 scale reading on the Richter scale.

Meanwhile, Genesis Energy Ltd (ASX: GNE), owner of a diverse portfolio of thermal and renewable generation assets located in different parts of New Zealand, has slipped 3.3%.

Trends are similar across the board and it appears any capital that's left the sector has been shipped straight across to the adjacent resources, traditional energy, and wider commodities segments.

Alas, it's no better for the exchange-traded funds (ETFs), with the Vanguard Ethically Conscious International Shares INDEX ETF (ASX: VESG) creeping down by 13%.

Meantime, the VanEck MSCI Australian Sustainable Equity ETF (ASX: GRNV) has fallen by more than 5% and is in a similar vein to the product above.

Finally, the Russell Investments Australian Responsible Investment ETF (ASX: RARI) has crept up hard in 2022 and is 4 basis points higher in that time.

TradingView Chart

It's important to zoom out

Longer term – since last January to be specific – the picture's a bit different. Three of the four securities have remained buoyant over that time, albeit Genesis Energy, which slipped more than 21% into the red.

The VESG ETF seems to have outperformed this bunch and was the star player until volatility crept in this year and it has since consolidated returns.

It has now levelled off and is rangebound alongside the fellow MSCI Australian Sustainability ETF from VanEck.

That's something to think about.

TradingView Chart

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ESG

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Energy Shares

Australian first: Why Woodside shares are making news this week

Woodside shares are making news after the ASX 200 energy stock took this Australian first ‘valuable step’.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
ESG

3 ethical ASX shares poised to outperform in 2024

This leading fund manager sees strong potential gains ahead in 2024 for these three ethical ASX shares.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

Rio Tinto share price marching higher amid record Aussie solar power agreement

Rio Tinto is working to reduce its operating carbon emissions.

Read more »

A woman wearing dark clothing and sporting a few tattoos and piercings holds a phone and a takeaway coffee cup as she strolls under the Sydney Harbour Bridge which looms in the background.
ETFs

Which ASX ETFs holding Aussie shares delivered the best returns in 2023?

There is a clear theme among the best ETFs of 2023 -- environmental, social, and corporate governance.

Read more »

A lithium battery with blue power background, indicating positive share price movement for clean ASX lithium miners
Resources Shares

What's happening with the Fortescue share price amid this US battery factory news?

Fortescue is actively targeting some of the US$369 billion in clean energy initiative subsidies provided by the US Inflation Reduction…

Read more »

A group of businesspeople hold green balloons outdoors.
Resources Shares

Is Fortescue set to be pipped at the post on green hydrogen?

Fortescue isn’t the only ASX 200 company pressing forward with green hydrogen production.

Read more »

Envirosuite investor holds a tech device while sitting on a ledge looking out to trees through a window
ETFs

Are ASX sustainability shares delivering for ESG investors?

Are ESG-focused ETFs and managed funds delivering better returns than plain old index funds?

Read more »

boy dressed as an eco warrior and holding a globe.
ETFs

Want global diversification with a big focus on ESG? Try this ethical ASX ETF

Here’s why ethically-focused investors could love this option.

Read more »