If the 'election outcome is deeply consequential for clean energy investment', which ASX shares might benefit?

Let's check what greater climate action might mean for some ASX shares.

| More on:
A woman on a green background points a finger at graphic images of molecules, a rocket, light bulbs and scientific symbols as she smiles.

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

  • Renewable energy shares are now front and centre under a Labor government
  • Electoral support for climate action independents and the Greens means there may be even more of a push towards reducing emissions
  • With the regime change, there are many ASX renewables shares that may benefit from a shift in policy

In his post-election speech, newly-elected Prime Minister Anthony Albanese noted that Australia can "take advantage of the opportunity for Australia to be a renewable energy superpower".

A Labor government has committed to slashing carbon emissions by 43% by the year 2030, compared to 2005 levels.

But what impact is this set to have on financial markets? And what tickers are set to benefit? Let's take a look.

Clean and renewable energy on the agenda

It appears for the first time in at least 70 years that around one-third of Australians voted neither for Laboror nor the Coalition.

The Greens received roughly 12% of the vote while the so-called teal independents have taken a swathe of formerly Liberal seats, campaigning on a platform of greater climate action.

This new representation in federal parliament is set to have far-reaching impacts on Australia's stance on climate change.

Bloomberg journalist Ben Westcott, speaking on Bloomberg Day Break Australia on Monday, concurs.

Commenting on the outlook for Australia's climate emission reductions, he said: "[Now Prime Minister Anthony] Albanese went to the election with a promise of about 40% climate commission cuts by 2030 but the Greens Party wants 70%, the Independents want 60%."

Westcott said it remains to be seen how this will play out in climate policy but it may be that the Labor government could "be forced to take tougher action to cut emissions".

The regime change has been welcomed by The Clean Energy Investor Group (CEIG), a not-for-profit advocacy organisation representing institutional investors.

The group's CEO Simon Corbell said any shift in policy towards renewables is "deeply consequential for clean energy investment opportunities in Australia". Corbell told The Australian:

The message from the incoming Prime Minister is clear.

He wants Australia to be a renewable energy superpower. And that will send an enormously positive signal, right across the sector, about the opportunity in the Australian market.

We now have a national government that will not simply grudgingly accept the energy transition, but which will enthusiastically embrace it.

And that's enormously positive for investor sentiment.

What ASX shares might benefit?

With the push towards renewable energy imminent, several names within the domain are now front and centre.

ASX shares such as Infratil Ltd (ASX: IFT) and Genesis Energy Ltd (ASX: GNE) come to mind. Each stock has finished 5% and less than 1% in the green over the past five days of trading respectively.

More 'traditional' energy companies with a renewable footprint are contenders too, such as Origin Energy Ltd (ASX: ORG) which has ownership of substantial solar power generation assets.

Secular names such as Hazer Group Ltd (ASX: HZR) also spring to mind given its focus on research into alternative power sources.

Except for Origin – with its 29% gain this year to date – each of these ASX shares has been beaten down in 2022, trading in the red during that time.

In wider market moves, the S&P/ASX 200 Index (ASX: XJO) is trading 0.04% higher early on Tuesday afternoon.

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 Scott Phillips.

More on Economy

Two men and woman sitting in subway train side by side, reading newspaper
Share Market News

3 things ASX investors should watch this week

For the sake of your stock portfolio, look out for these developments over the next few days.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Share Market News

3 things ASX investors should watch this week

Keep these events on your radar in the coming days, as they could have an impact on your investments.

Read more »

a woman watches sand pass through an hourglass.
Share Market News

Crikey! Will ASX 200 investors really have to wait until 2025 for RBA interest rate cuts?

Despite an uptick in unemployment, ASX 200 investors may not see the RBA cut interest rates for some time.

Read more »

Man on a laptop thinking.
Technology Shares

Why are ASX 200 tech shares taking a beating today?

Leading ASX 200 tech stocks are well into the red on Wednesday.

Read more »

Three business people stand on platforms in the desert and look out through telescopes.
Share Market News

3 things ASX investors should watch this week

The coming days are huge for your stock portfolio. Keep an eye on these developments.

Read more »

A blockchain investor sits at his desk with a laptop computer open and a phone checking information from a booklet in a home office setting.
Share Market News

ASX 200 drops as RBA leaves interest rates unchanged at 4.35%

It could be the RBA's tough language that is spooking investors today.

Read more »

A woman stands triumphant with arms outstretched as she overlooks a city at sunset.
Share Market News

If history repeats itself, tomorrow's RBA decision could mark the start of a big year for the ASX 200

The ASX 200 has a long history of interest rate linked performance.

Read more »

A hand moves a building block from green arrow to red, indicating negative interest rates
Share Market News

ASX shares could rocket on Tuesday. Here's why

Investors, consumers and businesses will be watching carefully this week as a big decision could impact their immediate welfare.

Read more »