It may take decades for economies to overcome their dependency on fossil fuels, suggesting it’s unrealistic for investors to shun the industry, according to strategists at UBS Group AG (NYSE:UBS).
As attention on energy supplies intensifies following the outbreak of the Ukraine war, investors should focus on sustainability leaders within the fossil fuel industry, in addition to renewable tech, such as solar and wind, UBS wrote in a note to clients.
“Investors can play a role in overcoming the energy challenges that have been intensified by the Russian invasion,” wrote the strategists led by Mark Haefele, UBS Global Wealth Management chief investment officer.
“This can best be done, in our view, through a diversified approach that embraces the most responsible fossil fuel firms, renewable innovators, and pioneers of the next generation energy solutions,” he added.
The US Energy Information Administration World estimates that energy use will rise 50% by 2050. Renewable energy sources will contribute a similar level of energy to petroleum and other liquid fuels by that time, according to the organisation.