TY - JOUR T1 - Climate Solutions Investments JF - The Journal of Portfolio Management DO - 10.3905/jpm.2022.1.450 SP - jpm.2022.1.450 AU - Alexander Cheema-Fox AU - George Serafeim AU - Hui (Stacie) Wang Y1 - 2022/12/08 UR - https://pm-research.com/content/early/2022/12/08/jpm.2022.1.450.abstract N2 - An increasing number of companies are providing products and services that help reduce carbon emissions in the economy. We develop a methodology to identify those companies and create a sample of publicly listed climate solutions companies, allowing us to study their geographic composition, accounting fundamentals, valuation ratios, and stock performance over time. The sample is equally split between developed and emerging markets with a significant number of companies located in China. A portfolio of climate solutions companies exhibits higher revenue growth, higher investments in research and development and talent, and lower profitability margin. Portfolio returns are higher for solutions in energy, fuels, battery, and transportation themes and exhibit very little correlation with the returns of portfolios that seek to reduce their carbon emissions by underweighting high-carbon-emission companies, suggesting that climate solutions portfolios are distinct from low-carbon-emission indexes. ER -