The anti-inflation package revives green finance and boosts US jobs

Investors have already started looking more closely at the green agenda after the bill became law. Two weeks before the package was announced on July 27, clean energy funds in the U.S. had an estimated net outflow of $223 million, according to U.S. analyst Morningstar. However, from the day after August 10, the flow reversed, and 23 clean energy funds in the country attracted net inflows, an estimated US$433.6 million. “Since the climate deal was announced, investors have flocked to this fund group,” says John Hale, director of sustainable investing at Morningstar.

Stock market also witnessed high attraction of resources. The iShares Global Clean Energy ETF ICLN, which includes global investments in clean energy, saw estimated outflows go from US$17.6 million to US$22.3 million during the period. In turn, iShares Global Energy ETF IXC, a portfolio of traditional energy stocks based on fossil fuels, took the opposite step, with estimated inflows of US$9.6 million and outflows of US$75.9 million.

“The announcement also boosted the performance of renewable energy funds,” says Morningstar’s Hale. In the previous two weeks, clean energy funds were already up, with an average return of 5.4%, following the stock market’s performance in July. Since the announcement of the package, from July 28 to August 10, the average profit has increased by 13.7%.

On the corporate front, the billion-dollar investment in clean energy should increase the number of companies and employers in the sector. Early estimates point to the potential for 300 to 1,000 new companies to be created in the United States.

“After months of negotiation, the Inflation Reduction Act is now law, and the United States is on track to become the clear world leader in clean energy.” Knott, Abigail Rose Hopper.

According to him, the legislation represents a boost to long-term investments in clean energy and energy storage and the hiring of hundreds of thousands of new workers.

For Carlos Lobo, a partner at US law firm Hughes Hubbard & Reed LLP, the package will be a catalyst for the renewable energy business, attracting resources to the division and an engine of mergers and acquisitions.