Portfolios and climate: higher returns for companies exposed to the transition
This is according to the Polimi-Banor study. The study analysed 8,000 financial statements of Stoxx Europe 600 companies and their returns between 2011 and 2025. Returns on growth stocks have tripled
Key points
Megatrends are not just a long-term narrative: over the last fourteen years, they have also rewarded investors. This is the conclusion of a study carried out by the Politecnico di Milano in collaboration with Banor, which analysed over 8,000 financial statements of companies in the Stoxx Europe 600 index and their stock market returns between 2011 and 2025, using artificial intelligence tools to measure companies’ exposure to three major structural transformations: the climate transition, digitalisation and artificial intelligence, and an ageing population. The study shows that companies’ ability to capitalise on these megatrends has had a tangible and statistically significant impact on share performance. The strongest signal comes from climate transition, with companies best positioned to capitalise on the opportunities of the energy revolution recording higher returns than those most exposed to the risks of climate change, without taking on higher levels of risk. In particular, the portfolio of growth stocks with the greatest positive exposure to the climate megatrend more than tripled in value over the period analysed.
“The study,” comments Angelo Meda, head of equities at Banor, “shows that identifying companies exposed to a megatrend is very often no simple task. Extracting data is certainly easier than in the past, thanks to the support of artificial intelligence, but it is important to note that one must be able to make appropriate assessments and identify which issues actually need to be monitored. The market often already prices in the benefits of a megatrend, so it is necessary to monitor its progress. ‘If following the trend in the energy sector has proved effective, it is because its evolution has been relatively linear over time. In the technology sector, however, the continuous acceleration of innovation generates higher volatility and makes it more difficult to identify the winning stocks.’
Climate transition: higher returns without additional risk
The clearest signal emerges from the climate transition megatrend. In all the portfolios analysed, companies with positive exposure to this trend – producers of renewable energy, low-carbon technologies, heat pumps, outperformed their negatively exposed counterparts for most of the time horizon analysed, delivering higher returns whilst exhibiting broadly similar volatility and beta. The most telling result concerns positively exposed growth stocks, whose value more than tripled over the period, whilst the corresponding negatively exposed portfolios ended with negative returns of close to -42 per cent. The research interprets this trend as the existence of a return premium for ‘green’ companies that cannot be justified by greater exposure to systematic risk, and which instead reflects a gradual reassessment by investors of the long-term prospects of sustainability-oriented business models. Only in the most recent two-year period, 2024–2025, was there a partial slowdown in climate-positive portfolios, consistent with overcapacity in the renewable energy and electric vehicle markets and with the rally in fossil fuel stocks linked to geopolitical tensions.
Digitalisation and AI
As regards the megatrend of digitalisation and artificial intelligence, the signal is more recent but growing. Significant effects have emerged mainly in the final years of the period analysed, starting in 2020, when companies with positive exposure to the trend – particularly those focused on cloud computing, applied AI, digital payments and cybersecurity, began to outperform significantly, albeit with greater volatility and a higher correlation with general market movements.
The researchers also point out an anomaly: the portfolio of value stocks with positive exposure to the digital megatrend has recorded surprisingly modest returns. The reason is partly methodological. In the case of digitalisation, financial statements struggle to distinguish between genuinely positive exposure to the trend – companies that derive a structural advantage from digital transformation – and the defensive reaction of traditional firms that claim to be investing in digital precisely because they are being disrupted by it.
