How last year’s investment trends have evolved in 2024

As the energy transition continues, investors see a potentially compelling case for ESG

The United States continues to be a “hive of opportunity” for sustainable investing, with significant progress in areas like smart grids, battery energy storage systems (BESS), electrification, agricultural technology, resource management, and innovations in software and chip development.

Favorable policies and maturing technologies led to a 38% rise in investments in clean energy, transportation, electrification, and carbon management between 2022 and 2023, with $67 billion invested in the fourth quarter of 2023 alone.⁴  The Inflation Reduction Act and the CHIPS and Science Act were signed into law in August 2022 and continue to drive action among businesses and investors.

Today, ESG-driven “conscious investing” continues to offer investors potential ROI and greater protection from risks associated with poor corporate governance and climate change. Business practices are changing across industries, from sustainable fashion to sustainable travel and transportation, in response to policy and consumer demand. More companies are now calculating Scope 3 emissions, the indirect emissions occurring upstream or downstream of their operations, reflecting deeper ESG commitments. In March 2024, the U.S. SEC set new disclosure requirements for Scope 1 and 2 emissions (although these requirements are currently entangled in legal challenges).⁵

The impact of volatile weather patterns and power grid disruptions in 2023 highlighted the necessity for long-term green infrastructure investments, and the nationwide June 2024 heatwave again showed the need for reliable, resilient infrastructure investments. 

As 2024 continues, new energy challenges are emerging. Notably, the growth of AI is driving power demand and could account for 8% of total energy use in the U.S. by 2030,⁶  making the urgent case for investing in clean energy to support tech innovation. 

Tech innovations are fueling potential investor opportunities in health and biotech 

The biotech industry saw a wave of post-COVID investor caution in 2023, as funding dropped by 43.2% compared to 2022 and 52.3% compared to 2021.⁷  Yet 2023 saw a wave of technological innovation and consumer enthusiasm that is now fueling potential investor optimism in 2024 and beyond.

• Alzheimer’s treatments. Late 2022 saw a breakthrough in Alzheimer’s drugs, with the first time any drug had consistently demonstrated success in slowing the disease’s progress.⁸  The FDA approved lecanemab in July 2023,⁹  and in June 2024 approved donanemab as well, leaving physicians, patients, and investors cautiously optimistic.¹⁰
• AI technology. As AI technology continues to evolve in 2024, it could enable more accurate diagnostics, personalized treatments, better training, and greater operational efficiency, leading to investor opportunities.¹¹
• Weight loss treatments. GLP-1 agonist medications have proved highly popular – in fact, one in eight adults has tried a GLP-1 agonist.¹²  Drug companies currently have an additional 27 GLP-1 drugs in development, suggesting continued ROI.¹³
• Gene therapy. In 2019, the FDA predicted it would be approving 10 to 20 cell and gene therapy products a year starting in 2025.¹⁴  At the end of 2023, the FDA approved Casgevy, the first FDA-approved treatment to utilize a type of novel genome editing technology.¹⁵  As of June 2024, there were over 35 gene therapies approved by the FDA, with at least 500 in line for assessment.¹⁶
• Wearables.  U.S. consumers, especially older demographics, are turning to the latest in wearable wellness and personal health products, as AI technology continues to drive new product development in 2024. The U.S. fitness tracker market could see an 18.9% CAGR from 2023 to 2030.

Overall, the industry is likely to stabilize above pre-pandemic levels¹⁷  and continue growing in the years ahead.¹⁸  Investors could see significant returns as demand grows for innovative health tech solutions.

With the US election still to come, what should long-term investors keep in mind?

Election years always bring uncertainties. Yet long-term investors can look at market strengths and ongoing growth drivers that may warrant continued confidence in US opportunities.

The US economy grew over 9% between the end of 2020 and end of 2023,¹⁹  delivered above-average economic growth in 2023 despite the threat of recession, and the S&P 500, Dow Jones, and Nasdaq indices are showing continued momentum in 2024.²⁰

The Biden administration enacted three policies in 2021 and 2022 – the Infrastructure Investment and Jobs Act, IRA, and CHIPS and Science Act – totaling around $1.5 trillion, based on AXA estimates, which created significant incentives for long-term investment. Since then, many U.S. firms have announced new projects, more than likely influenced by these policies.

While an administration change in November could undermine these policies, this could prove unlikely given the widespread popularity of these financial incentives and their existing economic impact.

The bottom line for long-term investors is that the U.S. economy is entering the election period in a strong position. 

References to companies are for illustrative purposes only and should not be viewed as investment recommendations.

Risk Warning:

Investment involves risk including the loss of capital.

The information has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. This analysis and conclusions are the expression of an opinion, based on available data at a specific date. Due to the subjective aspect of these analyses, the effective evolution of the economic variables and values of the financial markets could be significantly different for the projections, forecast, anticipations and hypothesis which are communicated in this material.