From water to wind: dynamics of the environmental transition
October 08, 2025
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5 min
In an era marked by increasing environmental challenges, from renewable energy and clean transportation to sustainable agriculture and resource management, the global economy is undergoing a significant transition. Jens Peers, CIO of Mirova US and portfolio manager of the Mirova Global Sustainable Equity strategy, discusses the pivotal role of companies providing solutions to those challenges. Peers also highlights the interconnectedness of various megatrends, notably the relationship between technology and the environment. As the demand for energy surges, particularly due to advancements in artificial intelligence and data centers, innovative solutions are required to meet these needs sustainably.
You describe your global equity investing strategy as multi-thematic. Can you briefly tell us about these four trends?
Jens Peers (JP): We invest in companies with meaningful exposure to economic tailwinds from long-term transitions that are affecting the global economy: demographics, environmental, technological and governance. The environmental transition includes climate change, natural resource constraints, and biodiversity loss which are driving global efforts to transition to a more resilient economy. Creating demand for renewable energy, clean transportation, circular economy, and sustainable agriculture.
And roughly what percentage of your portfolio is invested in environment? Do you have set limits or targets?
JP: We don't really have set targets, it is dependent on the opportunities. It is no surprise that over time the weighting has changed. Today the environmental transition, mainly companies dealing with energy and resources like water, represents just under 30% of the portfolio. It has to be said that some companies obviously contribute to and benefit from multiple trends.
Two such trends which seem to be closely linked are technology and the environment. Technology is a resource-intensive sector, and there's been a lot of talk regarding the consumption of energy and water by AI and data centres. Do you believe that AI can grow in a sustainable way, and are there investment opportunities tied to that?
JP: It can be challenging. AI requires a lot of electricity to run the data centres and a lot of water to cool them down. There are new and better technologies on the way for the latter, which is quite exciting. On the power side, GPUs and computer chips in general are a lot more energy efficient today for the same outputs than they were even last quarter or last year or the last decade. Because they are so much more efficient, we use a lot more of those semiconductors today, and therefore power demand is going up.
So in the US, for instance, over the last 20 years, we've seen pretty much flat growth in power demand. For the next two to three decades, this is now expected to be somewhere around 2% to 3% annualised over that period1. We have an expected massive increase in demand for power. That power will come from a mix of power generation sources as well. If you want to do it sustainably, but also if you want to do it quickly, then wind and solar are certainly the quickest to deploy and are very important potential beneficiaries of this. So, we expect some exciting opportunities there.
Many governments around the world are following President Trump's outspoken stance against combating climate change. Do you believe this is a short-term change or a long-term shift? Are you taking it into consideration in your approach, and is this creating investment opportunities for you?
JP: I think there are short-term effects and long-term effects. In the short term, there's a lot of noise around renewable energy projects. Specifically in the US, offshore wind is under a lot of pressure. One day these projects are cancelled by President Trump, and two to three days later a lawyer decides that he went too far, and then it's back online. So it creates a lot of uncertainty, and that's obviously something we need to take into account when looking at valuations.
At the same time, as we're going to have a lot more demand for energy, we need to invest in more energy generation. The quickest way to do that is by investing in solar and utility-scale solar—it takes about 18 months to fully build a solar farm. Coal and gas can take seven years, and a nuclear plant can easily take 15 years before new capacity is added. So, we see a lot of noise—headline risks potentially—around that. But in reality, there's still a lot of demand and support for those technologies and for that infrastructure. Regions in the world, including Australia and the European Union, are still very supportive of renewable energy. That will probably offset some of the short-term noise that you see in the US.
You've talked about the investment opportunities in the water value chain. Can you explain what that is and why it excites you?
JP: Well, water is a resource that we need for everything we do. To survive, humans obviously need to drink it. But also, in production processes, in our day-to-day life, like irrigation for our food, washing our cars, etc. The water cycle encompasses anything from pumping up water, treating it, and delivering it to whoever needs it, to collecting wastewater and returning it back to nature.
Depending on the application, you need different levels of water purity. For instance, for semiconductors, you need ultra-pure water that has almost no polluting particles in it at all. For irrigation, that's a different level of purity. So for each of those, we see a lot more opportunities as well.
Through industrialisation and the way we live, we deal with a lot of dirty and polluted wastewater, and we are becoming more aware of the impact of many of these contaminants. PFAS and PFOS—permanent chemicals that we find in water—are a huge threat to our food and water and also to land quality. We see more and more regulation happening in this space to treat that and so, we see many opportunities in water treatment. As I mentioned earlier, even AI requires a lot of water to cool down data centres and servers. For normal water delivery and utilities, we expect significant growth coming from that part of the industry.
