The compelling case for investing in this climate tech ASX ETF

A new report from Betashares has outlined the current shift taking place in the world of climate technology. 

According to the report, it has previously been framed as an innovation story built on novel solutions, venture capital funding rounds and the promise of disruption.

However, it has now moved decisively into its execution phase.

According to Vinnay Cchoda Manager – Responsible Investments at Betashares, this marks a structural shift. 

Climate technology is no longer a niche growth theme but a key constituent of the infrastructure and capital investment cycle underpinning the global economy.

What is climate technology?

Climate technology refers to the tools, systems, and processes used to reduce greenhouse gas emissions and adapt to the impacts of climate change. 

It also includes things like renewable energy (solar, wind), energy storage, electric transport, smart grids, and low-carbon industrial processes.

More broadly, it now covers the infrastructure and technologies needed to transform how energy is produced, distributed, and used.

This is along with solutions for resilience, such as water management and climate-resilient materials.

Investment and application growing

In yesterday’s report from Betashares, the ASX ETF provider said the case for climate technology has strengthened in recent times. 

The physical impacts of climate change are increasingly being felt and have material economic consequences.

The Intergovernmental Panel on Climate Change (IPCC) confirms that human-induced climate change has increased the frequency and intensity of extreme heat, heavy rainfall and drought across most regions – raising risks to infrastructure, food systems and productivity.

At the same time, the transition is increasingly underpinned by energy system economics rather than environmental policy alone. 

The International Energy Agency (IEA) estimates that global energy investment exceeded US$3 trillion in 2024, with roughly two-thirds directed towards clean energy, electrification, grids and storage.

In that context, climate technology should no longer be viewed as a discretionary or thematic allocation. It represents a structural response to tightening physical constraints and a reconfiguration of the global energy and industrial system.

How to gain exposure

For investors looking for exposure to climate tech the Betashares Capital Ltd – Betashares Climate Change Innovation ETF (ASX: ERTH) is worth considering. 

It provides exposure to a portfolio of global companies positioned to benefit from climate change mitigation and adaptation. 

Importantly, this exposure includes early-stage innovators and established companies with scale, robust balance sheets and global revenue bases.

As climate technology becomes increasingly embedded in mainstream capital expenditure and infrastructure cycles, a diversified listed exposure offers a way to participate in the transition without relying on the success of any single technology or policy outcome.

The post The compelling case for investing in this climate tech ASX ETF appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.