While US President Donald Trump’s war against renewable energy has intensified in his second term of office, funding opportunities and trading momentum in the space – which also includes a Shariah play – is unlikely to be hit much.
Ultimately, market forces will rule as increasing demand for power in growing economies could spark and sustain a new cycle of investments in renewables, Leslie Yap, Malaysia country head for Japanese asset manager Nomura, told IFN Investor.
Clean fuel sources that are profitable to investors will stay, especially those producing abundant cheap electricity. In the interim, the US president’s protracted battle against climate change will probably sap fund inflows and investor interest from green energy initiatives like wind and solar.
“With regards to Trumps policy… I believe there are still others who are continuing to drive ahead with the whole sustainability agenda,” said Leslie, also the manager of the Nomura Global Shariah Sustainable Equity Fund.
Leslie highlighted the disconnect between financial assumptions and real-world needs, stressing that without sufficient renewable energy, advancements in technology and infrastructure could be hindered.
While policies could change, capital expenditure, once decided, has to stay – particularly for the energy required to drive business, Leslie said. Such “investments (will be) required because (in) countries like the US, they don’t have enough electricity and power if their economies continue to grow.”
Since becoming president again in 2025 after his first 2017-2020 term, Trump has signed a litany of executive orders to oppose pro-climate change policies – despite publicly acknowledging the potential of a US “energy emergency” that could force the country to dramatically increase power production.
Trump has also frozen funding for economically-efficient community solar projects and offshore wind leases. Permits for new wind projects both offshore and onshore were suspended as the Trump administration prioritized carbon-rich fossil fuels such as oil, gas and coal.
Regardless of what politics of the day dictate, Leslie said fund managers had to be continuously careful with their choice of renewable stocks to ensure they are relevant for portfolios – and critically, delivering positive returns.
Hydrogen-related stocks was an example of companies that Nomura had judiciously avoided due to overhyped valuations for its sustainability strategy in the past.
“We did not invest in a single hydrogen play during that period when… a lot of the ESG funds were basically investing [in it] because it fitted the theme,” Leslie said. While hydrogen projects had potential, “we said, we can’t justify the valuation.”
Similarly, the portfolio managed by Leslie did not own any renewable utility companies due to issues with valuations and industry fundamentals.
Instead, it contained stocks of companies that provided essential electrification and power generation equipment that fed the renewables sector – which helped the Nomura Global Shariah Sustainable Equity Fund post back-to-back returns of 9.1% and 12.3% in 2024 and 2023, respectively, despite widespread investor redemption across the ESG space.
As for fulfilling Nomura’s Shariah sustainability goals and ESG targets, the fund had recovered 727 kilograms of precious metals and produced 2,248 liters of clean drinking water for every million dollars invested, said Leslie.
