Climate investing is undergoing a major shift as investors move beyond traditional environmental themes toward businesses addressing the physical and financial consequences of climate change. On Market Movers at the New York Stock Exchange, Remy Blaire speaks with Jeff Gitterman, Managing Director at Gitterman Asset Management, about the growing investment opportunities in climate adaptation, the energy demands of artificial intelligence data centers and why climate risk is increasingly becoming a balance sheet consideration for financial markets.
Gitterman explains why companies focused on preparing for and repairing damage from climate-related disasters are attracting greater investor attention. He highlights Bloomberg’s Prepare and Repair Index, which he says has outperformed the S&P 500 by approximately 7.5% over its tracked period. The conversation explores why businesses involved in water management, sustainable infrastructure and climate resilience could benefit as investors reassess the sectors positioned to address growing environmental challenges.
The discussion also examines Gitterman Asset Management’s Climate Alpha strategy and its performance during a period of weakness in major technology stocks. Gitterman discusses how climate adaptation themes are demonstrating resilience as investors look beyond the largest technology companies for potential sources of growth. He identifies water infrastructure, energy systems and disaster preparedness as areas benefiting from increasing demand for practical solutions to climate-related risks.
Artificial intelligence infrastructure takes center stage as Gitterman examines the growing electricity requirements associated with data center expansion. He explains why rising demand for computing capacity is creating challenges for power grids that were not designed to accommodate such rapid growth. While data centers can be constructed relatively quickly, connecting them to reliable electricity infrastructure can take considerably longer, creating potential bottlenecks for companies investing heavily in AI.
The conversation explores why energy availability could become one of the biggest constraints on artificial intelligence growth. Gitterman discusses how data centers increasingly depend on natural gas, renewable energy and expanded electricity infrastructure to support their operations. He also points to rising electricity capacity prices in the PJM market as evidence of mounting pressure on power systems, highlighting why investment in generation and grid infrastructure is becoming increasingly important.