Sustainable Alpha: The role of energy prices

Jessica Wirth, Putnam Investments

Jessica Wirth is an analyst and for Putnam Investments and portfolio manager of Putnam Global Energy Fund.

Sustainable Alpha features shared conversations with the best minds, portfolio managers and industry leaders working to maximize returns while prioritizing the environment, social and governance factors — what’s become short-handed in the industry as ESG. Sustainable Alpha highlights portfolio approaches and investment trends against the backdrop of broader themes such as resource constraints, policy changes and demographic shifts — all while shedding light on how ESG can impact your investments.

Sustainable Alpha conversations are led by John Wrenn, Senior VP, Investments for UBS. The Wrenn Ferguson Group has a combined experience of 200 years managing over 1.6 billion in assets, offering customized wealth management strategies for individuals, endowments and foundations. View the rest of his conversations with leaders in the sustainable investment community.


Here he's talking with Jessica Wirth, an analyst for Putnam Investments and a portfolio manager of the Putnam Global Energy Fund.


John Wrenn: Today 85 percent of the world's population lives in emerging markets. How will growth of emerging market economies impact the price of energy in the future?

Jessica Wirth: The growth of emerging market economies will underpin high energy prices, such as the ones we are seeing today, over the coming decades. Under the central forecast of the International Energy Agency, energy demand will increase by more than one-third from today to the year 2035. Of this growth, 90 percent will come from emerging countries, with China alone accounting for around one-third of the growth. While China has only recently (in 2009) surpassed the U.S. in overall energy consumption, the country is expected to consume 70 percent more energy than the U.S. in 2035. Even then, the Chinese will consume less than half the energy of their U.S. brethren, on a per-capita basis. Other emerging countries — India, Indonesia, Brazil, and the nations of the Middle East — will also continue to see demand increase at high rates.

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