As the Australian market continues its Covid recovery, the cleantech sector is flying as the transition to a low carbon economy accelerates. The Deloitte Australia CleanTech (DACT) Index rose by 33.9% over the quarter to December 2020, significantly outperforming the already strong growth of the ASX200.
Over the 2020 calendar year, while the ASX recorded a 1.5% loss, the DACT saw growth of 31.8%. Although the concept of green recovery was not a major theme in Australia compared to some other jurisdictions, the market seems to have made its own mind on the merits of that strategy. The five-year performance is even more compelling!
The companies included in the Index range across renewable energy, energy efficiency, resource efficiency, energy storage, battery minerals and water treatment. These are the industries that are redefining how cities work and how our communities live, so it is likely we will see them continue to play a critical role in our economy’s post-Covid recovery.
To provide an analysis of the DACT Index, a number of sub-indices have been developed for these sub-sectors. Over the quarter, all of the sub-indices performed well, boasting strong signs of recovery from the COVID-19 shock.
Continuing its longer-term turn around, the Sustainable Minerals sub-index was the strongest performing sub-index, recording a 62.4% increase, with the Renewable Energy Index following close behind with a 45.4% increase.
With 90 companies currently falling under the coverage of the Index, the combined market capitalisation
reached a new record high of $73 billion. The Deloitte Australia CleanTech Index presents the only complete
picture of the Australian CleanTech industry’s growth in a single measure.
The COVID-19 outbreak is causing major disruption in the world’s markets. However, the growth of the
CleanTech sector over recent years and the demonstrated recovery in the previous two quarters since the
initial shock has been incredibly strong.
The continued outperformance of the CleanTech sector compared to the wider market signifies the size of the opportunity that the sector presents for the recovery to a post-COVID world. The CleanTech sector can contribute to both economic recovery and global decarbonisation efforts.
This “two birds, one stone” opportunity is an attractive outlook for investors looking for resilient sectors with
high growth potential.
The latest Quarterly Index Performance Report can be downloaded from here.
The Deloitte Australia CleanTech (DACT) Index is a quarterly review of cleantech stocks listed in Australia. It is
compiled from publicly available information provided by the Australian Securities Exchange (ASX). The DACT
Index is based on the market capitalisation weighted share price performance of listed companies that operate
across a number of defined sub-sectors