From Crisis to Connectivity: Unraveling Sustainable Energy Indexes
From Crisis to Connectivity: Unraveling Sustainable Energy Indexes

Author(s): Rui Dias, Mariana Chambino, Paulo Alexandre, Rosa Galvão
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Green economy; Connectedness; Hedge assets
Summary/Abstract: The pursuit of financing instruments aligned with the Sustainable Development Goals (SDGs) is crucial for fostering sustainability in diverse economic sectors. However, a significant gap exists in understanding the performance of green assets, posing challenges for investors and policymakers. This study addresses this gap by examining the relationships among green energy indexes, including ISE Clean Edge Global Wind Energy, S&P Global Clean Energy, S&P TSX Renewable Energy and Clean Technology, and Solactive China Clean Energy, from January 2020 to October 2023. Findings reveal that ISE Clean Edge and S&P Global Clean Energy indexes serve as hedging assets, while S&P TSX provides coverage against specific risks. The Solactive China Clean Energy index, however, may not be suitable for hedging due to strong peer connectivity and a lack of long-term stability. In conclusion, effective alignment of sustainability goals with clean energy investment strategies requires careful consideration of asset characteristics and relationships, emphasizing diversification, and ongoing awareness of evolving dynamics for socially and environmentally responsible investors.

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