Canadian investors shifting from oil to renewables

2020 has seen a major shift in investment from the Canadian oil industry towards renewable energy companies. To date this year, Canada’s 5 big players in oil (Cenovus, Suncor, CNRL, Imperial and Husky) have lost almost $100 billion in market value. A big part of this has been due to depressed oil prices due to lower demand relating to the ongoing pandemic and the Russia – Saudi Arabia oil price war back in the spring. However, analysts believe a more fundamental shift may be also occurring, influenced by the changing political climate in Canada and the USA. In contrast to the oil sector, investors are buying up shares in companies involved in transitioning to a clean energy future. Some of this year’s best performing stocks on the Toronto Stock Exchange (TSX) are renewable energy companies. S&P/TSX’s Renewable Energy & Clean Technology Index has risen by 38% this year, while the comparable benchmark ‘energy’ index has fallen by 38%. Energy has fallen from the 2nd largest sector on the broader TSX index 5 years ago, to the 5th largest now, suggesting a diminished importance for the oil sector in the Canadian economy.

BNN Bloomberg – Investors bet big on green economy, dump oil stocks in massive sector rotation