What is the urban heat island effect?

The urban heat island effect refers to metropolitan areas that are significantly warmer than their surrounding rural areas due to human activities. Cities absorb and retain heat from buildings, roads, and reduced vegetation. This causes temperatures to be several degrees higher in urban centers, leading to increased energy consumption, air pollution, and health risks during hot weather.

Why are urban cooling technologies becoming more important?

Urban cooling technologies are gaining importance due to three major trends: rising global temperatures from climate change, increasing urbanization with more people living in cities, and more frequent extreme heat events. These factors create a growing need for solutions that keep urban areas livable while reducing energy consumption from air conditioning.

What are "cool roofs" and green infrastructure?

Cool roofs are roofing systems designed to reflect more sunlight and absorb less heat than standard roofs, using light-colored materials or special reflective coatings. Green infrastructure includes vegetation-covered surfaces like green roofs, walls, and urban parks that naturally cool the environment through shade and evapotranspiration. Both technologies significantly reduce building temperatures and energy needs for cooling.

How do building regulations affect these companies?

Building regulations increasingly require energy-efficient designs and materials to reduce carbon emissions and manage urban heat. Many cities now mandate minimum energy efficiency standards, green roof requirements, or heat-reflective surfaces for new construction. These regulations create consistent demand for the products and services offered by companies in this group, as building owners must comply with stricter codes.

What is a "growth-focused satellite position" in a portfolio?

A growth-focused satellite position refers to investments that complement the core holdings in your portfolio. These positions typically target specific trends or sectors with high growth potential, like urban cooling technologies. While they might represent a smaller percentage of your overall investments, they offer the possibility of above-average returns as these emerging trends develop, helping to enhance your portfolio's performance.

15 handpicked stocks

Urban Heat-Island Coolers

As cities grow hotter, these carefully selected companies are leading the charge in cooling urban environments. Our expert analysts have handpicked these stocks for their innovative approaches to climate-resilient infrastructure and energy-efficient cooling solutions.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17