3 reasons why renewables could be an attractive option for ESG investors

The use of renewable energy in the UK is on the rise. For ESG investors, renewables could present an attractive opportunity from both a financial and a values perspective.

While ESG investors consider environmental, social, and governance factors when making investment decisions, the expected returns and risk remain important. Here are three reasons why renewables could tick these boxes.

1. Renewable generation reached a record high in the UK in 2025

For a company to be successful, it needs a market to sell its products or services to. Data from the UK suggests that the renewable energy market is growing as the economy shifts away from fossil fuels.

According to the government’s energy trends data (2 April 2026), renewable sources generated a record 52.5% of the UK’s electricity in 2025. Wind and solar power generated more than ten times the energy they did in 2015.

2. Net zero targets suggest long-term growth

Past data suggest there’s an upward trend for renewables. This is supported by the government’s net zero targets and commitment to decarbonisation. The current goal is for the UK economy to reach net zero by 2050, and renewables play an important role in the strategy.

For investors, these commitments provide long-term visibility and suggest that the use of renewables will continue to grow.

The UK isn’t the only country that has set ambitious net zero targets. Indeed, according to Climate Action Tracker (27 October 2025), as of the end of 2025, 145 countries had announced or were considering net zero targets. The countries represent close to 77% of global emissions and could signal strong demand for renewables.

3. Renewable technology is becoming more efficient

As the renewable energy sector continues to mature, the technology is advancing. As a result, the sector is becoming more efficient. Over time, this could lead to cost reductions that might benefit investors.

Renewables could tick boxes across all three ESG pillars

Renewables might be attractive to investors from a values perspective. Indeed, they could tick several ESG boxes.

There are clear environmental benefits to investing in renewables. The sector plays an essential role in reducing economies’ reliance on fossil fuels and reducing carbon emissions. With climate change becoming a pressing issue, renewables could help the world tackle one of the largest challenges it faces today.

Some investments might also support social and governance goals.

The cost of fossil fuels is volatile and may be affected by numerous factors. Indeed, at the start of 2025, conflict in the Middle East led to higher energy prices in the UK. This can place pressure on family finances.

Renewables could promote greater energy security and support low-income households. As a result, they may tick the social box for some ESG investors.

In terms of governance, the use of renewables could support greater price transparency within the energy sector.

How to invest in renewables

If you’re interested in investing in renewables, there are several options to consider, including:

• Purchasing stocks and shares in renewable companies
• Investing in a fund that’s focused on renewable energy, which would pool your money with that of other investors to invest in a range of companies that match the fund’s criteria
• Green bonds or infrastructure bonds that aim to support renewable projects.

As with any type of investment, it’s important to consider your risk profile. While an opportunity to invest in renewables might be attractive from a values perspective, it doesn’t automatically mean that it’s appropriate for you. A tailored investment strategy could help you assess different opportunities.

It’s also important to note that all investments carry risk, and their value could rise and fall. There’s no guarantee that an investment will produce returns, and you might lose some of your money.

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If you have any questions about your investment portfolio or how you might incorporate ESG strategies, please get in touch.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.