One of the climate efficiency champions in our Storebrand Smart Cities fund is in the spotlight at this November’s COP29 climate summit.
Trane Technologies offers efficient heating and cooling solutions to decarbonize the built environment and transport sector. It has a wide range of these products, operating under brand names such as Trane, ThermoKing, AL-KO, American Standard, Frigoblock, ICS Cool Energy and Thermocold. As the ongoing COP29 climate summit underlines, this company’s products are at the heart of a rich vein of demand for climate mitigation solutions.
With urbanization continuing to grow, cities are heating up at twice the speed of the global average - consequently the cooling industry is projected to double its emissions by 2050. That sets up a scenario in which reducing the power needs of such cooling equipment could slash the sector’s projected emissions by at least sixty percent [1].
It’s hardly surprising then, that Trane Technologies' products are deeply relevant solutions for five events at the COP29 climate summit in Baku, Azerbaijan [2]:
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“Net-Zero – Turning Commitments into Reality
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Revolutionizing Heating and Cooling for Building Decarbonization
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Broadening the Benefits of Clean Energy – Community Engagement and Next Generation Workforce Development
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Catalysts for Change – Transforming Food Supply Chains for Reduced Waste and Sustainable Production
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Circularity and Decarbonization of the Built Environment – Pathways to Net-Zero”
From a portfolio manager’s perspective, a firm like Trane Technologies offers several interesting properties. First, the products it provides solutions to severe societal challenges related to heat waves and food waste. Second, it rides on two powerful global megatrends, global warming and urbanization, that are likely to continue in the near future. The forecasts therefore suggest that underlying demand for Trane’s products is likely to remain stable for decades to come.
There’s more to the company as well. Other reasons we’re positive on the company are its well-run, profitable operations and sound corporate governance. Together, the indicators add up to make Trane a promising long term investment case.
Trane’s collaboration with another solution company, the US software company Autodesk, has been another piece of breaking news this month. Autodesk is a position in the Storebrand Global Solutions fund due to its exposure to the “technology enabler” theme, while Trane Technologies is a position in Storebrand Smart Cities in the “heating, ventilation and air-conditioning” segment. Such “inter-solution-company” collaboration is always appreciated, since it reinforces innovation and value chain strength for both parties.
Sources:
[1] UNEP (2023), Key measures could slash predicted 2050 emissions from cooling sector
[2] Trane Technologies (2024), Trane Technologies Champions Decarbonization, Sustainable Cooling and Climate Policies at COP29 | Trane Technologies