The Biden administration is developing its climate change policies, and a range of companies across sectors will likely benefit as these initiatives unfold, said Morgan Stanley.
"As both domestic and global policy continues to evolve, we see a multi-decade secular tailwind for companies that can most efficiently decarbonize the economy," the firm said Friday in a note to clients.
The call follows Biden's Thursday announcement of a new target for the U.S. to cut greenhouse gas emissions by at least 50% by the end of the decade. Also last week Biden convened 40 world leaders for a two-day climate summit, in a move underscoring the country's commitment to climate change-curbing policies going forward.
The new emissions target follows heavy spending for climate-related initiatives unveiled in Biden's more than $2 trillion infrastructure plan.
"Rising demand to decarbonize offers one of the most powerful secular themes in the market ... we see a growing demand outlook for not only renewable energy solutions, such as wind & solar, but some of the potentially more transformative decarbonization technologies, such as carbon capture and storage," Morgan Stanley said.
The firm scanned its coverage universe and gave its top picks across multiple sectors: utilities and clean tech, autos and shared mobility, multi-industry and energy.