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What REALLY drives clean energy stocks - Fear or Fundamentals?

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  • Zheng, Yuqi
  • Lucey, Brian

Abstract

This study investigates the relationship between the S&P Global Clean Energy Index and novel factors based on the GDELT Database, such as global news confidence levels, environmental sentiment, media coverage preferences in the US and China, and the ratio of environmental to overall reporting. We identify variables sourced from recent literature. Using the Isolation Forest method to select potential explanatory variables, Extreme Bounds Analysis reveals that “Fear” factors such as media sentiment and confidence show consistent and significant correlations with the S&P Global Clean Energy Index. These findings highlight the influential role of media sentiment in driving market confidence and industry growth. In contrast, some traditionally popular “Fundamental” factors, such as the Global Financial Stress Indicator, Green Bond Index, and US Dollar Index, lack robustness. While they appear reliable under normal distribution models, they exhibit substantial uncertainty under alternative models, limiting their explanatory power.

Suggested Citation

  • Zheng, Yuqi & Lucey, Brian, 2025. "What REALLY drives clean energy stocks - Fear or Fundamentals?," Energy Economics, Elsevier, vol. 148(C).
    • Handle: RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325003822
    DOI: 10.1016/j.eneco.2025.108558
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    References listed on IDEAS

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    1. Zheng, Yuqi & Lucey, Brian, 2025. "Central bankers’ political discourse as a driver of clean energy markets," Research in International Business and Finance, Elsevier, vol. 80(C).

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