Clean Energy ETFs in Spotlight as US Pulls Out Of Global Climate Treaties

In a decisive move that has sent shockwaves through international diplomacy and energy markets, the Trump administration has formally withdrawn the United States from the bedrock United Nations Framework Convention on Climate Change (“UNFCCC”), the 34-year-old foundational treaty for global climate action. This action, part of a broader disengagement from dozens of international organizations, marks the most significant U.S. retreat from environmental cooperation in history. 

For the U.S. clean energy industry, already reeling from rollbacks of the Inflation Reduction Act (IRA), this withdrawal creates profound uncertainty. As one can imagine, following this withdrawal, the immediate spotlight is now on clean energy stocks and, by extension, Exchange-Traded Funds (ETFs) holding them, as investors seek to navigate a landscape where domestic policy support may wane while global decarbonization efforts accelerate elsewhere.

The Domestic Chill: Impact on U.S.-Concentrated Stocks

Trump’s anti-climate policy has already been hitting the U.S. clean energy industry of late. Evidently, in the first quarter of 2025, investments totaling $7.9 billion for 16 large-scale factories and other projects were cancelled, closed or downsized in the first quarter of 2025, according to a study by E2 (as cited in a Forbes report).

The latest pullback of the U.S. government from as many as 66 international organizations, including the International Solar Alliance, creates a policy vacuum that will directly hurt U.S. clean energy companies with high domestic concentration.  These firms, which include domestic solar installers, wind farm developers, and electric vehicle charging networks, have historically benefited from federal policy signals and international agreements that fostered market stability and investment.

Without federal backing or international treaty protections, these firms are most likely to face:

•    Diminished Subsidies: The loss of global climate finance and domestic regulatory support will make U.S. solar and wind projects more expensive to finance.

•    Marginalization: As the UN climate chief Simon Stiell noted, U.S. companies will likely bear the brunt of this "colossal own goal," facing higher insurance and energy costs as the rest of the world advances with cheaper renewables.

Analysts fear this could stifle growth and innovation for companies reliant on the U.S. market, as future regulatory support and clean energy targets become unclear. Consequently, renewable stocks with high concentration in U.S. revenues may face increased volatility along with downward revenue and margin pressure.

The Global Pivot: Shifting Operations to Allied Soil

While the current U.S. government’s stance has been unfavorable for the renewable energy industry, the global clean energy industry has been accelerating at a steady pace, with China being the center of attraction.  To this end, the International Energy Agency (IEA) stated in its October 2025 report that in emerging economies across Asia, the Middle East, and Africa, cost competitiveness and stronger policy support are spurring faster growth of renewables. In particular, India is on course to become the second-largest renewables growth market globally, after China, and is expected to comfortably reach its ambitious target by 2030.

Therefore, Trump’s retreat will force U.S. clean energy firms to accelerate their expansion into international markets where they are already enhancing their footprint. 

For instance, U.S. wind energy giant GE Vernova Inc. GEV announced its first onshore wind repower upgrade agreement outside the United States in November 2025, with Taiwan Power Company to supply 25 repower upgrade kits in Taiwan. 

Similarly, of late, California-based Enphase Energy ENPH has rapidly scaled its Virtual Power Plant presence in 2025, allowing thousands of homes in the Netherlands, Germany, the UK, and Belgium to connect their systems to smart tariff programs.

Clean Energy ETFs in Spotlight

Considering the aforementioned discussion, the recent withdrawal of the United States from global climate treaties will likely trigger investors to look for clean energy stocks with a "global footprint" rather than those tethered to the shifting sands of U.S. federal policy. 

By focusing on the following ETFs that hold globally operating clean energy stocks — and investing where appropriate — investors can potentially benefit from the projected 4,600-gigawatt (GW) increase in global renewable power capacity by 2030, according to the IEA.

iShares Global Clean Energy ETF ICLN

As the largest clean energy ETF, ICLN offers broad exposure to 101 companies that operate in solar, wind, and other renewable sectors worldwide. It holds net assets worth $1.98 billion. Geographically, outside the United States, China has 13.68% of this fund’s holdings, Brazil holds 8.63%, India has 5.32%, in addition to a few more nations. Its top five holdings include Danish wind turbine manufacturer Vestas Wind Systems VWDRY (6.59%) and Spanish energy company Iberdrola IBDRY (6.50%). 

ICLN has surged 55.4% over the past year. The fund charges 39 basis points (bps) as fees. Its volume is good at an average of 3.10 million shares a day. 

Invesco WilderHill Clean Energy ETF PBW 

This fund, with market value of $736.5 million, offers exposure to 63 companies engaged in the business of advancing cleaner energy and conservation. Geographically, outside the United States, Canada has 9.64% of this fund’s holdings, China holds 6.74%, Brazil and Chile hold 1.65% each, in addition to a few more nations. Its top five holdings include Swizz-domiciled lithium projects developer Lithium Americas (Argentina) Corp. LAR (2.01%) and UK-based metal company Lifezone Metals LZM (1.99%).

PBW has soared 63.1% over the past year. The fund charges 64 bps as fees. Its volume is at an average of 0.75 million shares a day.

First Trust Global Wind Energy ETF FAN

This fund, with net assets worth $209.3 million, offers exposure to 43 companies throughout the world that are active in the wind energy industry based on analysis of the products and services offered by those companies. 

Geographically, outside the United States, Denmark has 15.07% of this fund’s holdings, Germany holds 13.69%, Spain has 11.57%, and China holds 8.84%, in addition to a few more nations. Its top five holdings include VWDRY (10.24%) and Israeli renewable energy company  Enlight Renewable Energy ENLT (6.40%). 

FAN has rallied 50.8% over the past year. The fund charges 60 bps as fees. Its volume is at an average of 0.03 million shares a day.

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This article originally published on Zacks Investment Research (zacks.com).

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