As Europe struggles with soaring electricity and gas bills, Goldman Sachs says global companies focusing on energy efficiency are set to outperform. Energy costs are sky high in Europe right now, after a surge in gas prices and plummeting supply following Russia’s invasion Ukraine. In a bid to tackle the issue, the European Union has passed emergency measures to push for mandatory power savings. That means that countries in the region must reduce energy consumption by 5% during peak hours , and reduce overall electricity demand by 10%. Goldman added that recent supply disruptions have also “re-emphasised the need to improve energy efficiency.” “We think Energy Efficiency companies can outperform over the short term, with the focus on energy efficiency to tackle the current energy crisis that followed the Russian invasion of Ukraine,” the analysts wrote in a note on Oct. 3. “[And] over the long term, with the focus on energy efficiency to tackle the climate change and reach the ambitious ‘net zero’ targets.” The bank said its list of energy efficiency companies offered attractive investment opportunities because: Their valuation looks cheap compared to their growth, with 15% earnings growth expected over the medium term, versus 6% for the wider market. These firms have spent two times more than the market on research and development, as well as growth capital expenditure. Their absolute and relative valuations looks cheap compared to history. They are likely to get noticed by more investors focused on ESG, or environmental, social, and governance factors. These are some of Goldman’s energy efficiency picks: In insulation, the analysts like Kingspan Group and Rockwool . “Any energy efficiency improvement will have to focus on insulation,” the analysts wrote. Goldman also expects companies to invest in making systems and equipment more efficient. Beneficiaries include ABB and Siemens Energy , according to the bank. “Together with insulation, the idea behind energy efficiency is to consume less and better. This will be possible with the rise of technology,” the analysts added. “Over the last five years the stock of connected appliances, devices and sensors has grown by an average of around 33% per year and it recently overtook the number of people on the planet. Most of these are measuring devices are sensors and smart meters or smart lighting,” Goldman added. Its picks in energy-efficient lighting include Signify . The bank also listed companies that are not specifically energy efficiency names but broadly related, including semiconductor firms such as Infineon and ASML .