Global headwinds such as resurgent interest rates and pandemic induced supply chain difficulties may have led to a cyclical downturn in share price fortunes for listed greentech companies lately, but the rivers of private capital pouring into the sector continue unabated.
Industry commitments to reaching net zero carbon by 2050 are growing, bolstered by the trend toward embedding ESG principals into corporate decision-making and the likelihood of government interventions for non-performers. So the green transition is happening faster than most people are aware. Industry leaders like former Bank of England CEO Mark Carney last year announced an alliance of investment firms to set its sights on facilitating the staggering $100 Trillion in investment estimated to be needed for decarbonisation of the global economy over the next two decades.
So with new climate based investment funds launching almost weekly and private equity investors taking a 40 year view, the future remains very bright for the emerging “greentech” sector. The definition of greentech covers just about any industry involved in directly or indirectly reducing emissions of greenhouse gases including renewable energy, alternative transport and new foods. It’s a space that many New Zealand firms could comfortably fit into. For example Taupo based Geo40 that has begun extracting high value lithium salts from geothermal waste water, for use in electric car batteries. ThincLab alumni such as Berkano Foods, Kea Aerospace and Zincovery have also been playing their part directing us toward a greener future.
Estimates vary depending on analysis methodology but it has been estimated that around $100 Billion in fresh investment went into American and European companies working on decarbonisation technologies across 2021 according to a report by PWC. Research firm BloombergNEF stated that over half of that investment went into startups. Venture capital funds are now allocating 14% of their capital into the sector on average. But more significantly, some of the largest global investment funds have begun to sell down holdings in polluting industries, in favour of reinvesting in climate friendly businesses and infrastructure projects.
ThincLab Canterbury works with a number of companies in cleantech and is a delivery partner for the 2022 Food, Fibre & Agritech Supernode Challenge. We are committed to showing environmental and sustainability leadership through supporting our client companies. If you have a scalable, technology based solution that addresses environmental problems or decarbonisation, please contact us for advisory support with strategy, partnerships and capital-raising.