Investing in CleanTech:
Download: Investing in CleanTech:
Download: Investing in CleanTech:
Every now and again, a ‘buzz’ phrase resurfaces in the financial sector. All of the advisers know what they mean. So, I’m left amazed by their seemingly endless patience in having to explain to me (the only non-financial bod in the office) what on earth it’s all about. This was certainly the case when they started talking about ‘Investing in CleanTech.’ Showing my ignorance, I thought this was some new-fangled computer powered by water or perhaps the absence of profanities? ‘Not quite!’ they diplomatically put it before I settled down for lesson time…
I was at least right in my assumption that CleanTech referred to ‘Clean Technology.’ But, alas, the concept doesn’t refer to computers befitting one of Bill & Ted’s Adventures. Instead, it refers to (and I quote!) “companies that seek to have a positive environmental impact by developing new technology across areas such as clean energy and sustainable resources.”
In all seriousness, this is one exciting idea! Each day, over 200,000 more people are born, putting further strain on our already wildly stretched natural resources. So, CleanTech offers real solutions that speak directly to the challenge of sustaining human life.
You’re probably thinking, ‘this is all well and good, but what does this mean for investors.’ So, let’s get into the detail!
What does CleanTech mean for investors?
We are all familiar with Greta Thunberg. And, though it seems a distant memory now, we probably all remember the climate change protests conducted by bicycle throughout London in 2019. So, it’s fair to say that the rising star of CleanTech has been firmly on the horizon for some time. Throw into the mix, the realisation of just how improved our natural world has been during national lockdown’s, and we are now more aware than ever of the negative impact non-sustainable practises have on our environment.
Resultantly, consumers are demanding more of companies and governments. They want to see changes to environmental policies and efforts made to oust unsustainable operations and practises. In short, they recognise the need for change! And, as a direct result of that, we are seeing greater interest and uptake in CleanTech investing.
Investing in CleanTech
Investing in CleanTech means investing in the universe of companies whose activities:
- improve resource sustainability
- support the energy transition (from fossil-based to zero-carbon energy production and storage)
- address the issue of water scarcity.
The following three investment areas are impacted by the finite amount of natural resources. So, it is likely that they will be amongst those to watch for exciting new investment opportunities of the future:
As the world seeks to cut carbon emissions, investment opportunities are appearing in the form of electric vehicles, battery technologies and emission reduction systems.
As people seek to do their bit for their environment within their own homes, the demand for green technology grows. Investors may want to explore opportunities in the development of energy-efficient technologies, such as renewables and/or efficient factories.
Recycling and waste reduction.
Public opinion is changing, and putting pressure on companies to limit their environmental footprint, providing investment opportunities in companies that are evolving their operational practises.