Macroeconomic drivers have reignited “cleantech” investment and expanded its reach across sectors and industries, according to research published by cleantech research firm Kachan & Co. and non-profits As You Sow and the Responsible Endowments Coalition.
The new, freely downloadable 38-page report titled Cleantech Redefined: Why the Next Wave of Cleantech Infrastructure, Technology and Services Will Thrive in the 21st Century, describes and examines the latest investment opportunities and trends across clean energy, efficiency, water, transportation, agriculture, energy storage, air and environment, and clean industry.
The report takes a macro look at the adoption of clean and green products, services and related infrastructure worldwide. It finds that after a decade of cautious experimentation by early adopters, cleantech-themed products and services are now bridging the gulf to wide mainstream adoption. Further, it details how new corporate venturing and strategic investment into cleantech by some of the largest multinational companies in the world is augmenting the role traditionally played by venture capital.
“Cleantech-related investments attract nearly a quarter of all capital. And the world’s largest companies are increasingly buying their way into the space. That’s impressive for an investment theme that just turned 11 years old,” says Kachan & Co. Managing Partner Dallas Kachan. “Cleantech is now suddenly everywhere and is poised for even more rapid expansion now that the largest companies in the world have discovered it as an opportunity for cost savings and profit.”
The report examines expectations versus execution over time in cleantech. It draws parallels with the mismatch of expectations at the introduction of other breakthrough technologies such as IT, the web, and biotechnology, all of which underwent a correction and period of disillusionment before expectations and execution ultimately equalized. It underscores that cleantech industries continue to quietly grow; for example, the U.S. solar industry now employs nearly twice as many people as the U.S. coal industry.
Population growth, increasing resource scarcity, increasing urbanization, energy and resource dependence, climate change and risk mitigation are among the continually intensifying cleantech drivers detailed in the report.
“It’s an exciting time to be investing in cleantech—the opportunities and the potential for growth are tremendous, especially in contrast with increasingly risky fossil-based resources,” adds co-author Danielle Fugere, president of As You Sow. “Cleantech investment is ideal for endowments, pension funds, and other institutional investors seeking to achieve solid risk-adjusted returns and, most importantly, act in their constituents’ best long term interests, both financially and environmentally.”
According to Dan Apfel, executive director of the Responsible Endowment Coalition: “There is an urgent need for investments in solutions to climate change. Every dollar invested in cleantech helps increase efficiency and reduces the use of fossil fuels. This report offers real answers for investors looking to both divest from fossil fuels and invest in a more sustainable economy.”
The Cleantech Redefined report is available for free download from kachan.com, asyousow.org and endowmentethics.org. It contains specific investment ideas within the cleantech category, including leading public large cap ($10 billion plus) companies, small cap companies and investable funds in leading cleantech industries. It also identifies hundreds of noteworthy private companies, some of which may ultimately issue public offerings. It is intended for pension fund administrators, endowment trustees, other institutional investors or anyone with an interest in investment opportunities within cleantech.