Investors coined this profound investment philosophy to profit from eco-friendly companies. Cleantech, as a term originates from clean technologies.
Cleantech companies seek increasing efficiency, productivity, and performance by reducing negative impact on the environment.
- You generally use the term clean technology to describe firms dealing in transportation, manufacturing, agriculture, water and energy.
- You often interchange the term with green technology or Greentech.
- It has now grown to encompass high-growth industries like water purification, biofuel, wind and solar purification.
- Investment in clean technologies has leapfrogged and will grow exponentially in the coming days.
- Companies are creating funds only for investing in specific securities.
- UN Environment has released its Global Trends in Renewable Energy Investment report in 2018, where global investment in sustainable energy and renewables crossed $200 billion the previous year.
- You have $2.9 trillion investment in wind and solar power since the last 16 years now.
- China has been the largest investor in this sector. The US, however continues to show a steady decline in industrial investment.
- Investors seeking to pad their profiles and portfolios with clean technologies can find their presence in some of the biggest stock exchanges around the world.
- There are also exchange traded funds and mutual funds that focus on cleantech firms.
The Fundamental Aspects
- The demand for clean technologies is on the rise. Everyone’s constantly searching for more efficient and cleaner ways to preserve energy, and find more sustainable solutions in transportation, waste management and agriculture.
- The clarion call for renewable energy sources has spawned new technologies.
- The most famous examples are solar panels. Electric cars, wave energy, and wind.
- But energy isn’t the sole cleantech sector redefining Mother Earth for the better.
- It’s an emerging trillion-dollar industry. It has opportunities and room for corporates and startups alike.
- Remember that clean technology encapsulates more than just one Tesla.
- It’s a vastly expanding industry encompassing multiple sectors like power and energy, water and waste management, transportation, and biofuels and agriculture.
- Being one of the most disruptive and vastly expanding industries, it covers a wide range of technologies.
- Take the example of Foundation Capital. This VC company has more than 60 ventures currently.
- They focus on numerous technologies and cleantech startups as well. The firms organize energy data with big data.
- Companies like Echoing Green are taking millennium goals to the next level. These are social innovation funds acting as impact catalysts.
- They have been working towards building a process that ensures low carbon emissions.
- Companies like The Lab consistently investing in designing innovative financial apparatus to fund and foster climate solutions.
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The Road Ahead
The future of clean technologies, although look promising, they won’t come that cheaply or easily. There are myriad challenges or factors that could railroad one or more clean technologies. They can at least slow the technological development and implementation.
- Among the many wildcards, government support is very crucial. It’ll be critical to advance a host of clean technologies.
- To succeed, clean technologies will need reliable and adequate R&D budgets along with incentive mechanism to support and promote clean-tech products by consumers and businesses alike.
- Eventually, governments need to identify and eradicate subsidies that offer an unfair advantage to traditional technologies and fuels that compete with cleaner, new technologies.
- Robust economies are bound to be a vital factor in starting or spurring clean technology investments.
- Stock market dips or recession could curtail or retard private sector investments at a time when capital access to critical to your success.
- Industry resistance is also a crucial factor. People stifle competition through policies or lobbying.
- It could deal a severe blow to some firms and technologies. For instance, if energy utilities are making it difficult for consumers to generate their prowess and power, and to give excess power or connection back into the main grid, several markets for alternative energy fields and technologies could slow down significantly.
- Standards will also essay a crucial role ensuring the acceptance and growth of some clean technologies.
- For instance, alternative building products’ sales you make from plant-based items could languish sans changes in creating codes, allowing them to substitute for traditional/conventional products like drywall or wood.
Clean Investments And Significance
In countries like India, which has just started investing in clean technology, it has prompted a huge gap in energy’s demand and supply. The size of the clean technology market, including green buildings, renewables, water management, off-grid solutions, energy efficiency and waste management will cross $25 billion.
- It’s a foregone conclusion that demand for energy is galloping with fast industrial growth, rapid urbanization and rise in population.
- The rising demand and space for green energy is an important mention here. The abundance of opulent and renewable energy resources has had a huge impact on the growing social issues and environmental concerns you associate with conventional energy sources. They have an impact on fossil fuels.
- The amalgamation of growing demand for untapped resources and energy for renewable energy makes developing countries active player in the clean technology market.
Slump And The Future
However, the clean technology story is not a very happy one. Cleantech investments have slumped in 2012-2013.
- Figures from January 2014 showed that a whopping $318 billion in global investment in clean, renewable energy.
- The story has repeated itself time and again across the globe. China has also experienced a reduction in clean energy investments by 3.8% from its 2012 record.
- The investment has gone down by $61billion.
- Studies attribute this to big corporations in France, Italy and Germany, confining subsidy payments for brand new projects.
- Solar, biomass and wind all saw massive investments drop during the same period.
- Although for auxiliary clean technologies, entailing storage, smart grids, electric efficiency and vehicles.
- Investments are constantly on the rise. The steady decline in cleantech investments had some roadblocks in the industry.
- The misplaced and wrong skepticism about cleantech results’ bright future comes from two main sources.
Cleantech continues to be a toolbox of multiple technologies. When you realize a clean future, you know how it unties the reality of challenges.
Walter Moore is a notable management consultant and digital marketing expert. He is an experienced digital marketer and has helped e-commerce businesses in all niches gain with his effective marketing strategies and guidance.