The environmental sector is growing and growing quickly. The Secretary of State for Environment, Food and Rural Affairs, Hilary Benn MP, estimates that the UK's environmental goods and services industry is currently worth around £25 billion and is quoted as expecting this figure to double by 2015 on the back of (at least in part) a number of “green” initiatives set by the EC. On a global scale, the UK Government estimates that the world market for environmental goods and services could be worth £350 billion by 2010, as much as the global aerospace industry.
In particular the renewables sector has seen soaring rates of investment over the past year with the UN Environmental Programme announcing that that $148.4 billion of new money was raised in 2007 – a massive 60% increase over 2006.
The rapid growth of the environmental goods and services industry is an anomaly in today's economic climate of credit crunch and fear of recession, with numerous drivers creating new and expansive markets. Drivers such as climate change, increasing energy demand, political pressure, new environmental legislation, corporate social responsibility and the financial incentives of increased efficiency are generating a demand for environmental goods and services that has never been known before.
However, many companies are still struggling to obtain investment for the development of new environmental technologies and services.
Research has shown that a funding gap exists, preventing many Small and Medium Enterprises (SMEs), start-up companies and academic spin-outs from securing investment. Investors are cautious to venture into riskier, early stage investment projects, despite their global potential with many venture capitalists only considering opportunities in excess of £5 million from established companies, often such as those preparing for AIM listing.
As a result, numerous technologies fail to reach commercialisation. A recent report published by the United Nations Environmental Programme's Sustainable Energy Finance Initiative and New Energy Finance revealed that although $148 billion was invested in sustainable energy in 2007, early stage venture capital investment represented only $2 billion of this total, approximately 1.3%.
In 2007, Clarkslegal LLP and The Environmental Industries Commission established The EIC Environmental Investment Network, specifically aimed at bridging the funding gap for early stage environmental projects. Over the past year they have received a wealth of pioneering and innovative proposals which have the potential to create new and exciting markets within the environmental sector. Proposals received cover a broad range of environmental sectors including renewables, automotive and waste industries, with the majority of projects relevant not only to their domestic market but to the worldwide, international market. For example, a technology that significantly reduces transport emissions in the UK will significantly reduce transport emissions in the US, China or India and investors from these countries are currently trawling European research centres and universities to export such technologies.
Now looks to be the time for investors to investigate opportunities beyond their traditional criteria and explore the largely untapped supply of early stage, potentially groundbreaking environmental technologies before someone else does.
Matthew Evans
Network Manager, The EIC Environmental Investment Network
www.environmentalinvest.com
The EIC Environmental Investment Network (EIN) is an investment network designed to facilitate the raising of finance for the commercialisation of environmental technologies and services, specifically for start-up companies, SMEs and academic spin-outs, which have traditionally struggled to attract investment.
Established by leading commercial law firm Clarkslegal LLP and The Environmental Industries Commission (EIC) in 2007, the EIN has received over £300 million of potential investment opportunities covering a range of sectors including renewable energy, automotive, water and waste management.
Matthew Evans is an Associate Member of The Chartered Institute of Marketing and his qualifications include a Masters in Marketing, with Distinction. He has also recently completed The Chartered Institution of Wastes Management Waste Awareness Certificate. Matthew’s background involves a wide range of marketing and market research projects for a variety of organisations in the UK and Canada.
As EIN Network Manager, Matthew Evans is responsible for its day to day management on behalf of Clarkslegal LLP.
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