Cleantech: 4 BIG reasons to consider investing
Amid the current market volatility, it is worth spelling out why the climate tech sector that OnePlanetCapital specialises in, is very different from most investment sectors.
1. Climate tech is a diverse sector
Firstly, let’s define what we mean by climate tech – what we are talking about is companies in energy, transport, built environment, supply chain, consumer facing sustainability, carbon removal and agricultural technology. These companies will have products and services which fundamentally lower CO2 and/or methane emissions at scale.
The climate tech sector is broad and offers genuine diversity. A typical climate tech fund portfolio will include; B2B SaaS companies, construction companies, transport solutions around electrification, battery technology and businesses focused around carbon solutions and carbon accounting.
By investing into a fund with so many different growth sectors, investors should be protected from large shocks to any one industry.
2. Growth is backed by regulation
The reason this sector is so markedly different from others is that the long term parameters are fixed in terms of where this market is going. Unfortunately the world is careering towards 1.5c of warming in the short term, possibly 3c in the long term, the wildfire season is in full swing and the overarching crisis gets worse. What we are seeing in the UK in July 2022 will be many times worse by 2050.
Climate change doesn’t care about inflation or market turmoil and the drivers are increasing every year. If we translate this into human action – net zero targets are in place, corporations and governments alike are rushing to meet them and the transition to a low carbon economy has a regulatory infrastructure in place in most economies. So to a large extent the climate tech locomotive is running and gathering momentum all the time; it is unlikely to change course and we are only at the beginning of this journey.
At OnePlanetCapital we believe that climate tech is a long term, high growth sector as so many of the drivers are backed by increasing levels of government policy and regulation.