Tuesday, March 27, 2012

VC Investing in the Green Economy in Canada

As part of the SIPC webinar series, last week I had the pleasure of listening to Andrew Heintzman, President and CEO of Investeco, and a pioneer of green investing in Canada, discuss the why’s and how’s of cleantech investing.

He began be describing the ‘depressing global backdrop’ that makes investing in cleantech a necessity. As the world population grows, not only are we consuming more natural resources, but people in developing nations are aspiring to live the rich, resource intensive lifestyles of the western world. The confluence of demographics, resource scarcity, and environmental challenges means the economy of the future has to be a green economy.

Stating that ‘Capital markets like to flow to where significant capital can be productively employed.’, Heintzman believes that the next investment wave will be green. This includes areas such as resource efficiency, renewable energy, energy efficiency, biofuels and water.

He describes Canada as transitioning from a staples economy where wealth is based on exploiting raw natural capital without consideration of external costs, to a green economy, where we add value to our natural capital through innovation.

Heintzman provided examples of innovation in areas such as biofuels, desalination and biomaterials. However, for me, the most interesting story of an industry in transition was in forest products. Triton Logging Inc. are ‘underwater harvesting specialists’. According to their website, “Some 300 million trees have been completely flooded by hydro dams and still stand perfectly preserved beneath the world’s reservoirs. Today, Triton Logging is working around the globe recovering this forgotten resource, bringing value to communities and a clear environmental wood choice to consumers.” This demonstrates how the traditional forest products model can be transformed in an innovative way, by using something that people previously thought was waste.

The webinar concluded with Heintzman’s answers to some general questions on VC investing. Terms are more friendly today due to recent market turmoil. Sustainable investing is now less niche, and more broadly accepted. And the pie is still very small in Canada - we are significantly under investing in cleantech.

For a look at another company that’s finding new ways to be profitable in the green economy, check out this article on Waste Management Inc in the Wall Street Journal.

1 comment:

  1. I like companies with novel approach. Triton Logging is definitely one of them. Green technology offers great opportunity and if we will enter this sector soon enough, we can gain competitive advantage. On the other hand, it is always risky and there are still too many people in Canada who think that we should rather use our oil sands. And meanwhile the "green train" is leaving...