Preparing the ground for CleanTech and sustainable solutions
Collaborative efforts from the public, private and non-profit sectors can help to accelerate Canada's transition to a clean economy. istock.com
Two years ago, on Earth Day 2020, 220 members of Canada’s Clean50 and 180 companies issued a call for adoption of a comprehensive “build-back-better” plan that included a strong focus on supporting the companies and innovations paving the way for a clean economy. This plan was then endorsed by 35 environmental non-governmental organizations. Today, Gavin Pitchford, Canada’s Clean50 Awards executive director and the CEO of Delta Management Group, is happy to report that progress has been made.
“Enormous investments have been and are being made in the clean technology space,” he says. “And this is helping to facilitate exponential growth in this market in Canada.”
“Governments are pouring funding into strategic industries – and this is helping to de-risk some of these critical technologies and initiatives, making them more attractive to investors and customers alike. ”
At the beginning of the pandemic, Clean50 leaders from every sector joined Mr. Pitchford in calling attention to the risk of Canada losing ground on cleantech innovation. “Funding support for these companies, which were struggling due to the pandemic, was urgently needed,” he explains. “Without timely access to capital, everything would have stopped. And those jobs and that intellectual property were at risk of leaving Canada.”
Fortunately, the federal government made it a priority to enable this industry to keep functioning. “As a result, these companies continue to exist,” says Mr. Pitchford. “And the payback is going to be huge.”
The pandemic served as a watershed moment for cleantech across the globe, with governments in North America, Europe and Asia looking to rebuild their economies with sustainability in mind. Part of this activity is driven by the realization that sustainable technologies drive job growth and economic opportunity alongside emissions reduction.
“Governments are pouring funding into strategic industries – and this is helping to de-risk some of these critical technologies and initiatives, making them more attractive to investors and customers alike,” Mr. Pitchford explains.
The Canadian government’s Budget 2022 prioritizes green economy initiatives with $12.4-billion over the next five years. The government also aims to mobilize private capital with a new $15-billion investment fund to encourage development and acquisition of clean, decarbonized technologies. The aim is to cut 2005-equivalent greenhouse emissions by 40 per cent by 2030, and achieve net-zero emissions by 2050.
Mr. Pitchford welcomes policies that are designed to pave the way for accelerating cleantech development and adoption, including R&D tax credits, accelerated depreciation, export support and early-stage startup funding. “We need a whole-of-policy approach to make sure these markets continue to flourish in Canada,” he says. “And we need government to keep sending the right signals. Many other governments, particularly China, are making huge bets in this space, and if we fail to keep up, we miss out on this opportunity.”
While government grants and individual investors can help startups get off the ground, these companies also need access to private capital to commercialize their products or services. “Venture capital investors are now competing for the most promising Canadian cleantech enterprises,” notes Mr. Pitchford. “We continue to see increasing job growth in the cleantech and sustainability space.”
Numbers reported by the TMX Group Ltd., which operates the Toronto Stock Exchange and the TSX Venture Exchange, show that the cleantech sector secured $3.09-billion in equity financings during the first six months of 2021, a 335 per cent increase over the same period in 2020.
A similar trend is evident in the global market. PwC data show over $60-billion (U.S.) flowing into cleantech startups in the first half of 2021, more than double the amount of $28.4-billion (U.S.), which was invested in all of 2020.
“Canadian investment is less than 5 per cent of the world-wide number. That’s not enough. To maximize our share of the global market for cleantech going forward, we need to scale faster and have greater ambition,” says Mr. Pitchford, who advocates for strategies that bring together the public sector, businesses, researchers and incubator facilities, investors and regulators. He says he built the Clean50 program for that very purpose.
“Through cross-sectoral collaboration, we can help to create a fertile ecosystem for accelerating the adoption of cleantech and sustainable solutions. We have seen many successful examples evolve from the Clean50 community,” he says. “I’m particularly excited about the impact I expect to see from several of the companies whose leaders we have recognized in the past two years: Acceleware, Ecoation, Hydra Energy, Loop Energy, Polystyvert, Summit Nanotech, to name just a few.”
All levels of support are critically needed, Mr. Pitchford emphasizes. After all, cleantech companies aim to tackle some of the toughest and most complex challenges of our time, and many need more access to advanced R&D infrastructure, tools and talent.
“We see a lot of organizations and individuals with a huge potential to create a sustainable economy and value for Canada,” he says. “But to be on par internationally, they require capital and support systems that can help them commercialize and scale their ideas and demonstrate the break-through technologies we are going to need to fight climate change.”
To view this report on The Globe's website, visit globeandmail.com
To view the full report as it appeared in The Globe's print edition: Clean50