Accelerated business response to climate change drives cleantech investment.US$5.2 billion invested since January 2007 LONDON -- As climate change moves up the corporate agenda, cleantech investment is reaching record levels according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Ernst & Young. Climate change challenges are creating opportunities for next generation technologies as companies seek to respond to stakeholder stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property. expectations, current and anticipated regulation, and rising energy costs. In addition, climate-smart companies view this as an opportunity to make them more innovative, efficient and competitive. As part of a series of research on climate change transformation, an Ernst & Young study of 150 global companies found that 90% of those surveyed were undertaking climate change initiatives, with disclosed financial commitments totaling US$276 billion over the next ten years. Another Ernst & Young study1 revealed that 35% of corporate venture capital programs will increase their investments in cleantech companies next year and 44% within the next five years, supporting the finding that corporations are accelerating their climate change response. A third Ernst & Young study2 showed that 51% of institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. globally always or sometimes consider a company's climate change response when considering investment in a new issue. This accelerated corporate response to climate change is reflected in global venture capital investment trends. Ernst & Young's Venture Insights([R]) reveal that as a proportion of global venture capital investment, cleantech has grown rapidly - up from just 1.6% of total investment in 2003 to 11% in 2008. And in terms of value, global venture capital investment in cleantech is set to significantly exceed the record US$3 billion invested last year, having already reached US$2.2 billion in the first six months of 2008. Gil Forer, Global Director, Cleantech, IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. and Venture Capital Initiatives at Ernst & Young commented: "The climate change challenge is global and requires a transformation of infrastructure and practices that crosses industries and supply chains. We need not only to accelerate levels of investment in innovative clean technologies, but also to promote partnership and collaboration Working together on a project. See collaborative software. among multinational corporations
All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. ." According to Ernst & Young's Venture Insights([R]), the US accounted for the majority of venture capital investment during 2007 and the first half of 2008, raising US$2.5 billion and US$1.6 billion respectively. Europe, the second largest market, raised US$443 million and US$353 million over the same period. China increased from US$30 million in 2007 to $84 million in the first half of 2008. And Israeli cleantech investment also accelerated rapidly, up from US$4 million in 2006 to US$134 million in the first half of 2008 (largely on the back of a US$115m solar energy solar energy, any form of energy radiated by the sun, including light, radio waves, and X rays, although the term usually refers to the visible light of the sun. company mega-deal). As of 30 June 2008, there were 549 private venture capital backed cleantech companies globally with US$8.9 billion in venture capital. The US is the largest region with 301 venture-backed cleantech companies that have received cumulative investment of US$7.29 billion, weighted towards solar and biofuel bi·o·fuel n. Fuel such as methane produced from renewable resources, especially plant biomass and treated municipal and industrial wastes. bi companies. Similarly, Europe (203 companies), China (25) and Israel (16) are weighted towards solar manufacturing in terms of capital invested. China is emerging as a world leader in solar with four companies that have received cumulative investment of US$56 million. Silicon Valley is by far the biggest global hotbed hotbed, low, glass-covered frame structure for starting tender plants. It differs from a cold frame only in that the soil is heated—either artificially as by underground electric wiring or steampipes, or naturally with partially fermented stable manure, which in terms of cleantech activity, comprising 74 private venture-backed cleantech companies with a total of US$2.2 billion invested to date. The UK is in number two position in terms of number of cleantech companies, with 48, but only fourth in terms of capital invested (US$426 million). Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, is in fourth place in terms of companies (on par with Germany at 34) but in second place in terms of capital invested (US$1.1 billion). This comparison of venture capital hotbeds reveals that US cleantech companies are more highly capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. than their counterparts elsewhere. Beyond venture capital Cleantech indices have significantly outperformed the broader market in recent years and in 2007 institutional investors allocated US$23 billion in funds to cleantech equity investments. Cleantech private equity investments totaled US$50 billion in 2007. Global cleantech M&A activity surged by 46% in terms of number of transactions and 140% in terms of transaction value from 2006 to 2007. Likewise, during the same period, cleantech IPO transactions grew by 24% and capital raised by 98%. While there have been relatively fewer transactions in 2008 due to global capital market conditions, the value of M&A and IPO deals concluded in just the first six months of 2008 exceeded the levels of the full year 2005. Gil Forer concludes: "Cleantech has passed an important investment tipping point The point in time in which a technology, procedure, service or philosophy has reached critical mass and becomes mainstream. See network effect. See also tip and ring. . Demand for cleantech solutions is increasing due to higher energy and resource costs, regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. and the desire for corporations to pursue climate change related market opportunities. This, combined with the attraction of talent and investment to the sector and resulting accelerated technological change, has created a self-reinforcing dynamic of innovation and company creation, which is vital for any successful response to the climate change challenge. Cleantech is here to stay." -ends- About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . Worldwide, our 130,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential. For more information, please visit www.ey.com. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients. 1 Global Corporate Venture Capital Survey 2008 2 Global Measures that Matter 2008 |
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