Transforming date palm waste for water purification. AI-enabled carbon accounting. Natural hydrogen production using ultramafic rock. These are just three of dozens of cutting-edge climate technologies I’ve come across recently.
There’s no shortage of climate solutions in development, but the challenge is scaling them quickly – at a pace that keeps up with the growing urgency of this unfolding crisis.
Everyone loves to support bright ideas. Early-stage innovations often secure initial funding through angel investors, seed funds and the suite of sustainability-focused accelerator programmes offering grants and prizes.
But it’s a different story when they’re preparing to compete in the big leagues. As startups grow into SMEs, they need to build strong teams, invest in research and development and scale manufacturing and production. Many promising ideas falter at this stage because they can’t access the capital they need to grow fast and become fully realised, implementable technologies.
One SME founder I have worked with is raising a $40 million Series A round to file patents, acquire mineral rights and begin drilling hydrogen exploration wells. Another needs less than a quarter of a million dollars to set up a lab and develop a working prototype into fully functioning equipment that turns landfill waste into useable gas.
For institutional investors, these aren’t big asks. But without substantial green capital ready to be deployed, climate SMEs are facing a funding gap that puts their solutions in limbo.
Yes, there is a risk that an idea won’t pan out, or a company might fail, and the capital invested won’t be returned. But what of the risk of not funding these companies?
At this November’s “finance Cop”, a new climate finance target of $300 billion each year was agreed – tripling the existing target. But details of how this finance will be distributed and where the funds will be channelled to weren’t specified.
To bridge this gap, unlock progress and fast-track development, we need to ensure that sustained, risk-tolerant, inclusive financial support for SMEs during the crucial development stage is part of the solution.
Consider UK Sport’s Athlete Performance Awards. Historically, training for the Olympics was a financial struggle – meaning that mostly athletes from better-off backgrounds, with existing access to competition-level facilities, could go on to compete at the Games.
Today, the APA gives grants that fund the significant costs of training and competing at an international level to promising athletes in their first two years of high-performance competitions, when they’ve shown medal potential but aren’t yet earning money from prizes or sponsorships.
Receiving an APA affords athletes the opportunity to test their mettle and see if they have what it takes to continue on the road to greatness and a professional career. This system has significantly boosted Great Britain’s Olympics performance over the years, with 130 gold medals won in the Summer Games since Atlanta 1996.
We need a similar approach for climate finance: for companies on the verge of success, with technologies that have demonstrated their potential, who need accessible investment now to fuel their growth into the next stage.
Despite significant global commitments from governments, international organisations and institutions, funds are not being raised quickly enough, or in the right places, to get to the people and businesses who need them most. Instead, capital is being tied up in bureaucracy, or channelled towards low-risk projects that offer quick wins, but don’t tackle the hardest issues to solve. Accelerating the deployment of committed climate finance and getting it into the right hands is vital.
To do so, there must be a shift in how we evaluate the risks associated with funding SMEs, especially nascent climate technologies.
Much of the investment capital available today is controlled by financial institutions and investors, who are of course looking for businesses with proven potential to generate revenue and deliver shareholder returns – a track record that is hard for a growing SME to demonstrate.
We need to adopt a more nuanced view, with a greater weighting on the potential benefits of helping innovative solutions succeed, compared to the downside risk, and to create risk-tolerant vehicles and consortiums for green investments.
Yes, there is a risk that an idea won’t pan out, or a company might fail, and the capital invested won’t be returned. Or that even a successful climate solution doesn’t result in a path to profitability.
But what of the risk of not funding these companies? The risk that promising ideas will fall by the wayside, never to be developed into real-world solutions. The risk of not preventing the preventable, not preparing for the unpreventable, and not doing all we can to protect the planet, people and communities in the decades to come.
To overcome climate challenge, we must bridge this funding gap and bring actionable solutions out of limbo and into play for millions of people around the world. That’s why it’s crucial that the outcomes of Cop29 not only set a new collective goal for climate finance, but also directs that finance to where it’s most needed – bridging the gap between promising startups and climate solutions at scale. Through blended, pooled and inclusive finance vehicles, the world can accelerate the emission reductions and climate resilience we sorely need.
Not every athlete goes on to win the gold, but when they do, they make history. By accelerating climate capital and rethinking our understanding of risk, we can unleash the potential of solutions that find themselves in training camp today.
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COMPANY%20PROFILE
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COMPANY%20PROFILE
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What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
Developer: Ubisoft Montreal / Ubisoft Toronto
Publisher: Ubisoft
Platforms: Playstation 4, Xbox One, Windows
Release Date: April 10
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Need to know
The flights: Flydubai flies from Dubai to Kilimanjaro airport via Dar es Salaam from Dh1,619 return including taxes. The trip takes 8 hours.
The trek: Make sure that whatever tour company you select to climb Kilimanjaro, that it is a reputable one. The way to climb successfully would be with experienced guides and porters, from a company committed to quality, safety and an ethical approach to the mountain and its staff. Sonia Nazareth booked a VIP package through Safari Africa. The tour works out to $4,775 (Dh17,538) per person, based on a 4-person booking scheme, for 9 nights on the mountain (including one night before and after the trek at Arusha). The price includes all meals, a head guide, an assistant guide for every 2 trekkers, porters to carry the luggage, a cook and kitchen staff, a dining and mess tent, a sleeping tent set up for 2 persons, a chemical toilet and park entrance fees. The tiny ration of heated water provided for our bath in our makeshift private bathroom stall was the greatest luxury. A standard package, also based on a 4-person booking, works out to $3,050 (Dh11,202) per person.
When to go: You can climb Kili at any time of year, but the best months to ascend are January-February and September-October. Also good are July and August, if you’re tolerant of the colder weather that winter brings.
Do not underestimate the importance of kit. Even if you’re travelling at a relatively pleasant time, be geared up for the cold and the rain.
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
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Company%20Profile
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Zidane's managerial achievements
La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017
