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Waste industry is a safe bet for investors

Andrew Hartley

Every great business idea needs one thing above anything else: investment. You might have dreamed up the most ingenious invention since the wheel, but without financial backing your idea can remain stubbornly stuck on the drawing board. Our sector is no exception.

We are certainly not lacking when it comes to ideas and innovation - the stuff that whets investors’ appetites - and there is no shortage of solutions to help society become more resource efficient and recycle more.

But the big question is: how do you bring together investors and the green technology businesses that need their cash? And how do you persuade those investors to part with that cash? You could try TV’s Dragon’s Den, but I would prefer an approach which requires a little less public humiliation.

“Green investment can help to take us out of the economic downturn and beyond”

In our region, CO2Sense Yorkshire is seeking to bring investors and businesses together through its established investment networks. Last month, for example, we held a joint event in Leeds with the Yorkshire Association of Business Angels, which gave nine businesses in the region the opportunity to pitch for new investment. If businesses in our sector are to realise their full potential, this is just the sort of ‘marrying up’ exercise we need more of.

It is the job of organisations such as ours to open doors for businesses, helping them to make the connections that will make sure their companies grow and prosper. Get it right and it’s a win-win situation.

But investors need to be convinced not only of the worthiness of individual businesses pitching for cash but they also need persuading of the environmental technology sector’s long-term prospects. In short, they want to know that we’re a safe bet.

Here, corporate social responsibility (CSR) factors and a concern for the planet’s future will probably be of less concern. Instead, investors are likely to focus their questions on operational cost savings and improvements to bottom-line performance which their investment could facilitate. I think our sector is on solid ground on this front. If we can convince investors that our products and services can help businesses to reduce costs, increase their competitiveness and operate more efficiently, I am convinced they will sit up and take notice.

The opportunities are vast. The global low-carbon goods and services market is currently worth £3 trillion and is predicted to rise to £4.5 trillion by 2015. And if you take a close look at where investment has been going, following recent economic stimulus packages, there are more encouraging signs. In China, 35% of the government’s total recovery package went on green investment; in South Korea it was 65% and in the US and the EU it was 15% each. Governments around the world seem convinced that green investment can help to take us out of the economic downturn and beyond.

The UK is already the world’s sixth largest low-carbon and environmental goods and services economy. The sector employs 880,000 people and was worth £107bn in 2007/08; with predictions it will rise by £45bn by 2015. I’ve no doubt these figures will impress any dragon in the den. And that has got to be good news for our sector as we make our pitch to investors for finance to help us grow in the years ahead.

Andrew Hartley is operations director at CO2Sense Yorkshire

 

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