Big companies set to accelerate investment in cleantech

A survey of more than 300 executives worldwide, from corporations with revenues in excess of $1 billion, found in two-thirds of cases that cleantech had become a corporation-wide initiative championed by senior management.

Eighty-five per cent said that the pace of their company’s strategic response to climate change had ”significantly or moderately” accelerated compared with two years ago.

The report – 'Cleantech Matters' – found almost 80 per cent of these major corporations have acquired or would consider acquiring cleantech companies and 53 per cent expect the rate of cleantech company acquisitions to rise over the next five years.

The good news for anyone trying to get a cleantech start-up off the ground, is the finding that these multi-billion dollar companies said they had few qualms about buying cleantech products from, or otherwise partnering, nascent companies.

Only two per cent said they were unlikely to buy products and services from an emerging cleantech company, while 46 per cent said they would not hesitate to do so.

Others were more circumspect, saying they would only buy from such a company after conducting a thorough risk assessment (36 per cent) or a substantial pilot project (16 per cent).

According to the report, the economic downturn has done little to blunt the appetite of major companies for investing in clean technologies. 

Indeed, more than half (55 per cent) of the respondents indicated that recovering from the current crisis will speed the implementation of their company’s cleantech strategy.

The findings seem to chime with a recent survey conducted by the UK Government among the country's 300 business leaders, 43 per cent of whom questioned said they believed cleantech will be the fastest-growing sector of the UK economy up to 2020.

But it is at odds with other recent research findings which have indicated that investment in cleantech solutions have fallen as a result of the recession. 

Last month, for example, independent research company New Energy Finance reported a nine per cent dip to $25.9 billion (£16.2 billion) in the third quarter compared to the three previous months and a 22 per cent fall on the same period last year.

But while Ernst & Young describes current spending by the world’s biggest companies as “robust”, its bullishness for the sector is based on future spending plans.

“The vast majority of respondents project their companies will spend at least $10 million on cleantech investments by 2010, with 22 per cent predicting a cleantech spend of at least $100 million,” said Gil Forer, global director of Cleantech at Ernst & Young.

He added that more than three-quarters of the respondents expect their annual cleantech spending to rise over the next five years. 

“The pump is especially primed for companies with lower annual revenues, who will try to catch up to their bigger competitors by quickening their adoption of clean technologies, along with seeking out partnerships and acquisitions involving cleantech companies,” he suggested.

Angus McCrone, chief editor of New Energy Finance is one of the contributors to the Ernst & Young report, and while he reiterates his company’s view that investment in quoted clean energy companies for the whole of 2009 will be considerably down on 2008 – perhaps by as much as a third – he too is optimistic about the prospects for 2010.

“It looks like the clean energy sector will get a strong leg-up from government green stimulus spending in 2010 – and the money will arrive just as other sources of investment for projects and for companies are also recovering,” he said.