Survey confirms green technology funding gap

The survey  – 'The Green Funding Gap: Environmental Investment Missing In The Recession' – surveyed 390 companies from the environmental sector on the existence of a funding gap and the barriers to growth within the low carbon and environmental industry. It also examined the effects of the recession across the sector and where companies are turning to for external finance today.

The poll revealed 57 per cent of respondents have been affected by the economic downturn and those who have not been affected, typically attribute their stability to environmental legislation or long-term public sector contracts. Respondents also confirmed that a funding gap does exist – financial support is lacking to commercialise environmental technologies and Government support is prevalent for research and development grants, but not for the next stage of development: commercialisation of innovation.

As many as 69 per cent of respondents said Government was not doing enough to incentivise the sector.

Significantly, the survey findings come in the wake of a Government announcement that it is to invest £150 million in a UK Innovation Investment Fund, which could generate up to £1 billion of venture capital for specific sectors, including low carbon businesses.

It also follows an announcement by the Carbon Trust that it is launching a ‘Clean Tech Revolution’ after analysis it commissioned revealed that, by taking a bold new approach to commercialisation, the UK could generate up to £70 billion for the economy and create almost 250,000 jobs in offshore wind and wave power alone, and a call by manufactures’ organisation, EEF, for a £1 billion prize in a race to industrialise low carbon technology.

Commenting on the environment sector survey findings, Michael Sippitt, joint chair of the EIC Environmental Investment Network said: “This survey unquestionably confirms a funding gap exists, creating a significant barrier to environmental innovation, because of a lack of financial support. Banks and many equity investors are becoming increasingly risk averse and are not supporting new technologies. Government must ensure these funding sources are continually accessible for environmental innovators.”

Adrian Wilkes, chair of the EIC, added: “Policy and legislation have huge effects upon companies’ experiences in a recession and the survey shows a need for a strategic vision and a timetable of future environmental policy targets.”