This month, as a part of our Investor Network Speaker Series, we hosted experts in the areas of clean energy, water, and waste to discuss investing trends in those fields. Resource efficiency is one of Impact Engine’s four impact target areas (the others are education, health, and economic empowerment). Here are some of our key takeaways:
Amy Francetic was our energy expert on the panel. She is the Senior Vice President of Invenergy, the largest independently owned renewable energy developer in the world. Formerly, Amy was a co-founder and CEO of Clean Energy Trust. Amy believes the movement to clean energy is being led by two main drivers: policy and innovation. The extension of tax credits for wind and solar, as well as the Paris Accords, have helped to level the playing field for generators. However, there is still a misperception that clean energy is not affordable. At current market prices and without subsidies, wind actually beats coal and nuclear, and solar is making progress. This is partially due to technology innovation. Some of the credit also goes to business model innovation. Startups are learning to work with incumbent players who have put in place billions of dollars worth of infrastructure. They are also finding funding from non-traditional clean energy funders, including family offices, foundations, and corporates who are willing to take early stage risk and long return horizons.
Scott Mosley joined us from Milwaukee, where he is the Director of Investment Strategies at the Water Council. He is responsible for developing and implementing an early stage investment and investment education program for water technology. He explained how we’re now moving out of the pure sustainability phase of water strategy toward better risk management of the resource. However, there is still not a great deal of investment in this area, with only $44M of investments into water tech companies last year. That is partially because clean water supply is a public health issue, so municipalities are hesitant to implement new technology where there is a risk that glitches or downtime cause illness. That said, water intensive industries are beginning to realize the importance of water access and in the coming years Scott thinks we will see the movement of corporations and populations toward areas with direct access to water. He also expects that water will start being priced in the next 5 years, which will enable the creation of benchmarks and ways to assess investment opportunities.
Finally, Rob Kaplan, Managing Director of the Closed Loop Fund in New York City, joined us to share his experience in the waste and recycling investment market. Waste is a trillion dollar business, it is recession proof, and it is only a growing problem in emerging markets. But despite those strong macro factors, the sector lacks a large number of investors with domain expertise. That is partially because of the rapidly evolving waste stream. Used electronics is relatively new to the scene and is growing exponentially given how quickly people cycle through consumer technology products. New forms of packaging and food waste are getting a lot of attention as they create significant costs for municipalities to landfill. However, Rob sees tremendous opportunity in working across the system with cities, recyclers, and corporate partners, who comprise the investor base of Closed Loop’s debt fund. Investing in technologies that improve the recycling stream means lower input costs for their packaging and containers. To drive innovation in the space, Rob’s team is launching an early stage venture fund built to leverage the scale of the Closed Loop Fund platform.