The year 2050 might sound like a long way off, but there is much work to be done if New Zealand companies want to maximise the huge commercial opportunities that clean tech presents.
Clean technologies are a broad group of goods and services, which, through some form of innovation, deliver both commercial returns and measurable benefits to the environment. Basic examples include solar power, electric vehicles, biofuel and energy efficient lighting.
Clean tech matters to New Zealand because our economy and national brand is intrinsically connected to the natural environment. Compared to most other nations, it is disproportionately important for New Zealand to maintain high standards of environmental performance, in order to safeguard our long-term ability to remain productive. This is especially true for the goods and services where we enjoy a competitive advantage.
The pervasive argument that 'environment costs business' is no longer valid. A more holistic (and accurate) perspective is that 'environment enables business'. Market analysis in 2013 by EY measured publicly listed clean tech companies' market capitalisation at US$170 billion and growing at 18% per annum globally. Most companies are located in the Asia/Pacific region.
So, by 2050, the merger of environment and business will be well progressed; and not only will New Zealand be recognised as a leader in business-led environmental management, this will be an underpinning feature of our economy. Clean tech innovation will drive productive efficiency, deliver competitive advantages and open up new global export markets.
Here's what 2050 might look like for clean tech in NZ:
• NZX will have a thriving clean tech market category. All publicly listed businesses will have sustainability ratings, linked to transparent audited environmental accounts.
• Business will see environmental innovation as a source of competitive advantage and market leaders will make effective use of bio mimicry and bio utilisation as design templates to deliver better products and services.
• A national 'green bank' will have a portfolio of large-scale investments, supported by multiple private green investment funds. Retail bank commercial lending criteria will include a fulsome review of environmental performance.
• Government will have robust innovation policy in place to encourage the commercialisation of clean tech R&D. Rather than stifling business, environmental policy will be recognised as a tool to stimulate sustainable green growth. Multiple market instruments provide clear price signals to business and consumers to encourage the production of sustainable goods and services.
• Infrastructural assets will be reviewed against strict green performance criteria before being rolled out.
• Like humane treatment of animals and ethical worker conditions, environmental performance will be highly transparent and subject to intense consumer scrutiny.
• After stumbling initially, New Zealand will reclaim its place in the top three global environmental performers, largely on the back of advancements made in agricultural emissions reductions and a shift away from carbon intensive transport fuels.
• NZ's clean tech exports will be dominated by agricultural technologies, but there will be other strong clean tech industry players in nanotech, water and waste management, climate change adaption and bioenergy.
So what needs to be done now to ensure we don't miss the 2050 opportunity? Some great work is already underway by business, for example:
• The New Zealand Cleantech & Environment Network (nzcen.com) has been set up to aggregate New Zealand's top clean tech companies and look at ways to forge cross-industry relationships, better organise and fund the sector.
• Westpac recently announced $150m commitment to the New Zealand clean tech sector and will soon be rolling out a suite of new financial products designed to encourage revenue growth in green companies.
• Pure Advantage continues to support the development of healthy high-performance homes with Kiwibank. It also recently launched a new biodiversity workstream, and intends to roll out an investment banking partnership with a government research agency later this year.
• The Sustainable Business Council (SBC) has recently developed a wide range of environment-related programmes to better equip business for the future.
Government is also on the bandwagon. As recently as July 8, the New Zealand Ministry of Foreign Affairs was participating in discussions with the World Trade Organisation in Geneva to look at the removal of trade barriers for Environmental Goods & Services, in conjunction with free-trade negotiations.