Shared challenges always inspire innovation. We’ve seen it with covid vaccine production, vehicle safety standards, communications tech and, more than ever, we’re seeing innovation in response to a changing climate. As the world grapples with the web of climate challenges, innovators are constantly responding with new technologies. Platforms like VentureCrowd are an important part of this journey, letting investors find and fund this forward-thinking altruism. Let’s take a closer look at climate investment, some prominent growth industries, and the importance of investing in change.
There are two key, interlinked issues when it comes to climate investment: climate itself, and population growth. “When we look at the causes of climate change — pollution, overfishing, deforestation, the use of fossil fuel — if you zoom back out to what’s causing them, the population is pushing us into unsustainable ways of living,” says Steve Maarbani, director and CEO of VentureCrowd. “But we haven’t addressed those fundamental issues.”
Addressing these issues through capital is often called ‘impact investing’, and it’s distinct from a purely profit-focused investment. For those on the cutting edge like Maarbani, investment is a key way to facilitate planet-focused innovation. “If you truly want to solve complex global problems, you need an innovation sector which is thriving,” Maarbani says. “You need founders and scientists and creators to conceive concepts which can be funded by the public markets. They won’t be funded by the government — the government’s job is not to pick winners.”
The rate of innovation is quickening all the time, and it means there’s a hugely diverse marketplace of ideas in which to invest. It can seem a little impenetrable, but it helps to have some strong criteria, as VentureCrowd does. “The first place we start is: does the company address one or more of the United Nations Sustainability goals?” says Maarbani. From there, the industries and avenues of innovation are limitless.
One area Maarbani is excited by is agricultural technology, or agtech. Traditional models of agriculture rely on a predictable pattern of weather, seasons, pollination and so on. With climate change, these patterns can shift, making our current systems less effective. Innovators are reshaping traditional agriculture, and one investment that thrills Maarbani is in a field called ‘vertical farming’. “It’s farming in vertical layers in a controlled environment which uses hi-tech sensors to regulate light, temperature, humidity and nutrition so that you can grow crops all year round from anywhere,” Maarbani says. This style of farming uses less water, is independent of the weather and, vitally, is showing signs of significantly increased crop yields.
The interlinked challenges of climate change and population growth means that there’s innovation potential in other areas too, like biotech — including new drugs and therapies for an ageing population — digital healthtech, renewable energy technologies and innovative food tech. “We’re seeing companies like Wave Swell that’s working on energy coming from waves, the guys at Nexba who are removing sugar from food, InvertiGro who are doing amazing things with vertical farming, and Patriot Hydrogen with their waste-to-clean-power initiatives — there’s some really extraordinary companies doing wonderful work,” says Maarbani.
Part of the importance of impact investing is that it opens up opportunities for all people to contribute to climate solutions in ways that have previously been limited by exclusive capital markets. Particularly, the trend is representing a powerful shift in both wealth and the philosophies that guide investment. “We’re currently undergoing the largest intergenerational transfer of wealth in history, from baby boomers through millennials and Gen Z,” Maarbani says. “This group of people are now becoming the beneficiaries of trillions of dollars of global assets and the way they want to invest those assets is very different to the way mum and dad used to and definitely different to the way their grandparents used to.”
As the markets open up to support these new patterns of wealth and investment opportunities, Maarbani encourages potential investors to ask themselves some questions. “What legacy do you want to leave? What contribution do you want to have made? For me, personally, and for everybody in our team, we want to know that we backed innovation that made a positive difference to the way the world operates.”
VentureCrowd is a leading wealthtech platform democratising access to alternative assets. With over 70,000 registered members, VentureCrowd is Australia’s only multi-asset class platform enabling retail, wholesale and institutional investors to co-invest in the same property, venture capital, fixed income and managed fund opportunities on the same economic terms.
