Politics Home Article | We must back the clean industries of the future

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Climate change is an issue I feel very strongly about, prior to being elected I spent nearly a decade in renewable energy finance. While I am deeply alarmed by the potential devastating consequences of inaction; I am at my heart an optimist. I believe that with concerted effort we can avoid the worst ravages caused by global temperature increases. I also believe that British innovation can be at the forefront of tackling the threat. 

The UK is blessed with a thriving and vibrant clean technology sector that spans data, AI, greenhouse gas removal, solar, wind, heat, geothermal, tidal and many more areas. We have world-class universities spawning cutting-end spin-outs, a huge wealth of talent and genius, as well as expertise in manufacturing and engineering.

We should be the go-to place for other countries that want the next generation of climate technology

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We should be world-leaders in the industry of the future, and best in class in a range of subject areas. We should be the go-to place for other countries that want the next generation of climate technology, and the model they aspire to in their own domestic industries. 

Yet all is not well in the sector. In meeting after meeting UK businesses tell me they are struggling to attract funding at the startup stage, and finance for the scale-up phase is almost non-existent. Increasingly those companies are looking to become US or EU firms in order to grow. 

The issues are not the lack of capital in the market. Investors are sitting on more money than ever before. But speed of deployment and of achieving returns is faster in other markets. Money goes where it can make money fastest. And right now, the investment environment is more attractive in the US and Europe.

The problem is political. Time and again investors reference policy and regulatory uncertainty in the UK, the speed of government decision making, and the lack of support for vital sectors or particular technologies as reasons not to back British businesses.

Carbon removal companies and their investors are still awaiting the government’s response to its own Independent Review of Greenhouse Gas Removals report. The Net Zero Innovation Portfolio, which distributed £1.3bn in innovation grants and delivered £3 in follow-on funding for every £1 invested, was abolished at the last spending review. Its significantly smaller replacement, the CleanTech Innovation Challenge, is yet to award any money. The British Business Bank seemingly only backs businesses in this space that are already established and perfectly capable of raising private finance.

To rebuild investor confidence the government should start by speaking more about the potential for British CleanTech startups, follow up warm words with rapid action on regulatory frameworks and standards, and earmark easy-to-access funding streams for British businesses looking to start and scale in Britian. 

As Chair of the ClimateTech APPG I want to shine a light on these issues because it is not just important for the sector, but for the future of the UK. These are the businesses and industries of tomorrow. They have huge employment potential and will deliver significant returns for the Exchequer. Even for those not motivated by a desire to save the planet, that should be reason enough to support British climate technology.