COP26 is dominating the headlines and most of us are aware in a general sense about its environmental aims and ambitions. However, what is less emphasised is the strategy to “unleash trillions in private and public sector finance required to secure global net zero”. Simply put, COP26 is not going to work unless investors do their part. And COP26 has to work because although the previous meeting in Paris 2015 led to ground-breaking targets, these have been missed and the World has to do more if it is going to reach “net zero” by 2050 and so keep the climate change below the critical 1.5 degrees.
Governments need to put frameworks in place to facilitate this capital coming in. It feels good to be able to write that the UK is doing well at this. Our fund benefits from the EIS initiative which has led to £22 billion being invested in early-stage companies. The government has established the UK Infrastructure Bank to help support green projects and the British Business Bank provides similar backing. Can more be done? Yes, always but we are leading the way. In fact, London is number 3 in the World as a hub for investment into tech solutions that address one or more of the 17 UN Sustainable Development Goals. There are now a number of “impact unicorns” i.e. businesses valued over $1Bn that have a positive impact (climate change being a major impact sector). Examples of these: Octopus Energy (green energy), Arrival (zero-emission buses and trucks), BritishVolt (responsibly-sourced batteries), Babylon Health (AI health tech, not climate-focused but still impactful in transforming healthcare) and many more in-waiting. The UK has developed a solid framework to help innovating green entrepreneurs access capital.
Some of you have invested with us in Echion Technologies, Cambridge University spin-out that has developed next-generation materials for batteries to make them last longer and hold more power. They only use low cost, abundant and environmentally friendly chemical compounds. They have recently signed their first OEM collaboration with Vantage Power for battery technology for its hybrid bus and commercial vehicle electrification systems.
Impact investing will be at the forefront of developing technical solutions to the huge issues highlighted by COP26 and the team at Boundary are very excited about the opportunities that we are seeing ahead of the current raise which will close on the 28th March 2022.