Cleantech is a term used in the financial sector to describe clean technologies – that is, those technologies that are designed to improve environmental sustainability, limit negative impacts on the environment, and introduce environmentally friendly practices to the world in accessible ways.  

It is an umbrella term that can encompass many different industries and industry sectors, with focus on those technologies that reduce negative environmental impacts while improving efficiencies and increasing performance. Therefore, cleantech investing includes not only investment in renewables but also in any company that is making progress in terms of using technology to overcome sustainability challenges.  

Matthew Stone, US Cleantech’s CEO,  leads a company dedicated to developing clean technology applications to resolve environmental problems in commercially viable ways. Some of the top cleantech trends from 2019 are outlined in the infographic attachment. 

Demand for Cleantech Solutions 

Global demand for cleantech solutions has been rising rapidly in response to concerns over the effects of climate change and the decline in availability of fixed resources. With the population increasing rapidly, better solutions are required to maintain environmental balance. The cleantech sector has the potential to provide these solutions.  

The global cleantech market in 2014 was valued at US$601 billion. By 2025, it is expected that demand will have increased to the point where the industry is valued at around US$3 trillion. For investors, this represents huge potential for growth combined with the opportunity to source investments that have a positive impact.  

Mainstream investors have been interested in cleantech since the mid-2000s; today, the sector is essential for innovation and attracting more investment than ever before. 

The PDF attachment introduces four of the key areas of cleantech investment today. 

Cleantech Diversity 

Cleantech has a broad definition and as such spans multiple industries, generating a diverse portfolio of possibilities for investors. Energy production, storage, infrastructure and efficiency technologies all fall under the banner of cleantech, as might be expected. Other key industry segments in which cleantech is having an impact include transportation, water and wastewater, manufacturing and industrial, recycling and waste, air and environment, agriculture, and materials.   

Cleantech offers competitive returns for investors, solutions to global environmental challenges and value for customers. As a market driven by purchasing based on productivity, cleantech enjoys broader market economics with greater sustainability and a strong financial upside. 

Job Creation 

Another benefit of the rise in cleantech is job creation. New jobs are not limited to the development of technologies. Once new tech emerges many jobs are created, from manufacturers and solar panel installers to civil engineers and maintenance personnel.  

A report from Yahoo Finance found that jobs sectors such as solar panel installation and wind turbine maintenance are fast growing areas of employment, with some offering wages significantly higher than the national average. 

Return on Investment 

In line with many industries, cleantech suffered during the aftermath of the 2008 global recession. Investment in the sector, which had previously been at an all-time high, dropped alarmingly and it seemed for several years that investors were no longer viewing cleantech as a safe bet.  

However, returns on investment in many areas of cleantech are now on the rise and more investors are flocking back. The energy storage and smart grid sectors have shown significantly good rates of return on investment over the past couple of decades, with energy optimisation, renewable energy development, and waste treatments offering reasonable returns. 

Some of the best and worst growth areas for energy investment over the past few years are shown in the embedded short video.