Cleantech is a growth sector with impeccable potential – offering strong returns on investment, products and processes benefiting the environment, and a boost to New Zealand’s net-zero commitment. We look at how public and private innovators, investors and other stakeholders are collaborating to create a vibrant cleantech ecosystem.
According to Dealroom.com, venture capital investment in cleantech and other climate technology increased by 24 times over the past decade, with US$50 billion raised in 2022 alone. As a burgeoning hub for climate tech and cleantech innovation, Tāmaki Makaurau Auckland is well poised to connect public and private investment and build momentum through this collective approach.
With funding on the rise, and investment avenues linking with government agencies such as Callaghan Innovation and New Zealand Trade and Enterprise (NZTE), the local sector can better develop solutions here and export them to the world. Phil Anderson, cleantech Business Innovation Advisor, observes, “The New Zealand government’s strategic direction for sustainability and emissions reduction has helped with the establishment of new funds for cleantech. Recent visits by cohorts to key investment hubs like Singapore have also provided New Zealand cleantech innovators with opportunities for exposure and experience. There is increasing optimism from offshore about investing in Kiwi cleantech, which is seen by many as a growing opportunity.”
Strengths and opportunities
Data from Callaghan Innovation shows that the number of cleantech businesses in Aotearoa New Zealand nearly doubled (to 86) over the six years leading to 2021. During 2020, Callaghan Innovation worked with about 300 cleantech startups. Over that same period, approximately 100 of those innovators generated NZ$330 million in revenue, supporting almost 2000 jobs and investing NZ$95 million into startup R&D.
In 2021, Callaghan Innovation also commissioned the NZ Climate Tech for the World report, which identified strengths and opportunities for New Zealand’s cleantech innovation ecosystem, while benchmarking it against others from comparably sized small advanced economies (SAEs).
Callaghan Innovation and partners have now formed the NZ Cleantech Mission. This aims to boost a wide range of cleantech, greentech and climate technology businesses that are creating products to help solve climate change and reduce greenhouse gas emissions and environmental damage due to pollution.
Tātaki Auckland Unlimited (TAU), the city’s economic and cultural development agency, is one of the Mission’s partners, along with New Zealand Growth Capital Partners, Science for Technological Innovation National Science Challenge, Auckland UniServices, Ara Ake, MacDiarmid Institute and KiwiNet.
NZ Cleantech Mission objectives include developing a five-year roadmap, supercharging local and international connections, and scoping initiatives to boost commercialisation and, ultimately, a targeted approach to cleantech clusters. The partnership is also helping to nurture a collaborative ecosystem for cleantech innovators, investors and government, and to seize on the opportunities that these expanding sectors offer.
Broad and experienced field of investment
Investment and expertise are keeping pace with the growth of the cleantech sector. Key private and public investment funds include Climate Venture Capital Fund, Icehouse Sustainable Technology Fund, ACC Climate Change Impact Investment Fund, Impact Enterprise Fund, Te Tahua Pūtea mō te Kirihou Auaha, Low Emission Transport Fund (LETF), Decarbonising Industry (GIDI) Fund and NZ Green Investment Finance. These funds bring together capital, capabilities and connections to accelerate the international commercial traction of New Zealand cleantech’s scale-ready solutions.
The depth of perspective and experience of Auckland cleantech investment management will also appeal to offshore investors and other partners. James Muir at ACC Private Capital leads the ACC Climate Change Impact Fund, which supports a national transition to a low-carbon economy. With an executive background in private-sector clean energy across Europe, Asia and Australasia, as well as advisory support to cleantech startups in New Zealand, Muir also worked for a period at Callaghan Innovation, where he led its cleantech strategy. He has a passionate yet well-rounded perspective on the challenges of cleantech investing: “We have to set and manage realistic expectations.”
Unique in the world, ACC is a publicly owned accident insurer with impact funds in health, safety and well-being as well as climate change. Through these, ACC seeks to improve social or environmental impacts while providing a strong investment return to help New Zealanders pay less in levies for accident cover. Investments seeking to address opportunities at global scale include alt-protein innovator Leaft Foods and solar farm leader Lodestone Energy.
Underlining New Zealand’s ambitious goals, Muir notes, “New Zealand’s Nationally Determined Contribution commits us to a 50 per cent reduction of net emissions below our 2005 gross level by 2030. That’s fast approaching and requires us to adopt a sense of urgency that we have not historically demonstrated.” Further, “The government’s Climate Change Response Act sets net-zero emissions of all greenhouse gases (other than biogenic methane) by 2050. We are committed to supporting scalable innovation to help meet these goals while ensuring the health and well-being of New Zealanders.”
Robbie Paul, CEO of Auckland-based Icehouse Ventures with over NZ$600 million assets under management, including the Sustainable Tech Fund, notes that the New Zealand cleantech ecosystem is now self-sustaining. “Multiple serial entrepreneurs are sharing their expertise and investment into next-generation companies. Several, such as Avertena and Mint Innovation, share a common provenance from LanzaTech. And there is a tidal wave of capital going to New Zealand impact investing.” Paul also points to the synergies contributed by commercialisation of university research (Auckland UniServices, KiwiNet) and the assistance of government investment agencies (Tātaki Auckland Unlimited, NZTE).
Meeting global challenges
Paul also says cleantech and other impact investment strategies in New Zealand are well-aligned with those in North America, Europe and Asia. “At IV, we look for mission-led companies that are solving big problems and providing returns beyond financial capital, leading to positive compound benefits. Sustainability and profitability are not mutually exclusive.” As an example of compound impact, Paul points to Nilo, a company whose proprietary process converts plastic waste into a water-based resin used in non-toxic binders and adhesives. These products replace toxic, even carcinogenic, binders such as formaldehydes.
IV’s co-investors in Nilo are family offices from New Zealand (K1W1 and Spencer Family Group), Asia and Europe. “As is the case in global markets, New Zealand can no longer export our waste problems. Offshore investors are increasingly calling New Zealand a second home to pursue their impact visions. They want to do well and do good. And the best way to achieve that is to invest in New Zealand companies solving big problems.”
A wealth of experienced support
Tāmaki Makaurau Auckland is also helping to lead the cleantech sector. Launched in 2022 by Tātaki Auckland Unlimited, the city’s economic and cultural development agency, Climate Connect Aotearoa is a hub for collaborative climate innovation. It brings together business, government, Māori, academia, funders, investors and climate innovators to enable Auckland and New Zealand to reduce emissions, meet global commitments, and adapt and thrive in the face of climate change.
Its interactive Climate Innovation Ecosystem Map aims to “join the dots” across New Zealand’s climate innovation ecosystem, helping people to quickly build networks, ensure representation across various sectors and put appropriate support into place.
Another Climate Connect Aotearoa resource is the Knowledge Map. It includes explainer videos, guidelines for reporting, tools for measuring emissions, resources to support engagement with Māori, advice on advancing a circular and regenerative economy, and more.
International conferences, too, play a role in Auckland’s cleantech ecosystem. Contributing world-class science and its own commercialisation of cleantech and other university R&D, Auckland UniServices hosts the annual Blue and Green Technology Conference. Held in Auckland in conjunction with the US Department of State, the conference brings together academics, entrepreneurs and policymakers to look at how the uptake of blue (oceans and other water systems) and green technologies can better prepare Pacific nations for future global challenges. The conference covers topics including renewable energy, waste management and sustainable agriculture, and it provides a forum for networking and collaboration.
Championing the triple-bottom line approach, Ngā Ara Whetū (“Pathway to the Stars”) is a social enterprise affiliated with Waipapa Taumata Rau the University of Auckland. The programme works with a variety of partners to develop programmes and initiatives that promote sustainability, social equity and economic development. By supporting Māori students pursuing careers in science, technology, engineering and mathematics fields, Ngā Ara Whetū helps empower people to act on environmental and social issues across different sectors, including energy, transport, waste and food, all of which makes Auckland a more sustainable and inclusive community.
Auckland’s cleantech ecosystem is a growing and forward-thinking community that welcomes international partners. With a strong focus on sustainability through elimination of carbon emissions, waste recycling/repurposing and renewable energy, as well as applying Māori expertise, commercial nous and investment resources, the ecosystem is committed to mitigating the effects of climate change.
Find out more
To learn more about investment opportunities in cleantech in Tāmaki Makaurau Auckland, contact our investment team.
DISCLAIMER: This article provides general information on potential investment opportunities in Auckland and is not intended to be used as a substitute for financial advice. The views and opinions expressed are those of the relevant author, and do not necessarily reflect the views of Tātaki Auckland Unlimited. Tātaki Auckland Unlimited disclaims all liability in connection with any action that may be taken in reliance of this article, and for any error, deficiency, flaw or omission contained in it.