CNBC Business | CLEANING UP THE BIG SMOKE

CLEANING UP THE BIG SMOKE

London is becoming the top market for those looking to invest in the growing environmental and clean-tech sector. Mike Scott reports

Five years ago, if you wanted to make money by reducing carbon emissions, you were seen as some kind of tree-hugging weirdo. Three years ago, you were probably an academic looking for funding to commercialise your research but having to spend most of your time explaining to bankers what climate change was.

Now, you can take your idea to the heart of the City of London – the London Stock Exchange (LSE) – and have investors queuing up to talk to you. At a recent Environmental Industries Capital Markets day at the LSE, organised by Carbon International, a PR and investor relations consultancy focused on environmental markets (and there’s another sign of the times – that such a company exists), eight companies gave presentations to about 80 potential investors and industry analysts.

They ranged from Novera, a renewable energy generator already providing 131 MW of electricity from landfill gas, hydro-electric power and wind, to Eneco, which has a new semiconductor technology that directly converts heat into electricity but is still at prototype stage. As ever (this is the sixth event Carbon International has organised at the LSE), there were a number of overseas companies – as well as US-based Eneco, there was Metal-Tech, an Israel-based company that recycles mining and metals waste, and QuestAir, a Canadian gas purification firm. Also in attendance were two Italian groups – Acta, which makes catalysts for fuel cells, and Actelios, a waste-to-energy company. The AIM market has managed to attract many foreign clean-tech businesses.

Bruce Jenkyn-Jones, director of investments at Impax, an environmental asset manager and sponsor of the event, says investor education has come a long way since the first capital markets day in 2005. “When we did the first of these events, there were a lot of slides on the science of climate change and the Kyoto Protocol,” he says. “Now carbon management is accepted as a legitimate area of investment.”

Indeed, Peter Greensmith of Libra Natural Resources, an investor in renewable energy producers, was able to say at the beginning of his presentation: “I don’t need to educate this audience about Kyoto.”

At earlier events there were more wind and solar firms, but many companies in these sectors have now moved on to bigger fundraising pastures – Theolia, a French wind project developer, for example, has just taken over the wind assets of GE Energy Financial Services in exchange for the latter taking a stake of up to 22%. “Previous companies have gone on to be very successful, but there are always new ideas,” explains Jenkyn-Jones. “This event offers companies that might otherwise struggle to get market exposure the chance to set out their stall in front of 80 or so mainstream investors.”

For the LSE, such days are an opportunity to highlight the advantages of listing on Aim to a fast-growing sector. “It is obvious that the London market is the biggest arena for environmental and clean-tech companies looking to raise money,” says Frank Ford, who runs the events for the LSE. “London investors just ‘get it’ when it comes to this sector.”