News
Mar 02, 2010Agent Of Change
CanGEA Member Ram Power Corp. is mentioned in the Financial Post article “Agent of Change”. When Ram Power was listed on the Toronto Stock Exchange in October it increased the total number of cleantech firms trading on Canada’s two main exchanges to 123, the most on any exchange worldwide.
From the Financial Post Magazine
David Pett, Financial Post Magazine
Ram Power Corp. wasn’t the only one celebrating after the Nevada-based geothermal power company listed on the Toronto Stock Exchange in October. The listing pushed the amount of equity financing for clean technology companies listed on the TSX and TSX venture exchange above $1 billion for the year. It also meant the total number of cleantech firms trading on Canada’s two main exchanges hit 123—the most on any exchange worldwide—with a market cap of around $12.5 billion.
For Nick Parker, the occasion was worth applauding but it must have been at least a little bittersweet. As the Toronto-based cofounder and executive chairman of Cleantech Group LLC, what he calls a “de facto industry association,” Parker would be pleased that such a milestone occurred in Canada. But he also thinks much more could be done in this country. Parker ought to know. He helped coin the term “cleantech” and is widely credited as one of the driving forces behind the push for sustainable technologies in Canada and around the world. Indeed, he must be doing something right. All told, Cleantech Group boasts more than 8,000 investors, 6,000 companies and 3,500 professional services organizations as members, representing more than $3 trillion in assets.
Most importantly, Parker’s group has changed the way the business community views cleantech by arguing that it makes good economic sense, not just good environmental sense, says Rick Whittaker, chief financial officer and vice-president of investment at Sustainable Development Technology Canada, a not-for-profit foundation that finances and support green technologies. “Normally, there is a conflict there, but Nick has stuck himself in the middle and said this is good for both sides,” says Whittaker.
A venture capitalist and a “light green” environmentalist for most of his life, Parker founded the Cleantech Group in 2002 with Keith Raab. It now has offices in Silicon Valley, Beijing, New Delhi, London and Ann Arbor, Mich., as well as Toronto. But back then, enviro-friendly technologies were often dismissed as “end-of-pipe” add-ons, such as smokestack scrubbers, that ate into margins and were largely implemented to meet government regulations or satisfy critics.
“They really didn’t jazz most investors and it wasn’t getting the attention of Silicon Valley or Wall Street,” Parker says. “We wanted to develop a whole new way of seeing technology and technological solutions that would help us do a lot more with a lot less, be more productive with resources, particularly with energy, and add economic value at the same time.”
To that end, Cleantech Group helped educate investors that clean technology was about more than developing wind, solar and geothermal energy: It also included energy storage such as fuel cells, energy efficient lighting and building materials, and recycling and waste-management technologies. The firm’s second objective—which Parker calls cleantech 2.0—was more concrete: building entrepreneurship levels, and attracting venture capital and other financiers to help get the technology out of the lab and into production.
Clean technology is now the largest venture-capital sector in the U.S., representing 27% of such funding, and Cleantech Group has been at the forefront of the industry’s growth by giving its members access to capital, investors, research and promotional opportunities, mainly through its global forums that have attracted influential speakers such as Hillary Clinton and Robert Bernard, Microsoft’s chief sustainability officer. Over the past seven years, companies have raised about US$1.6 billion at Cleantech Group events .
The firm also advises governments and large corporations, including A-list clients like Wal-Mart Stores Inc., software vendor Autodesk Inc. and France-based Veolia SE, one of the world’s biggest water managers.
But Parker is far from satisfied. He’s now onto cleantech 3.0, which is convincing business customers to adopt clean technologies. He also believes clean technology as an investment is nowhere near its full potential. In particular, he warns Canada is in danger of being left behind as more countries become committed to cleantech initiatives to secure jobs and the wealth creation that comes with it. “We are looking at the reformation of virtually everything we do, whether it’s designing a piece of furniture or designing an urban transit system,” says Parker. “This is a multi-trillion-dollar opportunity. This is the big time, but we haven’t fully grasped that here in Canada.”
Cleantech investment by the federal government pales in comparison to that of major Asian and European countries, as well as the United States. Canada earmarked just 8% of its economic stimulus spending for clean technology, compared with nearly 80% by South Korea and 34% by China. Even the U.S. allocated 11.5%. “We are not in the arena, let alone the game on the federal level,” Parker says. “There’s potential, but why are we bailing out ‘Government Motors’ when we could be partnering with next-generation Asian car manufacturers who want to make stuff happen here?”
Meanwhile, the TSX, despite its leadership position, is being chased by other major world exchanges such as the NASDAQ or NYSE that are actively soliciting companies looking for financing in China—the country Parker says will become the “Wal-Mart of cleantech.”
“The sheer size of this opportunity has not dawned on us here in Canada, because we don’t have recognizable political, corporate or financial leaders,” Parker says. “Where is the equivalent of Jeff Immelt from GE, or Lee Scott at Wal-Mart? We tend to talk the language of corporate social responsibility and environmental risk management, but that’s yesterday’s agenda. The rest of the world has moved beyond that.”
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