Saturday, September 23, 2023

Green Technology: Why Should You Invest?

By Sanjay Banerjee--The author is passionate about how businesses can benefit from technology. He is a tech enthusiast and a senior business leader at EFY.

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So, green tech products should involve less wastage during production, less dependence on fossil fuels, and reusability of existing infrastructure to include the latest technological advances. Some of the major product categories to invest in are energy generation, green chemicals, sustainable or recyclable products, and alternate energy producing technologies like solar panels and thermal heating discs.

Apart from solar cells, other products/equipment worth investing in are rainwater harvesting systems (which are mechanical in nature and extremely inexpensive to set up), heating and insulation facilities, wind generation facilities, etc.

Challenges to green tech adoption

The primary challenge that organisations and corporations face in the adoption of green tech is that the initial investment is very high and, in most cases, the overall technology implementation cost is much higher than the technology it replaces. The real deterrent in this case is the cost of R&D, as green technology is in its nascent stages. The other barriers or challenges are regulatory in nature — there is no set framework in terms of implementation nor is there a policy push from the states’ end. So, for an investor this is the right time not only to enter the segment but also influence policy formulation within the country and globally. The positives include the development of a talent pool for this new sector, which with time can take care of most of the key issues, as people make processes, and processes, in turn, make frameworks and institutions.

Planning parameters in the green technology sector

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The most important factor investors are interested in is consumer demand for green tech products, and this is growing. Governments are increasingly mandating the purchase of green products. Support infrastructure is being created by leading technology institutions funded on the public-private partnership models, and developing the right opportunities for incubation and research. There are new rules in place to limit the use of hazardous substances, to use minimal energy, etc. Ratings that reflect energy consumption levels and end-of-life recycling are now the norm. Such regulatory support makes it easier for investors to evaluate the long-term ecological and financial viability of projects.

However, investors looking at taking the plunge must carry out an internal and external analysis and audit before putting money in the sector. It’s not only about finding the most lucrative segment(s) — investors must also look at their personal and environmental goals, too. The way forward lies in having a diverse green tech investment portfolio. One common trap investors have fallen into is Green Washing, whereby organisations claim to be creating green products or services, but in fact may not be adhering to green norms of manufacturing. Therefore, considerable research is the first step in understanding the green tech nomenclature, its application areas and green product requirements.

Those investing in the green technology space face a dichotomous situation — they would need to make profits and, at the same time, make the world a better place to live in! Most major corporations across the world use up vast resources but, in turn, are not able to give back in the same measure. It’s a Catch 22 situation, but to me it looks like a mindset issue.
I would like to leave you with the thought that if we do not take the plunge in investing in green tech soon, we may have to return to the horse-drawn carriage as fossil resources are dwindling fast.

To post your comments or have a conversation with me, feel free to mail me at [email protected].

Reference: UNEP – Frankfurt School Study.


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