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Why Emerging Markets?
Population growth, increasing urbanization and industrialization in emerging economies are leading to an increase in green-house gas (GHG) emissions and are having an increasingly negative impact on climate change.
According to the International Bank for Reconstruction and Development (IBRD or World Bank) and the Inter-governmental Panel on Climate Change (IPCC), the effects of climate change are expected to physically impact emerging market countries to a greater extent than developed market countries [1]. This is driving a change in attitudes with respect to climate change mitigation across emerging market countries and is catalysing legislative changes and precipitating publicly-funded programs that promote green technologies. [2]
Why green technologies?
Green technologies are new technologies and related business models that seek to greatly reduce or eliminate existing activities that have a negative impact on climate change or that improve the productive and responsible use of natural resources.
Some key reasons why greenTEK believes that investments in green technologies are expected to generate superior financial returns:
- Social and environmental costs are becoming an increasingly important factor in cost benefit analyses and investment decision-making leading to the emergence of green equity as a viable asset class
- Many countries are imposing increasingly strict environmental targets on companies and consumers, creating a vibrant market for green technologies
- An increasing emphasis on corporate social responsibility by Investors,and growing consumer demand are creating green investment opportunities
- Corporate competitive pressures: many established companies need to be seen as being “green” and are driving the adoption of green technologies
- Cost-saving measures are improving efficiency and reducing waste: a virtuous circle is being created as prices for green technology are themselves falling which, in turn, increases the viability of additional cost-saving measures
Why small and medium sized businesses?
Small and medium sized businesses are proven drivers of economic growth and job creation which, in turn, reduce poverty levels, and particularly so in emerging markets.
greenTEK will be investing in such businesses, driving change from the ‘bottom up’, focusing on high-growth opportunities and providing ‘hands-on’ management support in addition to funding.
Why equity financing?
When it comes to wealth creation and precipitating the spill-over benefits, such as exports and the creation of high skilled jobs, equity financed businesses have consistently performed well.
