On 18 September 2024, the Impact Investing Network (IIN) hosted the Connecting Capital with Climate Solutions symposium, drawing in a dynamic group of investors, iwi representatives, trusts, and foundations. Partnering with peak bodies, sector parnters and the impact investing sector, this event was a gathering point for those committed to turning climate ambitions into real-world impact.
The Why
The symposium was about one crucial goal: bridging the gap between capital and climate solutions that drive lasting change. With the urgency of climate action ever-increasing, this event offered a space for attendees to learn from experts already shaping the field. Through a day packed with keynotes, panels, and case studies, participants explored a broad spectrum of strategies, from cutting-edge innovations to nature-based solutions - all with the aim of enabling more investment into climate solutions.
By exchanging knowledge and practical tools, the symposium aimed to inspire attendees to weave climate-focused strategies into their own investment portfolios, reinforcing the collective path toward a greener, more resilient future.
Session Highlights
For an in-depth look at each session, dive into our blog series covering the each session's highlights. In this blog, we will explore key insights from Dr Jim Salinger’s keynote address and the panel discussion on Investing in Climate Innovation. To learn about the Investing in Climate Infrastructure Panel and Investing in Nature-based Climate Solutions Panel, follow the link at the end of this blog.
Keynote Address: Dr Jim Salinger
A scientific perspective on the global climate system and its current state.
About Dr Jim Salinger:
Dr Salinger is a renowned climate scientist, one of the foundational leaders in this field, and has been extensively involved in international climate collaboration.
His research is focussed on climate trends and extremes like heatwaves and droughts, as well as their measured impacts, for example in terms of ice volumes.
He is credited with being the first to identify climate warming in New Zealand and its surrounding oceans in the 1970s.
He won the prestigious NZ Science and Technology Medal in 1994.
He is a former leader author for the Intergovernmental Panel on Climate Change, which won the Nobel Peace Prize in 2007.
He has held Visiting Professorships at the University of Florence and Stanford.
His work has been featured in over 190 publications and counting.
In March 2024, Dr Salinger was named the Kiwibank New Zealander of the Year.
“We all need to get busy on this journey. The more people do, the greater the impact.” Dr Jim Salinger.
Highlights/key themes:
Rapid change in Earth’s atmosphere: Carbon dioxide levels for the past 800,000 years, from glacial to interglacial periods varied only between 180 and 280 parts per million until 1850. Since then, atmospheric carbon dioxide has increased rapidly to over 420 parts per million. Dr Salinger used the analogy of adding more blankets to a bed to explain the warming effect of carbon dioxide and other greenhouse gases.
Pressing need for climate action: As numerous studies and thousands of scientists have identified, Earth’s climate is now rapidly changing, and humanity is the cause of these changes.
Methane is cause for greatest concern: The most alarming greenhouse gas is methane. Atmospheric methane levels are now 2.6 times higher than pre-industrial levels, and again, human activities are the leading cause. Methane alone accounts for 0.5 degrees of global warming. Therefore, methane reduction is the single most effective strategy to reduce global warming, right now.
Direct implications for New Zealand increasingly evident: 2023 was the warmest year in New Zealand's recorded history. Both globally and in NZ, temperatures have now increased by over 1.3 degrees compared with long-term averages. This is having significant impacts on glaciers and coral reefs. Half of the Southern Alps glaciers have been lost in the last 75 years, and Dr Salinger noted that 80% of Coral Sea reefs are now bleached.
New Zealand’s opportunities: For a small country New Zealand has particularly large opportunities from a marine perspective. Just 1/15th of New Zealand’s territory is land and the rest (inclusive of its Exclusive Economic Zone) is ocean.
Energy transition well underway: Investments in energy transition have surged. According to Bloomberg, renewable energy and other energy transition investments tripled from 2019 to 2023, to reach US$1.79 trillion.
More capital and more action needed: However, much more is needed, and urgently, to stave off the worst impacts of climate change. For example, a further NZ$34 billion is needed just in New Zealand by 2035 to meet climate targets. Current Government policies and countries’ Nationally Determined Contributions will not prevent warming in excess of 2 degrees.
Big change in investor awareness, interest and attitude: Dr Salinger observed a material increase in the level of awareness from investors of the risks of climate change, as well as the opportunities to invest in energy transition and climate-positive solutions.
All of us, including investors, can and should do more: Dr Salinger called for urgent action and responsible investment in climate solutions, emphasising the importance of individual and collective efforts. There are lots of ways to contribute, including:
Taking small personal steps to reduce our own emissions footprint (e.g. conserving energy);
Investing in positive climate solutions which will help build momentum for emissions reduction, and will encourage a future whole-of-government approach;
Supporting investee companies to act in keeping with a responsible investment approach, for example through due diligence prior to investment, and company engagement post-investment;
Promoting regenerative agriculture, energy transition and other climate-friendly solutions amongst our various networks and stakeholders;
Using voting both in democratic elections and to engage with the companies we invest in.
Investing in Climate Innovation Panel
The panel discussed the challenges and opportunities investing in and raising capital for (non-nature-based) climate innovation - across the commercial maturity spectrum – in New Zealand and elsewhere.
"Equity capital is essential to stitch together comprehensive climate responses globally." Rohan MacMahon, Climate Venture Capital Fund
Highlights/key themes:
Globally, investment in clean tech has tailed off since recent highs although climate tech is proving relatively more resilient. In New Zealand, scale and maturity of local capital markets as well as distance from international capital markets are added challenges for climate innovators seeking to raise investment capital.
New Zealand is great at innovation but not at scaling and commercialising innovation. The panel noted the potential for New Zealand to address hard-to-abate emissions categories and help solve global challenges. According to recent research, the New Zealand climate tech sector is poised for rapid growth with indicative capital raise ambitions of around $440m for the year to March 2025. Yet founders such as Bspkl report challenges raising (especially) early-stage growth capital in and from New Zealand, compounded by a lack of government support and strategic direction compared to overseas markets plus a funding bias towards agriculture.
In particular, we need to bridge the gap in capital supply for Series A and beyond – enabling local climate innovators to stay in New Zealand longer. In many cases, they will eventually need to go offshore to scale up as we lack sufficient depth of funding pools in New Zealand currently. But many are forced to move overseas prematurely or may fail to reach their full potential, with loss of broader benefits to New Zealand also. Panelists pointed to a disconnect between the risk appetite of local institutional investors and the risk profile of early growth stage climate tech companies.
In tandem, we could seek to position New Zealand as a great place to test and pilot global innovation before scaling it up globally.
Critical to this is more equity investors with sympathetic values and long-term horizons. Equity investors play an important role in supporting the growth of early-stage climate tech companies especially while access to and ability to service debt capital is limited. Strategic investors and patient growth capital can also help attract other local and international investors.
Also, greater connection and collaboration across the entire climate innovation ecosystem.
Community Trusts and KiwiSaver providers have the potential to play a more active role in supporting (local and global) climate innovation – alongside NZGIF and the CFIs. This could be from a values-led or investment opportunity perspective depending upon fund-specific investment mandates and subject to constraints for daily liquid funds. Panelists encouraged leadership in the industry – and courage with Boards and Investment Committees - to drive change and give others the confidence to invest. Also keeping it simple to start with (e.g. not the lead investor on deals) and considering indigenous perspectives and frameworks.
Access to structured products and platforms from trusted providers would give them more confidence to invest. There are a few examples of big overseas players (such as Pollination) starting to come to New Zealand alongside local pioneers (e.g. Climate Venture Capital Fund), offering a curated pipeline of deals and co-investment options too. We need more of this kind of product, more money going into it and more proactive engagement between climate fund managers and investors on investablity.
Often overlooked, corporate VC is emerging as a key part of the ecosystem for financing climate innovation. Globally and in New Zealand, corporates are co-investing in the solutions needed for their own business transition and strategic advantage. Corporate VC offers the high-risk appetite type of capital that innovators need. However, panelists noted that in some cases corporates may seek to influence the direction of the business in their own interests.
We can’t expect it all to be funded in New Zealand. Attracting aligned international capital with strategic use of local capital will be important. Facilitate connections between local climate innovators with international investors and corporations. Engage with global fund managers to inform them about companies in New Zealand that could be part of their climate-themed allocations.
To explore more highlights from the event, including insights from our panel discussions on infrastructure and nature-based solutions, head to part 2 of the blog series below.
Acknowledgements
We extend our heartfelt thanks to all speakers for sharing their expertise and insights on connecting capital with climate solutions. We would also like to acknowledge the following hosts, organisers, and contributors for their invaluable support in making this event a success:
BayTrust
Climate Venture Capital Fund
KPMG
Responsible Investment Association Australasia (RIAA)
Centre for Sustainable Finance, Toitu Tahua
Philanthropy New Zealand (PNZ), Tōpūtanga Tuku Aroha o Aotearoa
Principles for Responsible Investment
Event summary contributors:
Justine Sefton, Impact Investing Network
Rohan MacMahon - Partner, Climate Venture Capital Fund
Carolyn Brooke, PNZ
Matthew Jackson, Alimentary Systems
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