Sustainability will offset higher input prices
What does the man who coined the term ‘cleantech’ more than a decade ago think about its promise today?
Nicholas Parker, executive chairman and co-founder of the Cleantech Group (San Francisco), and one of the first to invest in sustainable technologies, says cleantech might be the only way manufacturers can protect eroding profits.
“Consumer-facing industries spend between 25 and 40 percent net sales revenue on natural resource-based inputs. So if prices continue to rise on inputs such as oil, as they have historically…most consumer-facing companies will have no profit left in seven to 10 years.”
Some of the costs will be passed on to consumers; and savings might be found on labour, depending on the location of the plant. But those strategies can only go so far. In Parker’s view, the answer lies in cleantech.
“Cleantech is a multi-trillion dollar market. Why? Because it’s taking technology into existing industries and helping them become more efficient and leaner and cleaner, and more productive. So there’s an economic alignment. Price signals from raw supply and demand are going to drive change.”
The good news for manufacturers is the cost of clean technology is falling significantly, he adds. But companies should look beyond renewable energy.
“Media, innocently, is laser-focused on the very narrow areas of wind and solar and project finance but that’s just the thin edge of the wedge. This is why [cleantech] is both challenging and also exciting.”
While government initiatives such as Ontario’s feed-in-tariff (FIT) program are gaining attention, Parker stresses the need for a more dramatic shift away from traditional manufacturing and energy processes.
“FIT does nothing to ensure we’re an innovative economy. It does nothing to boost productivity. All it does is help decarbonize us, and potentially, decentralize the energy paradigm from big centralized plans to smaller [players].”
Parker is the opening keynote speaker at the upcoming Carbon Economy Summit on September 21 in Toronto. He’ll talk about the most promising opportunities in the low-carbon economy.
To view more speakers and to register, visit www.carboneconomysummit.com