Cleantech sector poised to be industry's third biggest by 2020
Clean technology, aka cleantech, refers to products or services that deliver financial returns through efficiencies in energy, waste and resources, while reducing environmental impacts as an added benefit.
Just as information technology (IT) transformed industry over the past two decades, cleantech is quietly disrupting your industry. Early adopters use cleantech to change their cost structures, lock in relationships with customers and suppliers, and innovate their way into new revenue streams their competitors never thought possible.
Cleantech is the new frontier for immediate and long-term competitive advantage, and it’s moving in your direction. It offers substantial savings and benefits, as evidenced by these real-world examples:
• A BC Winery avoided $50,000 in capital costs by reducing its organic loading and water use and implementing an alternative wastewater treatment and air treatment biofilter.
• A rubber and plastics manufacturer saved $7,000 a year by replacing conventional lighting with new efficient lighting technology. Another $50,000 a year is recoverable by grinding and reusing its urethane scrap.
• BMW is building four wind turbines to power a Leipzig factory to reduce exposure to rising energy costs. Closer to home, a BMW dealership in Canada installed solar panels, geo-thermal heating/ cooling technology and rooftop gardens, followed by its own wind turbine—all part of a plan to get off the grid.
Lean and disruptive
During the 1980s and 1990s, environmental technologies addressed the ecological problems of industrial and urban development. End-of-pipe solutions were developed to minimize ‘pollution’ — air, water, and waste, and were a pure cost for industry and communities. No one was talking about return on investment back then because these changes were made to meet regulation and avoid fines—a stay out of jail strategy, if you will.
In contrast, cleantech finds the more efficient route to power generation, energy use and distribution, and consumption of water and materials. It also improves industrial processes. By examining the conventional way of doing things through an environmental sustainability lens, innovation occurs.
One perception in manufacturing is cleantech is still in its infancy, so you have lots of time to think about this. I don’t think so. The cleantech sector is growing quickly, signaling a vibrant demand and market for these solutions. Buyers are seeking cleantech innovations, and sellers are becoming more skilled at finding and selling to ready buyers.
In a soon to be released 2011 Canadian Clean Technology Industry Report, Analytica Advisors reports Canadian clean technology industry revenues exceeded $9 billion in 2010 and grew at an annual rate of 19 percent for the period 2008 to 2010.
Revenues are expected to reach $17 billion by 2015, assuming an 11 percent growth rate. Globally, cleantech is on track to be the third largest industry sector by 2020.
In spite of the mega-recession, or perhaps because of it, environmental sustainability, and its corollary, cleantech, is not going away. The Boston Consulting Group and MIT Sloan Management Review joint global executive study (Aug. 2011) found 60 percent of executives reporting an increase in sustainability investments in 2010.
Reasons cited include resource efficiency, remaining competitive, brand building and…you guessed it, competitive advantage. Furthermore, in a 2010 Global 500 report by the Carbon Disclosure Project, 85 percent of reporting global companies had delegated either board or senior executive responsibility for climate change. Almost half of them embed climate change initiatives into business strategy and across the organization.
If you don’t intend to let get left behind in the clean industry revolution, keep checking in here. Guest cleantech and business sustainability experts will be sharing examples and tips to adopt sustainability and cleantech in your business for your competitive advantage.
Susan Sheehan, president and CEO of Leapfrog Sustainability Inc., has 20 years experience in clean technology and sustainability strategies. An invited speaker in North America, Europe and Asia, she is also a columnist, a presenter for the Climate Change Institute, and a certified CSR Practitioner. Susan has worked with companies such as Philips Lighting, Ingersoll Rand, Haremar Plastics Inc., BASF, Canadian Standards Association, Tembec, Queens School of Business, and Rotman School of Management. She can be reached at (416) 479-4266 or firstname.lastname@example.org