PHOTO
Green entrepreneurs need to make an attractive business case if they are to stand a chance of attracting finance, a panel of experts at the World Green Economy Summit (WGES) said on Tuesday.
They want good returns, regardless of the impact on the environment, but if returns are equal, the majority will invest in green projects, said Lars Kroijer, founder and CEO of online capital finder AlliedCrowds, which matches projects in the developing world with investors.
“If there is a choice between two investments, same return, one of which is a green investment, I don’t think I have met one hedge fund manager who would not choose the green investment,” Kroijer said at a WGES panel debate on funding green projects. “They are not intrinsically bad people.”
Kroijer, a former hedge fund manager who continues to invest in them himself, also warned against applying a “double standard” to investors, pointing out that most people choose not to use their own money to invest in green initiatives, but expect banks and governments to do so.
“When we are talking green, we are talking other people’s money, when we are taking about our kids’ savings, the money we will leave to them, we are talking Vanguard,” he said. Vanguard is US-based investment management company specialising in low-cost, actively-managed investment funds, which had $4.7 trillion worth of assets under management at September 30, 2017.
Sam Manaberi, founder and CEO Of Trine, an investor for projects focused on bringing solar power to developing countries, said he had so far seen €2.2 million ($2.6 million) invested, which is small scale in terms of world finance as much of it was provided by individuals who put in as little as $25 a time, then increase this as a project succeeds.
Trine has so far provided 180,000 people with electricity who would otherwise rely on kerosene and diesel fuel, which was the equivalent reduction in environmental impact of 13,000 plane journeys back and forth between Dubai and New York, Manaberi said.
However, companies that want to invest want to make a larger impact.
“Money is not the problem,” he said, “It is proving the risk.”
For Manaberi, who said his company is EU-based, but will open in the Middle East if there is sufficient interest, the mistake some green entrepreneurs make is trying to attract investors by talking about the environmental benefits of their projects, rather than profit potential.
Talking to a sustainable start-up owner in the audience, he said: “When you meet an investor, you have 10-15 minutes to convince them to invest in you. If you spend all of this talking about the environmental impact then you are going to lose some of them. Talk about the business case first.”
Asked whether investors who put their money into green initiatives should be content with a lower return because they were making a positive environmental impact, Samy Ben Jaafar, director of the Green Fund, said there would soon cease to be a difference, as investors and companies will have no choice but to make decisions that consider the environmental impact.
“Sooner or later, you will have boards getting together and saying, ‘we have not thought what climate change is going to do to our logistics chain,” he said.
The World Green Economy Summit is being held at Dubai International Convention and Exhibition Centre on 24-25 October.
Further reading:
© ZAWYA 2017
They want good returns, regardless of the impact on the environment, but if returns are equal, the majority will invest in green projects, said Lars Kroijer, founder and CEO of online capital finder AlliedCrowds, which matches projects in the developing world with investors.
“If there is a choice between two investments, same return, one of which is a green investment, I don’t think I have met one hedge fund manager who would not choose the green investment,” Kroijer said at a WGES panel debate on funding green projects. “They are not intrinsically bad people.”
Kroijer, a former hedge fund manager who continues to invest in them himself, also warned against applying a “double standard” to investors, pointing out that most people choose not to use their own money to invest in green initiatives, but expect banks and governments to do so.
“When we are talking green, we are talking other people’s money, when we are taking about our kids’ savings, the money we will leave to them, we are talking Vanguard,” he said. Vanguard is US-based investment management company specialising in low-cost, actively-managed investment funds, which had $4.7 trillion worth of assets under management at September 30, 2017.
Sam Manaberi, founder and CEO Of Trine, an investor for projects focused on bringing solar power to developing countries, said he had so far seen €2.2 million ($2.6 million) invested, which is small scale in terms of world finance as much of it was provided by individuals who put in as little as $25 a time, then increase this as a project succeeds.
Trine has so far provided 180,000 people with electricity who would otherwise rely on kerosene and diesel fuel, which was the equivalent reduction in environmental impact of 13,000 plane journeys back and forth between Dubai and New York, Manaberi said.
However, companies that want to invest want to make a larger impact.
“Money is not the problem,” he said, “It is proving the risk.”
For Manaberi, who said his company is EU-based, but will open in the Middle East if there is sufficient interest, the mistake some green entrepreneurs make is trying to attract investors by talking about the environmental benefits of their projects, rather than profit potential.
Talking to a sustainable start-up owner in the audience, he said: “When you meet an investor, you have 10-15 minutes to convince them to invest in you. If you spend all of this talking about the environmental impact then you are going to lose some of them. Talk about the business case first.”
Asked whether investors who put their money into green initiatives should be content with a lower return because they were making a positive environmental impact, Samy Ben Jaafar, director of the Green Fund, said there would soon cease to be a difference, as investors and companies will have no choice but to make decisions that consider the environmental impact.
“Sooner or later, you will have boards getting together and saying, ‘we have not thought what climate change is going to do to our logistics chain,” he said.
The World Green Economy Summit is being held at Dubai International Convention and Exhibition Centre on 24-25 October.
Further reading:
- Zawya's Special Coverage on the World Green Energy Summit 2017
- WGES 2017: Dubai's National Bonds signs $653 mln deal to finance clean energy projects
- WGES 2017: Huge spending required to meet climate change targets
- WGES 2017: Funding the biggest barrier to renewables schemes, says expert
- WGES 2017: Road map for Dubai's $27bln green fund to be laid out this week, says Dewa chief
© ZAWYA 2017
