by Sarah Putt

‘Cleantech’: How NZ CIOs can play a key role in environmental technology

News Analysis
Jul 21, 2021

Callaghan Innovation’s James Muir wants New Zealand businesses to help make New Zealand a lead innovator for climate technology—and adopt it, too.

james muir callaghan innovation
Credit: Callaghan Innovation

The issue of climate change is propelling the environmental technology sector, also known as ‘cleantech’ and ‘climate tech’, but while New Zealand has an estimated 300 innovators they often lack corporate support to take their ideas to the global marketplace. That’s where CIOs can have a vital role to play.

New Zealand research agency Callaghan Innovation defines environmental technology as “technology that reduces or eliminates greenhouse gas emissions (directly or indirectly) or improves use of natural resources.”

Callaghan Innovation’s latest report, released this week, “New Zealand Climate Tech for the World”, shows that local environmental technology companies struggle to raise funding, especially compared to their counterparts in countries such as Finland, Israel, and Denmark, noting: “New Zealand climate tech innovators raised 95% (19 times) less funding than climate tech innovators in the average small, advanced economy.”

According to the report, part of the problem lies in access to capital that supports growing startups into large businesses that are active in other countries and markets.

How CIOs can aid New Zealand’s environmental technology ecosystem

Callaghan Innovation environmental technology lead James Muir says CIOs can look for opportunities to bring about trials of solutions created by local environmental technology business. “There is a real disconnect between the cleantech innovators and the corporates in New Zealand, because corporates have environmental problems that need solving and the innovators have technologies which will help them solve those problems, but it’s very difficult for the corporates and the innovators to work meaningfully together to trial or test the technology.”

Muir says another way CIOs can assist is to offer their IT expertise to emerging companies, by providing networks and advice. “There is certainly a role to directly assist digital cleantech innovators,” he says.

The report drew on information from 98 environmental technology companies that received funding from Callaghan Innovation in the 2020 financial year. The agency’s review of New Zealand’s early- and growth-phase businesses identified as many as 300 environmental innovators working on technologies, including apps, plastic alternatives, new energy sources, and industrial waste processing.

Muir says CIOs can ask the question as to whether their organisation is looking broadly enough for solutions to sustainability and environmental solutions. “For example, say a firm wanted to buy some water monitoring technology. There are actually a lot of water technologies out there, but there are probably only a few which are easily observable. So stretch and challenge and look more deeply for alternatives,” he says.

Muir cites Westpac and CoGo as an example of where an innovator and a corporate have worked successfully together. In this collaboration, Westpac offers CoGo’s carbon-tracking app free to the bank’s customers—basically, it calculates an individual’s carbon footprint using their spending and lifestyle choices.

For CIOs working for global companies, there is an opportunity to trial and potentially promote a local New Zealand environmental technology solution to their counterparts overseas. “It’s really CIOs being able to use that organisation’s reach into international markets to help those cleantech innovators reach out and scale up,” Muir says.

Why environmental technology will be critical for CIOs in the coming years

While the report focusses on sectors such as agriculture and energy, innovative environmental technology solutions are likely to be required by organisations across multiple sectors as new climate change legislation ushers in mandatory climate-related disclosure regulations, Muir says.

“Regulations are a reasonably high-level. It’s got a rollout period, but they are saying that the first climate-related disclosures should be coming out in 2023. So, everyone is running round trying to organise themselves now, and central to it is to ask, ‘What is the organisation I’m working for, what is its carbon footprint?’ Not a simple question because there are the emissions that come directly from the operations of the company, [those that come] indirectly, and those in the supply chain,” he says.

Environmental technology partnership open to businesses

Accompanying the report is the announcement that six public organisations have partnered to create the NZ Cleantech Mission. They are Callaghan Innovation, NZ Growth Capital Partners, National Science Challenges, Auckland Unlimited (part of Auckland Council), Uniservices, and the University of Auckland.

Muir says private organisations are welcome to join the partnership if they are looking to actively participate in the promotion and development of New Zealand’s environmental technology ecosystem. “In this partnership statement, we describe how New Zealand can move from the current situation—where cleantech innovators are often disconnected from each other, customers, and investors—to a situation where innovators collaborate across sectors, work closely with large businesses, and routinely raise significant capital from investors,” the NZ Cleantech Mission document reads.

“We’re not trying to get lots of people to join just for the sake of it. We want people to join and to meaningfully contribute. That would be about encouraging discussion about whether the partnership is a good thing to support at the C-suite level and then looking on how to bring the parties together,” Muir says.

The partnership is developing a five-year roadmap to advance the environmental technology ecosystem and meet goals such as Callaghan’s target for New Zealand to be in the top 10 environmental technology countries by 2023—up from a ranking of 22nd in 2017.