7 Nov 2023

Investcorp, a global investment manager specializing in alternative investments, today released a new whitepaper, “Disruption & Transformation Ahead: The Climate Solutions Opportunity”, describing the rapidly emerging opportunity to invest in businesses providing products, services and technologies that support and accelerate decarbonization and address the impacts of climate change.

The paper points out the tailwinds and catalysts that Investcorp believes will make the Climate Solutions investment opportunity comparable to and larger than the disruption and wealth creation of the digital revolution which gave rise to rapidly dominant new businesses and markets.

It notes that while spending on energy transition projects such as utility scale solar and offshore wind has intensified, Climate Solutions more broadly refers to an emerging category of products and services that:

• Address the decarbonization of energy sources and other products and services;
• Facilitate the removal or mitigation of GHG emissions, including through engineered and nature-based solutions;
• Reduce climate-related risks through adaptation and resilience of assets, infrastructure, and services; and provide climate-related analysis, reporting and intelligence.

Examples of Climate Solutions businesses include new solutions for measuring an organization’s own emissions footprint (data that may soon be required to be reported by regulation), new construction products that both reduce emissions embedded in core materials such as concrete and save construction time or provide management systems that reduce a building’s ongoing energy costs, systems that help optimize battery storage capacity or charging station networks for electrified transport, and new agricultural solutions that reduce inputs (water, fertilizer) using sensor-based management or provide alternative ways of producing proteins.

“We believe Climate Solutions presents a unique opportunity for investors to do well and do good,” said James Socas, Managing Director. “Meeting decarbonization goals and addressing climate challenges will require the capital and business building skills of leaders in the private sector. New products will need help to rapidly scale, and existing businesses will require financial support and operational guidance to pivot to serve the large and rapidly growing climate-driven markets.”

“As the risks and costs of climate change become more apparent, climate solutions become more compelling with rapidly growing markets and end user demand,” said Habib Abdur-Rahman, Investcorp’s Global Head of Sustainability. “Not only can the Climate Solutions opportunity create massive new businesses comparable to the digital revolution, but it has the potential for more rapid value creation given the urgency and tight timeframe to avoid catastrophic climate change”, he said.

The paper is authored by James Socas, Managing Director and Head of Climate Solutions at Investcorp, and the Firm’s global head of sustainability Habib Abdur-Rahman.

For more information, download the complete white paper here.