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Climate Tech Investment Grows To Record $2.2B in 2021 – NoCamels – Israeli Innovation News

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This year was said to be a remarkable one for the Earth’s climate, but also a challenging one as extreme weather disasters fueled by climate swept the world fast and furiously, affecting the population at large. Meanwhile, the topic of climate change continued to be an important, much-talked-about issue. And it sparked the establishment of more and more international companies, cropping up to provide technological solutions to the world’s growing list of climate change problems.

Israel is poised to become one of the major players in the climate innovation and climate tech sector. In 2021, climate tech companies in Israel raised more than $2.2 billion in investments, according to PLANETech, an Israeli nonprofit community focused on climate technologies established earlier this year as a joint venture of Israel Innovation Institute, led by Dr. Jonathan Menuhin, and Consensus Business Group,

“By the end of 2021, the annual investments in Israeli climate tech companies reached $2.2 billion, exceeding last year’s fundraising record of $1.4 billion by 57 percent,” said Uriel Klar, director of PLANETech, when the data was released.

Stormy skies in Caesaria where the coastline is being eroded. Deposit photos
Stormy skies in Caesarea where the coastline is being eroded. Deposit Photos

“This was really the year for climate tech,” he tells NoCamels separately in an interview on the new figures. Statements from tech heavyweights such as Bill Gates, who recently declared the climate tech sector would build around 10 companies the size of Google and Amazon and BlackRock CEO Larry Fink, who predicted the next 1,000 unicorns would be climate tech firms, made a significant impact on the world this year.

Klar also says that more investments are going into startups in the climate tech sector, noting a report from multinational financial consultant PwC that shows venture capital and private equity investments reached $87.5 billion for global climate tech firms from June 2020 to June 2021, an increase of 210 percent from the same period the previous when $28.4 billion was invested in the sector.

PLANETech has said that climate tech has become the fastest growing and most promising field in the high-tech industry in Israel. But it was only recently that it became clear that Israel was joining the global trend.

According to Klar, Israel is eager to join the movement “because it’s something that really affects the high-tech industry on a global level” but that there’s still a ways to go. “When you see what’s going on outside of Israel and the advancement of Europe and the US and other ecosystems with regards to climate tech, you understand there is a gap between the potential that Israel has to be a climate leader to the actual things on the ground. That’s very clear when you speak with startups [in Israel.] When you speak with investors, though, most of them are not familiar with the field at all and most of them do not have the same level of knowledge as their colleagues in Europe and the US.”

infographicsinfographics
Courtesy: PLANETech

That’s essentially why a community like PLANETech was founded earlier this year, Klar tells NoCamels. The issue was important in other regions, but in Israel “nobody knew the term climate tech. It was a desert in terms of a climate tech ecosystem.”

Things changed in late October when Prime Minister Naftali Bennett told world leaders at the UN’s COP26 climate summit in Glasgow that Israel can “lead the way” and “become a climate innovation nation.

Two weeks prior, PLANETech and the Israel Innovation Authority released an extensive report on the climate tech sector in Israel, mapping out 1,200 climate companies, with 637 of them being startups that are developing climate technologies. The report showed that while there were still challenges ahead and room for improvement, there had been an appreciable spike in the number of new startups dealing with climate issues in Israel. The proportion of these new climate companies out of the total number of new high-tech companies increased considerably in the years ahead, reaching nine percent of the total companies established in 20202.

While Bennett indicated to the world that Israel was ready to step up its efforts to fight climate change, the report indicated that “there’s an ecosystem in Israel for climate tech and while there are some challenges and opportunities, we have high-quality startups that raised a lot of money have the potential to have a bigger impact,” Klar explains.

“I think that was one of the reasons for Bennett’s declaration, though of course not the only one. But in order to state something like that, you need to have the data to support it,” he adds.

UBQ MaterialsUBQ Materials
UBG Materials. Courtesy.

That data now includes four companies that have made significant strides in taking action to fight climate change. Last week, Future Meat Technologies, a clean meat developer, raised $347 million for its lab-grown meat, the largest-ever investment in a cultured meat company. Fabless IoT startup Wiliot has raised $200 million to improve the supply chain footprint through battery-free sensors. UBQ Materials just raised $170 million to convert waste to a climate-positive thermoplastic substitute. Israeli-founded ride-sharing company VIA has raised $130 million to promote an advanced digital platform for shared transportation.

Klar also notes that Israel’s smart energy tech firm SolarEdgeas the first Israeli company to enter the S&P 500 index and weather platform Tomorrow.io is in the process of going public on the Nasdaq at a $1.2 billion valuation.

Lab-cultured chicken breast by Israeli food tech startup Future Meat Technologies. Photo: PRNewsfoto/Future Meat TechnologiesLab-cultured chicken breast by Israeli food tech startup Future Meat Technologies. Photo: PRNewsfoto/Future Meat Technologies
Lab-cultured chicken breast by Israeli food tech startup Future Meat Technologies. Photo: PRNewsfoto/Future Meat Technologies

“We are leaders in everything that is related to technology and innovation. We have the infrastructure, the entrepreneurs, we have everything. So it’s clear that we have the potential to become a real dominant player in the climate tech field. Now, our potential is partly fulfilled because only some of the companies are really working around climate change. We have some good companies that we can look at and say, these are the leaders. We need more of these — because it doesn’t happen overnight,” says Klar.

“We need to see more from the high-tech leaders and we need to see more leadership from the government. Although we already see this, we need more from the government and more from Israeli VCs that are not yet investing in climate tech but taking bold steps and saying it’s an important topic,” he continues.

“There’s a dynamic here and we need to see more leadership from all sides to get a real, developed ecosystem,” he adds.

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Toronto index set for biggest weekly drop since early December

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Canada’s main stock index fell on Friday as weaker crude oil prices weighed on energy stocks, putting the benchmark index on course for its biggest weekly drop since early December.

At 9:35 a.m. ET (14:35 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 141.11 points, or 0.67%, at 20,917.07. It hit a more than two-week low in the previous session.

The index has lost 2.4% so far this week, hurt by higher bond yields as expectations build that central banks will hike interest rates over the coming months to tame unruly inflation.

The healthcare and technology sectors have dominated the weekly losses, dropping 7.4% and 4.5%, respectively.

On Friday, the energy sector led the declines with a fall of 1.9% as an unexpected rise in U.S. crude and fuel inventories profit-booking pressured crude oil prices.[O/R]

The financials sector slipped 0.8%, while the industrials sector fell 0.5%.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.4% on weaker copper prices. [MET/L]

On the economic front, data showed Canadian retail sales rose 0.7% to C$58.08 billion ($46.40 billion) in November on higher sales at gasoline stations, and building materials and gardening equipment and supplies dealers.

“Canadian retail sales for November grew less than expected, while new house price inflation plateaued at a high level, another sign of stagflation in the North American economy,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

HIGHLIGHTS

The TSX posted one new 52-week highs and 10 new lows.

Across all Canadian issues there were two new 52-week highs and 55 new lows, with total volume of 32.05 million shares.

 

(Reporting by Amal S in Bengaluru; Editing by Aditya Soni)

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CAPP expects oil and gas investment to rise 22 per cent this year to $32.8 billion – Energeticcity.ca

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But CAPP president Tim McMillan pointed out that in spite of the fact that oil prices are at seven-year highs and companies are recording record cash flows, capital investment remains well below what it was during the industry’s boom years. In 2014, for example, capital investment in the Canadian oilpatch hit an all-time record high of $81 billion, capturing 10 per cent of total global upstream natural gas and oil investment.

“Today we’re at $32 billion, and we’re only capturing about six per cent of global investment,” McMillan said. “We’ve lost ground to other oil and gas producers, which I think is problematic for a lot of reasons . . . and it leaves billions of dollars of investment that is going somewhere else, and not to Canada.”

Investment in conventional oil and natural gas is forecast at $21.2 billion in 2022, according to CAPP, while growth in oilsands investment is expected to increase 33 per cent to $11.6 billion this year.

Alberta is expected to lead all provinces in overall oil and gas capital spending, with upstream investment expected to increase 24 per cent to $24.5 billion in 2022. Over 80 per cent of the industry’s new capital spending this year will be focused in Alberta, representing an additional $4.8 billion of investment into the province compared with 2021, according to CAPP. 

While the 2022 forecast numbers are good news for the Canadian economy, McMillan said, it’s a problem that companies aren’t willing to invest in this country’s industry at the level they once did. 

He said investors have been put off by Canada’s record of cancelled pipeline projects, regulatory hurdles and negative government policy signals, and many now see Canada as a “difficult place to invest.”

However, Rory Johnston, managing director and market economist at Toronto-based Price Street Inc., said laying the decline in the industry’s capital spending at the feet of the federal government is overly simplistic.

He added while current “rip-roaring, amazing” cash flows and a period of sustained high oil prices will certainly give some producers the appetite to invest this year, Johnston said, it will likely be on a project-by-project basis and certainly on a smaller scale than the major oilsands expansions of a decade ago.

“You have global macro trends across the entire industry that have begun to favour smaller, fast-cycle investment projects — and most oilsands projects are literally the polar opposite of that,” he said.

One reason capital spending isn’t likely to return to boom time levels is because companies have become much more cost-efficient after surviving a string of lean years. And that’s not a bad thing, Johnston said.

“The decade of capex boom out west was tremendously beneficial for Canada and Albertans, but it also caused tremendous cost inflation,” he said.

“While what we’re seeing right now is not as construction-heavy and not as employment-heavy —and those are two very, very large downsides — the upside is that you’re much more competitive in a much more competitive oil market,” Johnston said.

In a report released this week, the International Energy Agency (IEA) hiked its oil demand growth forecast for the coming year by 200,000 barrels a day, to 3.3 million barrels a day. 

According to the IEA, global oil demand will exceed pre-pandemic levels this year due to growing COVID-19 immunization rates and the fact that the new Omicron variant hasn’t proved severe enough to force a return to strict lockdown measures.

This report by The Canadian Press was first published Jan. 20, 2022.

Amanda Stephenson, The Canadian Press

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Cash-flow investing isn't just a strategy for your grandparents – Financial Post

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Cash-flow investing is increasingly attractive during times of increased market volatility

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The outlook on the Omnicron variant of COVID-19 on global markets is changing by the minute, but I am reminded of a tried-and-true approach that can provide investors with some peace of mind during uncertain market conditions: focusing on the value quality that cash flow adds as opposed to movements in the asset price.

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Cash-flow investing, in basic terms, means purchasing an asset that provides income at regular intervals versus one solely based on price appreciation. Whether it is monthly, quarterly, semi-annual, etc., you will receive regular cash distributions that can be reinvested or used to finance your lifestyle.

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Considered a relatively conservative approach to investing, acquiring cash-flow-producing assets can be attractive for a number of reasons.

First, the asset will provide value on a regular basis regardless of its current market price. A temporary drop in value can be viewed as positive for cash-flow investors because they can now use the distribution amount to buy more of the asset at a distressed price, hence increasing their future cash-flow amount.

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Secondly, dividends or proceeds from cash-flow investments can be used to fund lifestyle expenses in retirement without eating into your overall pot of capital.

This shift in focus from market price to value can help diversify investment portfolios and mitigate the impact of public market uncertainty. Ultimately, cash-flow investments provide flexibility to rebalance, protection against market volatility, and peace of mind that you’re earning sustainable income with less concern about the economic impact of current events.

For example, in February 2020, we switched our monthly cash-flow-producing assets from reinvest to pay out for many clients when public equity markets sharply reacted to COVID-19 uncertainty. This free cash flow allowed us to purchase dividend-paying equities at a large discount for the ensuing six months until they reached their pre-pandemic valuations.

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Dividend-paying equities are just one of several types of cash-flow investments.

Real estate : Cash flow is the result of proceeds from rent collected. The value of the property will likely appreciate over the long term, but the cash flow produced monthly or annually is relatively consistent. The goal here is for the income from the property to cover all your costs on the property and provide a steady profit.

Investing in a real estate fund can be an excellent source of passive income and provide steady long-term returns. Real estate funds can have a similar return to individual property ownership without the added stress of personally maintaining the property.

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Mortgage funds : Cash flow comes from regular loan interest repayments over the term of the loan. Loans are often secured by real property with a varying loan-to-value ratio.

Private assets : Assets such as private debt offer higher-yielding returns with significantly lower volatility than publicly traded securities. By their nature, private assets are not subject to the same whims of the crowd that the public markets are.

Dividend-paying stocks : Arguably the most volatile cash-flow-producing investment available to the average retail investor. The income from dividend-paying stocks can be less consistent than other cash-flow-generating assets. Also, your investment value can fluctuate depending on market events and the company’s performance. One strategy for mitigating some of the volatility is to invest in a fund focusing on long-term growth in a large number of dividend-paying stocks.

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Bonds or bond funds : Bonds, essentially the debt of companies or governments, can provide relatively low returns, but are generally viewed as safe investments depending on their rating. Again, a way to protect your bond investment and still see regular cash flow is to invest in a bond fund that provides diversification across the bond market.

As a whole, cash-flow investing helps protect investors in volatile markets while also taking advantage of temporary market troughs. This is one strategy I would recommend to all investors regardless of portfolio size. If there’s one thing I’ve learned over the past number of years, there’s never a wrong time to start.

James McCarthy, CIM, is a senior wealth associate/client relationship manager at Nicola Wealth. This article should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. All investments contain risk and may gain or lose value. Nicola Wealth is registered as a portfolio manager, exempt market dealer and investment fund manager with the required provincial securities commissions.

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