Welcome to our EnviroTech Insights report for 2024.
Published alongside our annual EnviroTech 50 ranking, the report quantifies and reflects technology trends in green energy, to protect the environment and boost sustainability.
After our readers and an expert judging panel together decided the UK’s most innovative startups, scaleups and established technology firms serving the sector, we canvassed views from the 50 companies.
Trends
We asked the EnviroTech 50 and judging panel to describe a particular trend they have noticed in the sector in the last year.
Dr David Pugh is director for sustainable industry at Digital Catapult – the UK authority on advanced digital technology – and a judge on the ranking.
“I’ve seen a great move from discussion to action,” asserts Dr Pugh. “Companies have gone beyond just commuting to net zero to actually implementing sustainable innovation – and are reaping the benefits of doing so.
“This year we’ve launched four acceleration programmes for industrial adopters of technology and early stage solution providers, and the uptake has been fantastic. These programmes mean that we’re now seeing the decarbonisation of glass manufacture, implementation of a circular economy in construction and the development of low cost green hydrogen, all enabled through digital technology.”
EnviroTech 50 – UK’s most innovative green tech creators for 2024
Another of our judges, Joel Blake OBE, is founder & CEO at FinTech GFA Exchange and was recognised as ESG Entrepreneur of the Year at the Impact AM Awards in 2023.
“I have noticed a growing trend in the use of alternative data to support due diligence processes for long-term investments in the environmental space, especially within investment in energy transition opportunities,” he says.
“I am an advocate for this as diverse data sources unlock new and hidden intelligence that can drive innovation. The key is to ensure such intelligence is actionable, not more reporting to truly add value.”
IPG Energy topped this year’s ranking with its green replacement for diesel generators. CEO Toby Gill outlines the need to decarbonise in the construction sector – an estimated 37% of global carbon emissions come from the built environment – and says there is a hunger to reduce carbon emissions from onsite power generation.
IPG Energy – Reinventing fuel-based power for the net-zero future
“This is a challenge as the premium that must be paid to do so is simply too high,” he adds. “Geographic restrictions and the need for large power draws can mean grid connections of the size required are not practical or economically viable. Equally, despite the great strides from a number of suppliers, such as JCB and Volvo, to introduce electric tools and plant machinery, this only increases demand for on-site power for charging purposes, which must be delivered with fuel-based power generation where grid connections are not large enough.
“Beyond the challenges of procuring cost-effective alternative generators, replacing diesel generators with single-fuel renewable solutions brings with it operational risk. Companies wishing to scale these single-fuel solutions across their business are having to weigh the increased risk of delivery disruptions and power outages that emerging supply chains for alternative fuels currently present.”
Gillian Harrison is CEO at Whitefox Technologies, a London company which creates membrane solutions to reduce energy consumption, water usage & greenhouse gas emissions in industry.
“In many respects, the industrial sector has begun the shift towards a more environmentally conscious approach to decarbonising certain parts of its value chains,” says Harrison.
“A technology trend that I foresee playing a larger role in companies’ strategies is the use of bioethanol as a feedstock for sustainable aviation, green chemicals and greater percentage blends in road transport, up to E85. This limits greenhouse gas emissions as well as reducing harmful particulates in the atmosphere.
“This is a commonsense approach as it leverages the current global supply, primarily located in the US and Brazil, with some in Europe, and can make an immediate impact on the company’s carbon footprint.”
Sophie Walker (above), CEO and co-founder at Manchester-based digital waste tracking firm Dsposal, says there is an increasing appreciation of data’s role in enabling many of the innovations emerging to address the environmental challenges humanity faces.
“However most of the businesses we’ve spoken to have very low levels of data maturity – and a lot of software out there isn’t designed to deliver high quality data,” she continues. “Open standards for data are a vital foundation to enable better data across sectors, and we’re seeing increasing interest in this space – like the international interest and uptake of the Open 3P standard for packaging data which we developed alongside Open Data Manchester CIC – but supporting sectors to adopt standards requires a lot of effort since there is such a significant data skills gap.
“With digital product passports (DPPs) on the horizon in Europe, businesses are going to need to invest in getting on the front foot with their data strategy, or risk an ever increasing reporting burden.”
Coming trends
As for expected trends in the coming 12 months, Dr Pugh anticipates a greater focus on green digital technologies, especially green AI.
“The use of AI and large language models like ChatGPT have massive potential for helping us to reach our net zero goals, but need to be deployed in an environmentally responsible way,” he qualifies. “As more digital infrastructure is built in the UK, I expect to see us really focusing on how we manage digital infrastructure in an environmentally positive fashion – whether it’s utilising existing assets to manage telecoms infrastructure or implementing heat recovery within data centres to our heat networks to warm homes.”
Walker says there are exciting developments around data spaces to support regions and sectors to more seamlessly exchange data across supply chains. “I think we will see a need to significantly increase transparency and validate environmental/sustainability claims going forward as regulations tighten up and citizens demand more responsible practices from business – and no, the answer is not blockchain,” she says.
Harrison (above) is expecting to see greater investment in cutting carbon by reducing steam and natural gas in industrial processes; installation of renewable energy at a local level for an individual plant’s needs; as well as carbon capture.
“In the US there are big incentives with landmark policies such as the Inflation Reduction Act – but certainty in policy is essential to encourage them to invest in technologies that limit their carbon footprints as currently projects and investments that cut carbon are on pause due to the uncertainty around timing, format, etc,” she adds.
“I anticipate this will be resolved within the next 12 months, giving those producers the certainty they need to make decisions quicker. In the UK election, there is a chance to think long term and put in place something similar to the IRA to spur an investment drive in sustainability.”
Government falling short
Is central government doing enough to promote GreenTech, CleanTech and ClimateTech technologies, in the eyes of the EnviroTech 50?
“No – the government has delayed multiple green energy targets, which damages investor and consumer confidence in the sector,” is the blunt response from Sarah Merrick, CEO of Ripple Energy.
Harrison agrees, calling for modernisation of the UK’s energy infrastructure towards low carbon, low water solutions. “This will future proof the UK towards a Net Zero future; spur the need for training and education in high paid jobs; attract the best brains from around the world by simplifying the visa process; create an investment drive and provide improved energy security.
“Invest today and the UK could become a powerhouse. The private sector will do their bit – there is plenty of money in the markets looking for opportunities. If government provides long-term policies and incentives, the market will respond.”
Gill says although carbon reduction targets have been widely established, there is currently no UK-wide legislative requirement to reduce the levels of pollutant emissions on construction sites.
“With many operatives likely to be working in proximity to the exhaust of a diesel generator until at least 2035, this puts site teams and local communities at significant risk of harm, a risk that increases with the size and duration of the development,” he says.
“National, central government legislation around these pollutants would therefore encourage the adoption of GreenTech and CleanTech products. The work that has already been done to identify viable solutions for achieving zero carbon construction, both within the wider industry and as part of the Construction Leadership Council’s zero diesel sites route map, will make achieving pollutant-free sites even easier.
“Locally, London is leading the way in recognising the harm of poor air quality on human health, and setting legislation to combat this… to have a real impact, we need to see equivalent legislation rolled out nationally.”
Walker would like to see Westminster acknowledge “that we can’t have continued growth and live within our planetary boundaries”.
“Without overhauling our economic models – which are treated like an immutable fact, but are only a human construct – so that they reflect the physical and biological realities of our existence, no amount of GreenTech, CleanTech or ClimateTech is going to help us.
“I’d like to see them adopt the Doughnut Economics model and support businesses that are both finding innovative solutions to our challenges AND embedding business models and governance that reimagine current economic thinking. But that ain’t going to happen.”
Greenwashing
Our EnviroTech 50 cohort and judges agree that there is a ‘greenwashing’ problem in business.
“There are huge problems with greenwashing by companies, in part because sustainability is not a simple issue to address,” says Digital Catapult’s Dr Pugh. “I would like to see more transparency in company reporting and either a reduction in offsetting completely or a market shift, in that we have accountability and visibility of the projects that are being funded and how these activities balance out a company’s emissions.
“What this means in reality is a carbon regulator, ensuring that offsets are certified alongside CCUS to ensure that every tonne of CO2e is accounted for. We equally need to see tougher punishments for companies that do greenwash and incentives for those that actually progress towards our global goals.”
Blake (above) adds: “Although there are global examples of positive impact in the space, there is still an evolutionary need for marrying commercial growth with the social and responsible impact of delivering ESG/sustainability outcomes.
“Even though there is much support for the moral and social impact of doing good, the stark reality is that until firms see tangible commercial impact on their bottom line, and regulatory bodies balance their roles within the ecosystem with being adaptable to change themselves, ‘greenwashing’ will continue to happen in various guises.”
Ripple boss Merrick, whose firm enables co-operative ownership of wind farms to access clean energy, says “there is a big push to greenwash”.
“The government and advertising standards agency has tightened up rules, but to the detriment of genuine green solutions: for example, we are not allowed to call solar and wind ‘green’ energy, which is ridiculous and a direct result of other’s greenwashing.”
Walker also sees a major issue with greenwashing “because the data is terrible, missing, unreliable or fake”. She says this means baselines aren’t accurate, decisions are made with little understanding of what is actually environmentally better, there is limited ability to monitor progress, no independent accountability or oversight, and skewed rewards or risks that don’t reflect reality.
“An example of this is waste reporting – there has been such a push for ‘zero to landfill’, with loads of companies making these claims and loads of waste management companies ‘delivering’ this service, but it is almost always not 100% true,” she offers.
“Aside from the fact it doesn’t mean everything is getting recycled, sometimes landfill is the right/legal route for a waste stream, and the reality is it mostly means waste is sent to incineration where there will be bottom ash and often that has to go to landfill.
“Waste businesses who actually want to provide quality, accurate data to their clients about the actual fate of their waste are penalised because they look like they’re not performing as good a ‘service’ as the firms who just make up the reports to say what their clients want to see.
“I am certain that this kind of misreporting is happening in many sectors, so I would encourage a data and reporting amnesty where we give everyone a clean slate; we all acknowledge that previously the reporting and data weren’t completely accurate; and going forward you have to provide accurate, transparent reporting and data – with no one achieving ‘zero to landfill’.”
“Some months your routes may be better than others because plants/businesses close and new technology emerges, and that is OK – at least you have an accurate picture of the situation and that means you can identify places you could make improvements and make data-driven decisions about the best environmental outcomes.”
Reporting & certification
Judge Dr Pugh (above) says ESG reporting and certification – such as striving for B Corporation status – can be “an incredibly important and useful action for businesses to be doing”.
He continues: “However, it can be a huge administrative challenge, especially for small businesses. Tools that streamline the process and support businesses in demonstrating their action and commitment to environmental impact would help move everyone forward in this regard.”
Walker says signing up for the likes of B Corp status hopefully shows that businesses are at least thinking about their social and environmental impact.
“I do worry about how meaningful it is, especially given the poor quality of the data that underpins a lot of it and the limited oversight of how businesses actually operate on a day to day basis – beyond the paperwork submitted for the accreditation process,” she adds.
Merrick says ‘ESG as a badge’ is widely misunderstood by consumers: “They take it to mean automatically green or good, which is not the case. Consumers would be shocked to learn what can fall under the ESG category, but the badge is used as a catchall for ‘good/climate friendly’ regardless by the sector with the blame for misunderstanding being shoved on to consumers, which is unfair.”
Any other business?
We then gave them the opportunity to raise any other points – positive or negative – around the industry or ecosystem of wider business support.
Judge Sammy Fry (above), head of climate at Tech Nation, outlined the exponential rise in ClimateTech in the UK.
From 200 startups in 2010 to close to 6,000 today – and representing close to 8% of the global market – he says “if it was not for the industry holding arguably the biggest weight on its shoulders to combat one of the biggest crises in history, it could be argued that it’s been a huge success”.
“However, ClimateTech includes a breadth and depth of solutions across every sector, and there is a clear imbalance of technological maturity across specific areas,” he continues.
“Clean energy and electric vehicles are at a point where they are outperforming their fossil fuel derived counterparts, which can certainly be classed as a success; however, both sectors take up a significantly higher share of overall funding into ClimateTech, in comparison to their share of emissions.
“Energy and mobility combined account for approximately 27% of global emissions; however they take up 74% of overall funding into the entirety of ClimateTech. In direct contrast, the built environment accounts for 17% of emissions, while it secures under 6% of overall funding and food, agriculture and land use (FALU) accounts for 22% of emissions, and secures only 8% of funding.
“We need a scientifically backed approach to increase the public funding and amount of capital going into the areas which require immediate support and disruption.”
Walker adds: “I think it’s an incredibly tough time for small businesses: the UK economic landscape, the looming election and the lack of good government are all challenging conditions which cause businesses to put spending and plans on hold while they wait to see what comes next.
“And while there is a big trend in terms of sustainability and the circular economy, there is also a lot of upheaval in this space from a regulatory perspective… leading to uncertainty and bigger businesses/corporates using this as an excuse not to act yet and/or to be focused on dealing with those changes rather than implementing innovative new solutions.
“It can be very frustrating as there are a number of actions businesses could implement that would be environmentally beneficial regardless of regulation, but while they are not provided with certainty by government, they continue with business as usual and use the government as a scapegoat.
“I’d love to see more businesses putting their money where their mouth is and spending some of their huge profits with smaller, innovative businesses that are really trying to make a difference.”