Investment is a catalyst for the energy transition

One of the key actions required to make meaningful emissions reductions over the long term is investment into innovative low-carbon technologies across multiple sectors. It’s estimated that for Canada to reach net-zero greenhouse gas emissions by 2050, over $100 billion of investment needs to occur each year in areas like building retrofits, grid transformation, and technological breakthroughs. However, current statistics show that Canadian start-ups focused on climate tech have been underfunded relative to their global peers. In 2021, only 5% of Canadian venture capital investment was allocated to these companies, compared to a global average of 14%.

We expect this capital investment gap to close significantly over the short term, as a result of new tax incentives, an increase in dedicated climate funds, and increasing urgency from countries looking to decrease emissions. Recently, the Business Development Bank of Canada announced a new sustainability venture fund Opens in a new window. focused on financing tech investment companies looking to create sustainability-enhancing technology systems. A lot of climate funds today focus on the more greenhouse gas-intensive industries such as steel, cement, and electricity. This new sustainable venture fund, however, fills a gap in investment for companies looking to create new efficiencies and drive emissions reductions through technology and software.

While investment from both public and private sources continues to flow into clean technology, the scale of investment needs to materially increase in order for Canada and its global peers to fully transition to a new low-carbon economy. Investors in CIBC Asset Management’s Sustainable Investment Strategies are helping to close the investment gap through the annual Impact Donation (PDF, 350 KB) Opens in a new window.. For 2023, CIBC Asset Management will be donating $28,000 to the Energy Transition Centre (PDF, 150 KB) Opens in a new window.. The Energy Transition Centre is a collaboration between the University of Calgary, Innovate Calgary, Avatar Innovations, and the energy industry.