Norway’s Climate Crossroads: A Call to Lead
Fossil fuels have positioned Norway with the largest sovereign wealth fund in the world. Additionally, Norway possesses the financial muscle, industrial know-how, and natural resources to become a global leader in climate innovation. Yet, our climate efforts are lagging behind our potential.
The Norwegian Expert Committee on Climate Finance rightly asks, "If not Norway, then who?" Indeed, who else is better positioned to spearhead innovative climate solutions?
Yes, we're good at making new (industrial) green technology, but we're not making enough of it. Norway’s climate tech startups are growing in numbers and over 50% of the country's venture capital is invested into climate tech solutions. But that’s a drop in the ocean of what is needed to drive real change.
We need investments on a bigger scale to make the green transition possible. How can Norway rise to the occasion?
Climate Capital
At the Drop, one of Europe's leading climate tech meeting arenas, Oslo Business Region is hosting “Help! We’re addicted to fossil fuels” with climate tech investors Dinesh Ganesan (ArcTern Ventures), Anniken Hofgaard (Ferd Impact Investing) and Adele Unneberg (Sandwater), to discuss what is needed to make Norway a climate tech leader.
We had a chat with them and got some of their thoughts prior to the conference:
How can Norway's VC ecosystem better support and scale climate tech startups to make a global impact?
Anniken: Access to capital is key! Especially for the scaling phase. Many of the climate technologies needed already exist, the challenge now is to achieve commercial adoption. That will require huge amount of later stage capital: not only equity, but also debt, infrastructure and project financing.
Adele: In building out a robust domestic capital base covering seed through growth stages. We can work together to leverage the experience and knowledge contained in the Norwegian ecosystem, as well as the connections to bring in collaborative foreign capital along the journey of supporting our climate tech startups to reach their global potential.
Dinesh: Norwegian VCs should continue to strive to make strong connections internationally, especially with potential customers for these startups. This will not only help open doors, but also increase the level of recognition that startups have globally.
What climate tech technologies do you believe offer the most promising investment opportunities for Norway, given its unique resources and expertise?
Adele: Norway has a natural competitive advantage in offshore and maritime industries, and we see a great opportunity to leverage our industrial heritage - benefiting from existing value chains, infrastructure and expertise - to develop sustainable solutions for shipping, aquaculture and offshore energy production.
Dinesh: The maritime sector will always be relevant for Norway. Beyond that, Norway has a good mix of expertise and resources within the minerals value chain, agriculture, industrial software, fintech, and marketplaces. Solutions that blend these verticals with climate impact have strong potential for success.
Anniken: I would also say that Offshore wind and CCUS are great examples where Norway has some very unique competitive advantages: long coastline, world class offshore expertise and infrastructure, as well as access to huge amounts of renewable energy.
How can Norway take leadership in the collective effort on green investments?
Dinesh: Fostering further collaboration between the public and private sector to offer blended capital instruments. While the EU has to constantly deal with the perspectives and ambitions of various stakeholders, Norway has an opportunity to showcase speed and agility in public-private partnerships.
Anniken: The million dollar question. There might be a cultural aspect of it. I think we need to let go of ‘Janteloven’. We need to support and cheer for the winners, as well as the underdogs.
Adele: A Norwegian leadership position on green investments needs to be spearheaded by a concrete and holistic policy strategy in which long-term goals are supported by sector-specific milestones and action plans, incentivising corporate engagement. Within that, availability of non-dilutive funding is critical to realise the required build-out of green infrastructure technologies - from government-sponsored grant programs as well as from commercial banks providing debt structures.
Some final thoughts from Tonje Ørnholt, Head of Investment at Oslo Business Region:
I echo the importance of focusing on building a strong international network and being present at key international arenas. The last 3 years, 65-80% of total investment into Norwegian startups came from international investors. Yes, it is important to be active in Norway too but we need to go out of our bubble and be out there on a global level to be attractive for international investors and to support Norwegian startups scaling abroad.
Norway's financial power and industrial capabilities offer an unparalleled opportunity to lead the world in combating the climate crisis. It's time for Norway to step up and take decisive action. The climate crisis demands leadership, and Norway is well-positioned to provide it.