Climate solutions: An investment into Israel's future - opinion

Much has already been written about the new government in Israel. In terms of the environment, however, we’re still waiting to hear about its plans from the new environmental protection minister, Idit Silman.

One of the first moves of the Finance Ministry was to reverse the tax on single-use plastics, in what had been received by the ultra-Orthodox community as a tax specifically targeting them. Clearly, a lot of work needs to be done to consult with different sectors of the public in order to get their input on measures that will help the environment.

However, I think it’s important not to lose perspective. When former prime minister Naftali Bennett spoke at the COP26 summit, he suggested that the biggest contribution Israel can make to fighting climate change is in the field of innovation. I recently attended an investors roundtable, organized by the Abrahamic Business Circle, where such innovation was on full display.

I was particularly interested in a presentation given by a company called Capital Nature. With Israel being known as the Start-Up Nation, there are countless funds for investing in Israeli innovation. However, according to Capital Nature, a new phenomenon is beginning to emerge – that of climate-only funds. While many funds nowadays invest in hi-tech, including green technologies, climate-only funds invest only in sustainable innovations that are expected to help make a difference in the global fight against climate change.

The thinking behind this is that what’s good for business should also be good for our planet and people, and what’s good for the world should also be good for business.

Climate solutions: Not just renewable energy

Originally an incubator set up by the Israel Innovation Authority, Capital Nature brought together a diverse group of corporate investors 10 years ago. These included defense companies Elbit Systems and Rafael, the Ratio energy group, Direct Insurance, Ben-Gurion University and other Arava-based entities, as well as the UK-based Consensus Business Group. What did they all have in common? The desire to drive their own innovations and find Israeli energy and climate solutions of the future.

Today, many more institutional as well as private investors have joined the fund. Ofir Gomeh, Capital Nature’s CEO, says its core team of six – and the companies they invest in – are supported by an academic and business advisers network, as well as by Elbit and Rafael’s thousands of engineers and experts, who are willing to share their expertise. He says this network means that Capital Nature is equipped to perform due diligence and invest in early-stage deep-tech and hardware technologies.

Renewable energy is part of the fund’s focus, but there are also surrounding challenges, such as maintaining renewable energy facilities, storing excess energy, and managing it. So the fund has identified and invested in a number of technologies to tackle these issues, including companies as diverse as Blade Ranger, Exency, Enervibe, Augwind and EExion.

Blade Ranger has developed an autonomous robot that cleans solar panels, which won’t work effectively if they’re dirty and can’t absorb the sun’s energy.

Exency is working on a new innovation, generating energy from differences in the temperature in the air.

Enervibe is an IoT company that generates electricity from kinetic movement. Its technology is already available for tire applications and is expected one day to be used for powering electric cars, as well as many other electronics of the future.

Augwind has worked out a long-lasting system to store energy from wind farms and solar panels in underground compressed air tanks.

EExion is developing a non-lithium (which is scarce and polluting), iron-based electrochemical solution for energy storage and grid power management.

Another key focus: sustainable mobility

Sustainable mobility includes solutions such as electric vehicles, as well as the infrastructure and software to support their development. For instance, Capital Nature has invested in Electreon, which has developed wireless charging roads for electric buses and trucks. These are currently being piloted in Tel Aviv, as well as in the US, Sweden, Germany, Italy and several other markets.

Graphite is currently used in EV batteries but is scarce, expensive and not very energy efficient. So Silib is reportedly developing an alternative, using silicon-based batteries to replace graphite and enhancing the battery capacity by up to 40%.

Capital Nature has also invested in a software company called Make My Day, which helps EV fleets to plan their routes according to charging station locations, cost and speed of charge.

Trucknet’s platform provides a truck logistics marketplace for cargo owners (initially across Europe), helping to take half-empty motortrucks and vans off the road. And Zooz Power offers ultrafast EV charging stations.

Out of the 15 companies focusing on energy and sustainable mobility that Capital Nature invests in, five have already been taken public, providing a good return to investors. And the fund is now diversifying its focus.

From new materials to smart cities

One focus is on the circular economy, which involves identifying new, better materials, as well as ways to reuse or recycle materials or water, and other carbon-related activities.

Copprint, for example, has developed a new material – nanoparticle, non-oxidating copper – for the enormous printed electronics industry (computers, phones, TVs and so on). This is apparently less polluting, produces less material waste, and is cheaper to produce than the traditional copper manufacturing process.

Another company, Algaeing, has produced a dye offering a rainbow of colors for the textile industry, out of algae grown on farms near Eilat. The nature-based dye reportedly uses 80% less water in the dying process, saves energy, too, and is non-polluting.

In addition, Capital Nature is investing in the built environment, including sustainable ConTech (construction), PropTech (property) and smart cities innovations. RoadSense, for instance, uses radars to monitor anything moving, like trains and bicycles. This not only helps to keep cities moving but also assists with sustainable urban planning and even issues like maximizing train occupancy.

“We’re seeing a clear trend – worldwide, not just in Israel – toward capital, entrepreneurs, academics, investors and corporates prioritizing climate,” explains Ofir. “No sector or industry remains unaffected by climate.

“But there has to be an economic basis for a sustainable investment. Government subsidies and tax incentives are just a kick-start business model. A sustainable innovation needs to be viable for the long term.”

Climate solutions leading to diplomatic solutions

Ofir is a big believer in expanding Israel’s innovation and cooperation, starting off with countries that have signed normalization agreements with Israel, like the UAE and Bahrain, but hopefully not ending there.

“We’re striving to expand eastward to the Gulf and are focused on deploying Israeli climate technologies in countries that face similar problems, such as limited drinking water and energy issues. Piloting Israeli technologies in our small country – but then deploying them across the Gulf – goes hand in hand with the Abraham Accords. In my opinion, the more investment, perspectives, networks, expertise, connections, the better – it’s all about bringing more brains around the table.”

I have to say that I agree. With the global movement toward decarbonization, the potential has never been greater to do good while doing business.

While I am in no way a financial adviser (and I don’t recommend that people take investment advice from me), I do believe that sustainable investments are not only helping to drive innovation and economies but are also playing an important role in finding solutions to some of the biggest challenges facing our world today.

And if peace can be increased in the process, that can’t be a bad thing, either.

The writer is Middle East correspondent for India’s WION (World Is One News) TV news channel. The author of Tikkun Olam: Israel vs COVID-19, she has helped numerous multinationals report on their contributions to tackling the UN’s Sustainable Development Goals. On Twitter: @JodieCohen613.