This week marks the beginning of COP26; an important opportunity for reflecting on what we can – and must – do as individuals, businesses and nations to address the global climate emergency.
As a tech sector, we have much work to do. It’s a little known fact that the carbon footprint of the technology sector is greater than the entire aviation industry. At the same time, tech companies (like many others) are generally attracted to carbon offsetting schemes which don’t actually remove carbon from the environment and are often riddled with flaws, while a staggering 40% of emissions reductions are reliant on technologies not yet at mass-market scale.
However, there is hope for a greener future. The UK, in particular, has a unique opportunity to establish itself as a global hub for sustainability, and a world leader in green technology and investment.
This is highlighted in the Net Zero 2021 Report we are excited to launch; a data-led report exploring the opportunities – and the challenges – facing scaling climate tech companies in the UK and across the world. You can read the report here and watch the video we’ve created for it here.
Created in partnership with a range of key stakeholders, including the scaling climate tech companies who have recently joined our Net Zero programme, sponsors BNP Paribas and Sage, UK VC firms and the UK government, the report reveals that 7.8% of global climate tech unicorns – and 5.5% of global Net Zero tech ‘futurecorns’ – are headquartered in the UK, and that UK climate tech companies have nearly doubled in value over the last year – from $24.4bn to $47.6bn!
Net zero is everyone’s responsibility
Just last week, our Net Zero Lead Sammy Fry showcased the incredible work of some of the UK’s inspiring climate tech companies on the global stage at CEATEC 2021, Japan’s biggest tech event, as he spoke alongside UK climate tech scaleup Carbon Infinity. Carbon Infinity is one of the incredible companies in our latest Net Zero cohort who have created modular DAC (direct air capture) technology to physically remove carbon from our atmosphere, while other companies in our inspiring new Net Zero cohort are using space technology to help businesses identify unsustainable activities (Earth Blox) and even creating underground tunnels to transform the way we transport goods (Magway).
I had the privilege of opening the UK Government’s Business, Energy and Industrial Strategy Department (BEIS’) event ‘Your Business Journey to Net Zero’ last week; part of a series of events designed to help small businesses who want to begin reducing their carbon emissions, but are looking for the right tools, solutions and ideas to help them plan their best next steps. I had the pleasure of speaking with the CEO, Michelle You of Super Critical, a company that helps you get to Net Zero.
I was also delighted to speak at WPI Strategy’s recent webinar on ‘The Road to COP26 and Beyond’, which focussed on what individuals, businesses and society can do to tackle the climate crisis now and in the future, alongside Vodafone’s Andrea Dona and Allegra Stratton, the Prime Minister’s Spokesperson for COP26. In particular, this event highlighted the power that the tech sector has to reduce carbon emissions in the UK.
If you’re part of a tech business and would like to find out more about how you can help reduce your emissions, I’d encourage you to read our Tech Zero toolkit, which we created to demystify climate jargon and make it easier for companies to measure their emissions and create a robust net zero plan. If you haven’t yet, please do also sign up to the Tech Zero Pledge to commit to reducing and reporting on your business’ emissions. It’s by working together that we’ll get where we need to be – and it’s never been more important.
How will the Spending Review and Budget affect scaleups?
The Government’s commitment to higher levels of green investment was made clear in the Chancellor of the Exchequer’s speech last week as he delivered the Spending Review and the Autumn Budget, setting out the Government’s spending priorities for the next three years.
This year’s Spending Review comes following an incredibly challenging 18 months for the whole of the UK, and for our international friends and colleagues. The pandemic has changed a great deal – from the way we work through to the relationship between business and government.
But it has also provided an opportunity to reset, to recalibrate and to look to a shared future. The Spending Review and the Budget delivered today set out a bold plan to put technology, innovation and entrepreneurship at the heart of the Government’s ambition to build back better, smarter and greener.
At Tech Nation, we are pleased to be able to support the UK’s founders and tech scaleups in their growth journey as they build this shared future. Since our establishment, we’ve delivered £500m in GVA, a return of £14 for every £1 invested by the Government. We’ve done that by working with hundreds of founders and businesses, including 29% of all UK tech unicorns ever created.
Below is a summary of the measures and announcements from the Spending Review and the Budget relevant to Tech Nation, scaleups, and technology businesses and entrepreneurs across the whole of the UK. We can’t wait to work with you to continue to build this tech nation.
The Government knows that access to talent is critical for the economy broadly, and for tech scaleups specifically. To this end, the Government will introduce a new Scale-up Visa to attract highly skilled people from abroad to the UK’s “fastest growing businesses”. The new visa will allow firms with three years of 20% growth in either head count or revenue to sponsor visas. It will be open to applicants with a job offer with a salary of at least £33,000 and who pass a language proficiency test.
The Government will also launch a Global Talent Network, starting in Silicon Valley, Boston and Bangalore. This Network will work with businesses and research institutions to source the talent the tech and science sectors need. It will also provide a concierge service to support tech talent moving to the UK.
Finally, the Government is aiming to quadruple the size of Skills Bootcamps, particularly in the digital sector.
The Chancellor announced that Government spending on R&D will go from £14.8bn a year now, to £20bn a year by 2024/25, and then to £22bn a year by 2026/27. This will be complemented by expanding the qualifying expenditure for R&D tax credits to include data and cloud computing costs to support cutting edge R&D methods.
- Government investment in tech and innovation
The Government announced a £1.4bn Global Britain Investment Fund to support new investment in manufacturing industries across the UK. This will include zero emission vehicles and life sciences. At Tech Nation, we know that these are some of the sectors that will solve key challenges, and is why we’ve run programmes like Net Zero.
Access to finance throughout a tech scaleup’s life is critical, from creation to listing. The Chancellor announced an additional £312m a year to maintain the Start Up Loans Scheme which will support 33k entrepreneurs.
This will be augmented by more than £1.4bn for the British Business Bank. This money will have a particular focus on supporting Regional Funds and the Regional Angels Fund. At Tech Nation we think this is fantastic: access to capital, particularly outside of London, is one of the major limiting factors in the UK tech sector’s continued growth.
Lastly, the Chancellor confirmed there will be a further consultation on the pension charge cap. This will potentially support institutional investors to deploy more capital into venture capital and the wider technology ecosystem.
The tech sector, and its customers, need the right infrastructure to be able to access the enormous benefits of innovation. To this end, the Government is committing an additional £1.2bn for gigabit broadband. Further, the Chancellor committed to a £114m increase in the National Cyber Security Programme which will support businesses to access tech.
The Government will seed fund a new Centre for Finance, Innovation and Technology (CFIT). The CFIT will focus on the priorities set out in the Kalifa Review, tackling barriers to growth and accelerating the UK fintech sector. The Government has also announced that the Bank Levy Annual Allowance is rising to £100m, which will support the neobanks.
What else has been going on?
- Our growth programmes have kicked off!
This month saw the exciting in-person kick off events take place for our new programme cohort companies from Fintech and Upscale, following last month’s with Net Zero, Applied AI and Libra. It was fantastic to see our network of world-class entrepreneurs meeting with each other, supporting each other and learning from our partners, scale coaches and Tech Nation alumni companies who have been through the scaling journey themselves.
At the beginning of the month, our Insurtech Board ran an event exploring how and where insurtech can have a meaningful impact in the fight against climate change – a prime example of how it isn’t only climate tech companies that can drive us towards net zero. Watch the full event here!
In mid-October, our LawtechUK Panel also announced the eight companies chosen to join the latest cohort of its R&D environment, The Lawtech Sandbox, at the Legal Geek Conference in London. These pioneering companies are all pushing the boundaries of lawtech, and will now receive extensive support to fast-track their transformative ideas, products and services.
- Introducing Finclusion 2021
This month, the Fintech Delivery Panel also announced the launch of a new and inspiring campaign throughout November. Finclusion 2021 is a dedicated campaign designed to stimulate, inspire and showcase how fintech can tackle issues of financial exclusion. It brings together the best of the UK fintech ecosystem to explore how best to accelerate financial inclusion and wellbeing, with exciting events hosted by partners Monzo, Atom Bank, NatWest, Newcastle University, Fintrail, Financial Inclusion Commission, Innovate Finance, Auden, Bright Blue Hare and more.
- Working towards a greener future
With COP, the next couple of weeks will undoubtedly be a learning experience for us all, as we come together as a nation and sector to consider the work we must do to reach net zero.
While you’re following along with the events at COP26, please do sign up to the Tech Zero Pledge, read our eye-opening Net Zero 2021 Report and find out more about the UK’s incredible climate tech companies who are leading the way to a greener future.
Thank you for reading. Until next month!