Luke Davis, CEO of IW Capital, discusses how private investment will help drive toward NetZero & why small firms are key

Business Insights

A new report has revealed that the UK's low carbon and green economy is now worth over £200 billion, with over 1.2 million people employed within the sector across some 75,000 businesses. The sector is now four times larger than the UK's manufacturing sector and is set to grow at an accelerating rate in the next few years.

There has been criticism recently of a lack of central government support or planning to achieve ambitious net-zero carbon emissions goals in time to slow or halt climate change. It comes as last week the Prime Minister and Chancellor called on private investors to unlock "hundreds of billions of pounds" worth of funds to fuel the UK's Covid recovery and green ambitions.

With the government eyeing private investment as a key driver in the fight against climate change, individual investors and institutions alike will play an important role in funding the innovators of the future. With this in mind, investment specialists IW Capital ( have commissioned national research to determine the sectors investors are looking to back, and whether UK investors are ready to support the drive to net-zero. The report found:

Key statistics:

  • 45% of UK investors are looking to back green or sustainable companies in the next year
  • 34% of UK investors are looking to invest in the Biotech, Meditech & Pharma industries in the next year
  • 29% of UK investors are looking to back online retail businesses in the next year
  • 26% of UK investors are looking invest in Fintech in the next year
  • 18% of UK investors are looking to invest into the creative industries in the next year
  • 16% of UK investors are looking to back businesses in the hospitality sector in the next year

The data indicates that sectors in green and sustainable fields are set to benefit from significant investment backing in the next year while firms in more scientific fields, who have enjoyed increased exposure over the last year and a half, are also set to benefit. It also suggests that hospitality and the creative industries, perhaps worst affected by the economic impacts of the pandemic, are firmly on the radar of UK investors.

Luke Davis, CEO of IW Capital discusses:

"Our research shows that unsurprisingly, but encouragingly, given the increasing concern and coverage around climate change, green and sustainable companies top the list for investor demand. We know private investment will be key to ensuring the innovative firms and entrepreneurs tackling issues around climate change can grow and scale effectively, therefore these figures stand as a benchmark for growth and ambition in the sector.

"Investment confidence is often a barometer for the future of the economy and wider business sentiment so it is great to see that private equity is putting its money where its mouth is in terms of backing UK firms in the green economy. This is a trend that has also been reflected in the desire of investors to support and invest in, small, private, growth companies. In our experience many firms are looking for growth, and the investors we work with are keen to back them in their goals after a tough year for businesses of all kinds.

"The following year or so will be crucial for UK economic growth and SMEs and entrepreneurs will be key to that given that they make up 99.9% of private sectors businesses and employ nearly 60% of the workforce. The investment community that backs these firms will, therefore, be equally important so it is hugely encouraging to see this optimism and activity."