The rapidly increasing level of M & A activity surrounding clean technology and renewable energy in 2011 looks set to continue into 2012, writes Simon Pringle, head of sustainability and climate change at BDO.

Established players from Europe and the USA are being joined by new investors from Korea, Singapore and China who are increasingly entering the market. So does this mean that the Clean Technology and Renewable Energy sector has finally come of age and is now a bona fide suitor attracting main stream investment?

Whilst businesses across all sectors have been working hard to navigate the global financial uncertainties, many have been doing so with an eye on the medium term risks and opportunities posed by some of the big issues we face on a global scale.

Issues such as depleting oil reserves, global population growth, constraints upon resource availability and increasing regulation around carbon and environmental impacts form a complex backdrop against which to make investment decisions. These points of focus, however, have led to the creation of new markets and demand for new products based upon an increasingly sophisticated dialogue with consumers and business buyers.

Issues which were seen as medium term some five years ago are beginning to hit profit and loss in the here and now. Corporate minds are being focussed by the risks and opportunities associated with commodity and energy prices, regulatory changes and corporate reputation. At the same time, a highly creative and innovative clean technology and renewable energy sector has begun to mature. Typically centred around hubs of innovation such as Cambridge and drawing in established technology giants from across existing industries, the new sector is working hard to provide ideas, technologies and products to satisfy the emerging demands of this new consumer and corporate hunger.

Of course, as with any sector characterised by innovation, change and entrepreneurial businesses, the road from initial concept to market success is a tough one.

The ability to access funding, to move from proof of concept to production reality, to protect intellectual property and create a strong, ‘backable’ management team are all essential for success. However, for those businesses that have managed to move from surviving to thriving, there has emerged an increasingly solid investment case. Investors with an eye to a good return are increasingly seeing the opportunities in acquisition and strategic market consolidation.

As a response to the innovation and changing patterns in organisational behaviour, there is an increasingly serious, mainstream approach to investment and M & A activity in technologies and applications that appear future proofed. Of course, there is an emphasis on those opportunities for which the fundamentals are strong. Like any sector, a low technology and regulatory risk combined with a strong commercial opportunity and good quality intellectual property command attention.

However, with the big global drivers increasingly mirrored by local regulation and corporate activity, there should be no surprise that there has been a dramatic increase in the amount of investment into opportunities that provide solutions for energy security, energy efficiency, demand side management and lower carbon, resource efficient innovation. So could 2012 finally be the year the fledgling but technology-rich Cambridge CleanTech Cluster comes of age and starts attracting grown up investment?

The convergence of a new demand led market and the centre of gravity created by the existing hubs of innovation around the university and science parks suggests exactly this potential. And of course, for the providers of support services including accountants, lawyers and technical advisers this is an exciting and welcome development in a challenging market.

• Simon Pringle is Head of Sustainability and Climate Change at BDO and can be contacted directly on This e-mail address is being protected from spambots. You need JavaScript enabled to view it