Gina Domanig: The Visionary Behind Europe's Cleantech Investments

Gina Domanig, the founder and Managing Partner of Emerald Technology Ventures, established the first independent cleantech venture capital fund in Europe in 2000. With over 30 years of international business experience, including banking, M&A, strategic development, and venture capital, she is recognized as the most successful cleantech investor in Switzerland. We talked with her about how cleantech as industrial technology can positively impact the ecological footprint of various sectors. She emphasizes the importance of regulations in driving innovation and the role of startups in achieving sustainability goals.

Gina Domanig is the founder, CEO, and Managing Partner of Emerald Technology Ventures. In 2000 she founded the business as the first independent cleantech venture capital fund in Europe. Featured in Forbes 50 over 50, Gina has over 30 years of international business experience including banking, M&A, strategic development, and venture capital. She is considered the most experienced and successful cleantech investor in Switzerland.

The Sustainable Asset Management Group (SAM) was a pioneer of sustainable investing in Switzerland. When it was sold to a Dutch asset manager, Gina Domanig and her team carried out a management buy-out with the VC division. Since then, the company has set up its own funds and is currently invested in 39 startups, the vast majority of which are in the cleantech sector. As of today, Emerald Technology Ventures manages and administers CHF 900 million.

Ms Domanig, how do you define cleantech?
I talk about it as industrial technology that has a positive impact on the ecological footprint of one or more sectors.

You have been in the ‘green’ technology business for more than 20 years. What has changed during this time?
In the period after the turn of the century, much was driven by the personal convictions of individuals. And we have, to be honest, not much has been achieved. Global CO2 emissions – to take one indicator – are still rising and will reach a new record level this year.

                 
In Switzerland and Europe, CO2 emissions are falling. How do you explain this?
That is exactly the point! We have countries here that actively intervene and set specific targets for industry. Wherever the regulator intervenes – with thresholds for consumption and emissions – we see progress. In France, for example, energy suppliers are obliged to meet savings targets set by the government for private and commercial customers. Or Norway, where all new cars must be emission-free from 2025.

Regulations are a nuisance from a business perspective...
Of course they are! Established companies do not like regulation and from their point of view this is completely rational: they have invested millions or even billions of francs, depending on the size of the company, in their core business over years or decades. This investment needs to be protected. May I give you an example?

Please do.
Perfluorinated and polyfluorinated alkyl substances (PFAS) are widely used in industry; for example, rainjacket coating, non-stick pans and pots, lubricants in metal processing, sealing materials in the food industry and semiconductor production. The problem is that the extremely resistant PFAS can accumulate in organisms and are suspected of being harmful to health. The EU wants to ban them and industry is up in arms. The argument is that PFAS are irreplaceable. But the truth is that I can name 10 startups off the top of my head that would be able to replace PFAS tomorrow.

Regulation as startup and growth aid for new companies. Would you go that far?
I call this innovation under pressure. It is a very efficient method, and incidentally, is not always met with rejection within companies. Creative managers are grateful when the state sets rules on sustainability. It gives them the opportunity to make a difference that will also benefit shareholders in the long term.

What is the significance of the voluntary commitments to sustainability made by more and more large companies?
The question is whether these voluntary climate and sustainability goals are really implemented in everyday life. Nevertheless, voluntary commitments are important because they create the necessary awareness in companies for open innovation – the dominant theme when it comes to cleantech. This is because well-established value chains in traditional industries can be broken up and sustainably reorganised only with the involvement of external sources of expertise. This is where startups come into play: they are the ideal partners in this process.

"Creative managers are grateful when the state sets the rules when it comes to sustainability. It gives them the opportunity to make a difference that will benefit shareholders in the long run."

What can a VC such as Emerald do to make it easier for large companies to collaborate with startups?
Certainly, one option is to provide support for the entire investment process, from the evaluation of the startup to the exit. We have been offering such a service for five years and manage, for example, the corporate venture capital activities of the packaging group SIG.                                                                          

In recent years, Swiss voters have decided on two proposals with a direct impact on the cleantech sector. In 2021, the revised CO2 Act was narrowly rejected, while this year the federal act on a secure electricity supply was approved by a clear majority. Your comment?
The rejection of the CO2 Act meant that incentive taxes on fossil fuels were taken off the table for the time being. I very much regret this, as a controlled increase in the price of fuel and heating products would have triggered a surge in innovation.

The New Electricity Act focuses on the production of energy rather than consumption. It promotes the expansion of renewable energies. Do you think this is a viable approach?
Subsidies can stimulate innovation. Take battery technology, for example. Several countries – unfortunately, Switzerland is not one of them – are investing in battery production in the hope that startup funding will lead to mass production and ultimately to a fall in unit prices.
 

"A controlled increase in fuel and heating fuel prices would have triggered a surge in innovation."                              

A national innovation fund has been under discussion in Switzerland for years. One of the two main topics is the decarbonization of the economy. Are any countries one step ahead of us?
As a member of the Advisory Board of the state-run Innovation Fund Denmark, I know that the Scandinavian countries, in particular, are planning investments in their cleantech sector. We really must be careful not to fall behind in this area.

An Emerald employee heads the Technology Fund, a federal climate policy instrument created in 2010. How does it work?
The Technology Fund provides loan guarantees to startups and SMEs in the cleantech sector, whereby 40% of the funded project must be financed from other sources. The fund currently guarantees a loan volume of CHF 262 million to 135 companies and has established itself as an important driver of the Swiss cleantech sector.

Basic research in Switzerland is world-class and the regulatory environment is gradually improving. What do Swiss cleantech startups need in order to better exploit this potential?
I would like to see more managers aged between 40 and 50 establish a cleantech startup or take on responsibility in a startup. Experienced people think in terms of demand, they know what their sector needs and they have the necessary contacts. Which brings us back to the starting point. Cleantech is not a bundle of technologies that can be rolled out on a greenfield site. Cleantech is an attempt to put our way of life on a sustainable footing. There is hardly a value chain that is not affected by it. That’s why it will work only if large companies, their small and large suppliers, and the innovation ecosystem work together.

This article was first published in the TOP 100 Swiss Startup Magazine 2024.