Green Patents as Assets: Valuation and Financing Mechanisms for Clean-Tech Scale-Ups

Abstract. This study analyses the shift in industrial property law, particularly with regard to patents, which have gone from being instruments granting legal exclusivity to financial assets in the context of the clean tech economy. More than 15.2 million active patent families exist worldwide, 31.4% of which are associated with the UN's Sustainable Development Goals (SDGs). The 13th SDG, on climate action, generally ranks second after the 9th SDG by number of patents. Innovations under this SDG target the reduction of greenhouse gas emissions, and include decarbonisation technologies, improved energy efficiency and measures to mitigate global warming. Although patents offer protection for up to 20 years, there is a growing trend for them to be used as indicators of innovation capacity and to attract funding for sustainable development. This study reveals that patents play a significant role in measuring green innovation, yet are hardly ever leveraged to raise capital. As a matter of fact, less than 10% of funding granted to SMEs working in the field of green technologies uses patents as collateral. It is already difficult enough for banks to determine their value, as they are considered high risk, leading either to significant devaluation which ranges from 60 to 90% or disregarded altogether. Despite the emergence of new sustainable financing mechanisms such as green bonds and ESG funding, the role of patents remains poorly understood. Achieving this will require better alignment between innovation, finance, and environmental goals.