Space exploration has been the root of many scientific breakthroughs in the last 70 years. And, as we aim for longer and more distant spaceflights, there are hopes that learning how to live in space could help humanity solve some of the challenges of living on a climate-changed Earth. But there are drawbacks as well as potential in the sustainability of space travel.
Space exploration is a hot topic for wealthy individuals – just look at Jeff Bezos, Elon Musk and Richard Branson. They believe that space is within our grasp, whether for tourism or as a possible escape route for humanity when the going gets tough here on Earth. For those with their feet a little more firmly on the ground, space exploration itself may not be the answer. But the scientific breakthroughs that accompany our efforts to travel further and further into space may well provide groundbreaking solutions to problems here on Earth.
“I think often, such successful people have come from an area where they’ve been on the forefront. So they've pioneered a technology or a model or a business model and they're looking for something else that they think is the next big thing. Space, as an investment, is starting to see a coming of age in a sense, driven by the need for state of the art communications, and perhaps our renewed sense of how small our planet actually is,” says Jonathan Sparks, Chief Investment Officer of UK & CI Private Banking and Wealth at HSBC.
What surviving in space can teach us about life on Earth
The idea that space exploration yields positive scientific breakthroughs has been well-proven over the decades since the Moon landing. Studies on astronauts who have lived on the International Space Station, for example, have greatly contributed to knowledge about muscle atrophy and bone loss, helping those with conditions like osteoporosis back home1. Space travel has also pushed many innovations in the materials world2 Scratch-resistant lenses for glasses were developed after NASA’s Lewis Research Center attempted to develop diamond-hard coatings for aerospace systems. Most home insulation today uses the aluminised polyester, Radiant Barrier, first developed by NASA. And foil blankets, used on Earth in extreme temperatures, evolved from a lightweight insulator NASA developed to protect people and spacecraft in space.
Current long-term ambitions for space agencies and companies involve going further into the Solar System and potentially even living for periods of time on Mars or the Moon, which is driving the science in a specific direction – towards sustainable living.
If there is to be any hope of surviving for long periods of time in space, scientists need to develop closed-loop life-support systems – essentially systems that carefully handle all resources and minimise waste. We already use advanced filtration and purification systems for water that were built from technology developed for the space station, where astronauts recycle 93% of their water3. NASA and Florikan have also created a special controlled-release fertiliser, which is coated in polymers that control when and how much of each ingredient is released over six months to a year4. The innovation was perfect for growing food in space, but also helps farmers on Earth to use, and waste, far less fertiliser.
High risk, high entry and high growth investment
Sparks points out that the barrier to investment in space exploration itself is extremely high, because the expense is so great, but the potential for investment growth is also extremely high. Investing in the science that comes from space exploration is more accessible, and offers potential for growth, as well as the added value of contributing to sustainability.
However, it’s also high risk. A number of years ago, there was a lot of talk about making money by mining deep space asteroids for the minerals, metals, water and other valuable materials that are running out on Earth. Planetary Resources was launched in 2012 with just this goal and quickly raised around USD50 million, including from big name investors like Google’s Eric Schmidt. Deep Space Industries came along a year later and raised about USD15 million in venture capital. But both firms faced criticisim from scientists pondering whether cost-effective asteroid mining could even be done. How could these companies compete with Earthbound mining firms, given their huge extra costs? By 2019, both companies had been acquired by other companies, and their space mining goals appeared to be on permanent hiatus5.
Is space really green?
There are also questions around the sustainability of space travel. While it’s certainly true that the scientific research into closed-loop systems, reusing resources and eliminating waste could be beneficial, the resource costs in metals and fossil fuels to launch spacecraft into space is huge. There’s also the small matter of the tonnes of space debris left in orbit around the planet; discarded stages of rockets and defunct satellites that are cluttering up our skies6. Not only is this wasteful, but these thousands of pieces of space junk are travelling at extremely high speeds, posing a real threat to subsequent spacecraft and satellites.
An impact-led investor may need to think twice about putting funds into current ’space’ firms and ETFs. The majority of these companies are communications firms, whose actual link to space is that they may launch or contract satellites. Or they’re companies who are active in both space travel and defence operations, the latter of which may not appeal to impact investors.
“The investable universe right now is a lot of communications companies, satellite firms, and organisations in the defence sector. As an investor, you might see an ETF that’s aligned around space and innovation, but you may have to dig further to see what sorts of companies can come under that umbrella. The direct exposure to space exploration is quite small and a lot of it is still held privately,” says Sparks. “More than in any other theme we’ve come across, space is a difficult industry to invest in passively.”
Space is being held up by some as a visionary investment, a high-risk, high-growth endeavour that may also inadvertently end up saving humanity. But aside from investing millions actually starting a space company, those that want to invest may need to look at the science that’s one step removed from the exploration itself, particularly if they’re viewing these investments through a sustainability lens. Rather than investing in blasting rockets into space, impact investors may prefer to invest in the technologies that come from off-planet exploration – the water and waste management, agricultural advances and medical breakthroughs that are based on technologies developed for space.
Space, as an investment, is starting to see a coming of age in a sense, driven by the need for state of the art communications, and perhaps our renewed sense of how small our planet actually is - Jonathan Sparks, Chief Investment Officer of UK & CI