FRONTIER ENERGY NETWORK MEMBER PR
Arguably the greatest innovation challenge humankind has ever faced is staring us in the face: the world has ten years to halve global greenhouse gas emissions until 2050 to reach net zero. We saw in The State of Climate Tech 2020 report how the climate tech solutions critical to enable this transformation are attracting growing investor interest.
PwC’s analysis this year explores how investors are securing both climate impact and commercial returns from this emerging asset class, helping keep the Paris Agreement’s goal of limiting global warming to below 1.5 degrees Celsius within reach.
A hot year for the climate, creating new urgency for a green recovery
The last year has seen a transformation in the venture capital landscape. New types of capital and funding mechanisms have resulted in significant new flows of investment into private markets. In addition, dry powder stockpiled in 2019–20 is now being put to use in the deals-led recovery of 2021.
The investment landscape for climate tech is no different, as society increasingly feels the impacts of climate change. The latest Intergovernmental Panel on Climate Change (IPCC) report, published in August 2021, amplified the calls for drastic action. COP26 has echoed this, and, significantly, the Glasgow Breakthroughs announcement states a plan for countries and businesses to work closely together to speed up affordable clean tech adoption worldwide.
This sharper focus on ESG in private markets, alongside emerging regulations such as European Union’s Sustainable Finance Disclosure Regulation (SFDR), is driving growth and leading many companies and investors to alter their strategies. Thousands of companies have made public commitments to net zero, set science-based targets, or sought to demonstrate their wider commitments to society through B Corp status. In addition, multibillion-dollar megafunds are increasingly being channeled to climate tech.
invested in climate tech between 2013 and H1 2021
growth in investment year-on-year
invested in climate tech in H2 2020 and H1 2021
Climate tech startups identified
Climate tech investing