The Future of Climate Tech

Please Mind the (Emissions) Gap.

The Intergovernmental Panel on Climate Change (IPCC) warns that half the global population lives in areas highly vulnerable to climate change and the climate warming above 1.5°C will create irreversible damages that are a threat to human wellbeing.

49 countries - the top three of which account for over 50% of all global emissions - made commitments to reach net-zero emissions. These commitments benefit climate technology development as they incentivise governments to create policies to reduce greenhouse gas (GHG) emissions.  Twelve of the world’s major oil companies, including Shell and ExxonMobil, have set net-zero targets and agreed to fund emission-reducing technologies.

Despite countries and companies setting ambitious goals, our current policies put us on pace to hit 2.9°C of warming, which puts humans at risk of experiencing the severe events, such as marine ecosystem collapse and over 23 feet of sea level rise by 2100.

Get Hyped for Climate Tech.

Climate tech has matured significantly since the “cleantech 1.0” boom. Today, battery, wind and solar energy technologies have achieved scale to provide power at costs commensurate with fossil fuel energy. The advancement of these renewable energy technologies has laid the foundation for many climate tech innovations that require significant energy usage.

Climate tech is currently at an inflection point. Nearly all climate-related technologies existing today are positioned to achieve scale in the next 10 years.

Climate Tech on a Hot Streak.

Today, we are again seeing climate tech re-emerge, with VC fundraising increasing nearly 3x and investment increasing more than 5x between 2015 and 2021. VC investment in 2021 was 8x the last peak in 2008 of $7B.

Early-stage investments are dominated by climate tech-specific investors, whereas late-stage investments have a high level of participation from large, generalist investors such as Tiger Global and Temasek Holdings. 

Source: The Future of Climate Tech 2022