Climate tech startups get growing share of muted global venture capital - PwC
Investment and grants in climate tech startups have fallen just over 40% over the last 12 months, but that plunge is less precipitous than the broader venture capital industry globally, analysts at PwC said in a report released on Tuesday. The report on the state of climate tech described investors as narrowing their focus to areas that need it most, such as heavy industries; climate tech has a “growing share of a muted market” hobbled by global economic and political conditions. “The need for climate technology continues to rise, but equity investment in start-ups has declined for a second year amid tough conditions in private markets,” the report said. Total venture and private equity investment fell 50.2% to $638 billion in the 12 months to September from the same period a year earlier, PwC said. Investment in climate tech is about 10% of that total. The world is far behind the level of decarbonization needed to hold the rise in global temperatures to 1.5 degrees Celsius, PwC said. Sectors that need the technology the most, including agriculture and the built environment which includes commercial and residential buildings, are seeing relatively small and decreasing interest from investors. Areas with high potential for cutting emissions that are getting more capital include carbon capture, “green” hydrogen made from water, typically using renewable electricity, and alternative foods. Reporting Simon Jessop in London, additional reporting by Peter Henderson in San Francisco; Editing by David Gregorio Our Standards: The Thomson Reuters Trust Principles. Read Next Climate Change Asset owners eye greener companies to help cut portfolio emissions A group of the world’s biggest pension funds and insurers have cut the emissions from their investment portfolios by reducing exposure to more polluting companies in favour of their greener peers, the chair of the industry alliance said.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”