Climate Tech Goes Mainstream
Countries and corporations are taking action to mitigate significant damages from anthropogenic climate change. Over the last several years, 49 countries and 93 Fortune 500 companies have committed to net-zero emissions targets or carbon neutrality. Even corporations whose businesses revolve around fossil fuels, such as Exxon, Delta and GM, have made commitments to reach net-zero emissions. In order to achieve “net-zero,” new technologies need to be developed and scaled, including sustainable aviation fuels (SAFs), carbon capture and sequestration (CCUS) systems and “green” cement.
Opportunities abound for companies to help deliver climate goals. Entrepreneurs are diving in to develop climate tech solutions. Electric vehicle (EV) and alternative protein companies are early pacesetters. Notable exits include Tesla and Rivian in the EV space and Beyond Meat in the alternative protein sector. These successes speak to the potential of climate tech solutions to both heal the planet and create viable, lasting companies. Investors are recognizing the climate tech opportunity and doubling down on both fundraising and capital deployment. US venture capital investment in climate tech companies increased 80% between 2020 and 2021, reaching $56B. The energy and power sector experienced the fastest growth, increasing 180% year-over-year. Non-traditional climate tech investors are quickly exerting dominance; Alumni Ventures, Insight Partners and Tiger Global are among the most active. A cautionary note: the climate tech sector does not come without its challenges. Timelines for companies to scale are typically longer, talent is in short supply, infrastructure is lagging plus inflation and supply-chain pressures are increasing the cost of operations.
Kelly Belcher Managing Director, Climate Technology and Sustainability
