Climate Investing: What Is It?
ClimateAngels | May 02, 2022
What is Climate Investing? Everything you need to know
Climate investing doesn’t involve investing in non-profit ventures or just investing in organizations that deliver or manufacture environmentally conscious products.
It means investing in any company that proactively removes or reduces green house gas (GHG) emissions.
The difference between impact, ESG, and Climate Tech Startup
It stems from the problems the startups invested in intend to solve:
- A Climate Tech Startup is a company that employs technologies to reduce GHG emissions or tackles the drastic impacts of climate change
- An Impact startup refers to a company whose business model aligns with one or more of the United Nations Sustainable Development Goals (UNSDGs).
- Impact and Climate Tech startups can be placed within the broader framework of Environmental, Social and Governance (ESG) which were designed to reduce the harmful impact of businesses.
Will it fail like CleanTech 1.0? It makes economic sense.
Climate Change can lead to natural calamities which are detrimental to businesses and governments alike, investing in climate tech can help undo the effects of climate change and ensure that we are better prepared.
India could gain $11 trillion in economic value – by limiting rising global temperatures and exporting the climate solutions to the rest of the world.
Currently, India ranks 7th on the global climate change crisis index & stands to lose 35 trillion USD in the next 5 years if climate change is left unchecked. This is a roadblock to the economy that is expected to grow to 5 trillion USD in the next few years.
Support from governments & Conglomerates for Climate Tech
As ambitious net-zero targets are announced the viability and applications of ClimateTech increase manifold.
Consumer consciousness
As consumers become increasingly aware of the implications of Climate Change their choices evolve, nearly a third of consumers across the world are willing to invest in sustainable products.
Technical developments
CleanTech 1.0 had one major inherent flaw, it was not cost-competitive with the fossil fuel industry, solar and wind energy today are not just cost competitive but, in some cases, cost-effective too, owed largely to the technical developments in the last decade.
Climate Tech sector is the Fastest to get Unicorn Status
Young climate tech companies are accelerating to unicorns faster than ever before.
Globally on average, startups achieve unicorn status in 7 years. However, Climate Tech unicorns are the fastest in the herd of startups achieving unicorn status in 2021.
Of the Climate Tech unicorn in 2021:
- 40% achieved unicorn status within 4 years or less
- 60% achieved unicorn status within 4 & 7 years
- None were more than 7 years old
Diversification of Climate Tech
CleanTech 1.0 largely focused on clean energy which at the time was not scalable due to economic and technical constraints.
Climate Tech today focuses on a wide arena of issues from #electricmobility to carbon offsetting and sequestration, it has a myriad of applications and a far wider demand.
This tech space focuses not just on decarbonizing energy but also on decarbonizing mobility, agriculture, construction, industries, and everything else under the sun that is carbon intensive.
Climate Tech: Stage of Development
Climate tech has matured significantly since the “cleantech 1.0” boom.
Silicon Valley Bank:
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 is indeed the investment opportunity of the decade
If you don’t want to miss out on this revolution, join Climate Angels, to invest in India’s leading pollution reduction and Climate Tech companies.
For Climate Investing help, get in touch with us or visit: www.climateangels.in
More Insights Into Climate Change Tech and Investing
- What Are The Top 10 Climate Tech Startups Of 2023?
- Reasons why Climate Tech is thriving despite general market slowdown
- Climate Tech Outlook 2023
- How Climate Tech is different from Clean Tech
- 2022 – Climate Tech time capsule
- Why Climate Tech innovation is important?
- Why Industries need Climate Solutions?
- India & Climate Tech
- Making Finance More Accessible To Climate Technology In India – How To Achieve It?
- Why Climate Tech?
- Climate Tech investment landscape 2022
- Climate Tech trends
- Venture Capital Investment in Climate Tech has tripled in the last year
- Investments in climate tech startups are assuring positive climate change
- How investing in green tech can lead to a sustainable future
- India ranks among world’s top 10 countries for climate tech investment
Reference
1. https://www.moneycontrol.com/news/opinion/is-the-climate-tech-opportunity-real-this-time-around-8322641.html
2. https://www.forbes.com/sites/robtoews/2021/10/31/will-this-generation-of-climate-tech-be-different/?sh=846d2724a62e
3. https://www.svb.com/trends-insights/reports/future-of-climate-tech
4. https://www.holoniq.com/climatetech-unicorns/
5. https://climatetechvc.co/%F0%9F%8C%8D-climate-unicorns-take-charge-89/