Climate change is real and there is a growing awareness among the population to try to mitigate any negative ramifications these changes will have. New, innovative solutions are constantly being introduced to offset the impact of everyday activities, and some are going to be able to help in more ways than others. As a whole, climate change is turning into big business and investors are taking notice. According to Modern Diplomacy, citing a study conducted by accounting giant PriceWaterhouseCoopers (PwC), investments being made into climate innovation far outpace those of venture capital (VC) market rate, now reaching five times the amount targeting the latter. 

From 2013-2019, a total of $60 billion was injected into companies working on netzero emissions solutions. That first year, $418 million had been destined to climate tech, while $16.3 billion was contributed last year. Almost half of the total investment money went to companies and startups operating out of the U.S. and Canada, while $20 billion went to Chinese companies. The European market only captured $7 billion. 

In terms of overall investments, VC only accounts for 6% of all money that is given to finance new projects. Environmental tech is grabbing a larger portion of that pie, primarily, due to the provability and scalability of the solutions presented, and their ability to effectively reduce carbon use, or to erase it completely. By way of comparison, the environmental tech investment segment is growing three times faster than the artificial intelligence (AI) segment.

Explains PwC U.K.’s Celine Herweijer, the company’s global leader of Innovation and Sustainability, “The analysis shows the urgency of the opportunity, and gap to close, to support and scale innovative technologies and business models to address the climate crisis. Climate tech is a new frontier in venture investing for the 2020s.”