Investment in climate technology soared this year: PricewaterhouseCoopers

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On August 13, 2021, tourists walk at the bottom of the melting Svinafellsjokull glacier as the ice falling from the glacier floats in a melting lake near Svinafell, Iceland.

Sean Gallup | Getty Images

According to the latest research published by PricewaterhouseCoopers on Wednesday, in the year ended June 30, investment in companies developing technologies to deal with the climate crisis increased to 87.5 billion U.S. dollars.

The financial services company stated in its PricewaterhouseCoopers “State of Climate Technology 2021” report that this is an increase of 210% from the US$24.8 billion invested in climate technology in the same period last year, adding 14 cents to climate technology.

But PricewaterhouseCoopers said that venture capital and private equity firms do not necessarily support the right climate technology companies.

The company focuses on what it says is five leading technological solutions: solar energy, wind energy, food waste technology, green hydrogen production and alternative food/low-greenhouse gas protein. It stated that although technologies in these areas accounted for more than 80% of the emission reduction potential by 2050, between 2013 and June 2021, these five companies received only 25% of their investment in climate technology.

PricewaterhouseCoopers stated that most of the funding for climate technology (approximately $58 billion) goes to mobile and transportation companies. This includes companies that focus on electric scooters, electric cars, and flying taxis.

PricewaterhouseCoopers stated that the average size of climate technology deals almost quadrupled in the first half of 2021, reaching 96 million U.S. dollars, up from 27 million U.S. dollars a year ago, adding that the number of active climate technology investors has increased from The number of employees in the first half of the year was less than 900, which increased from 2020 to more than 1,600 in the first half of 2021.

Climate Technology SPAC (Special Purpose Acquisition Company) raised $25 billion in the first half of 2021, accounting for more than one-third of all climate technology funding during the same period.

PricewaterhouseCoopers stated that although overall growth is rising, the number of early, seed and A-series investments in climate technology has basically stagnated since 2018, adding that it needs to provide more potential for young climate technology Start-ups provide funding. Companies valued at US$1 billion or even US$10 billion.

On Tuesday, French climate technology startup Sweep announced that it has raised US$22 million in Series A financing, led by Balderton Capital, a London-based venture capital firm that also supports city navigation applications Citymapper, electric Scooter company Voi and on-demand car service Virtuo.

Geographically, American climate technology companies have attracted the most venture capital funding. In the year ended June 30, the country’s start-ups received US$56.5 billion in funding. According to PricewaterhouseCoopers, the funds raised by China’s climate technology companies rank second with US$9 billion.

If we hope to achieve net zero emissions by 2050, the world has 10 years to reduce global greenhouse gas emissions by half.

“Innovation is essential to meet the challenge, and the good news is that investment in climate technology has increased significantly across the board,” said Emma Cox, head of global climate at PricewaterhouseCoopers in the UK, in a statement.

“However, our research has found that there is the potential to better guide and incentivize investment in technology fields that have the greatest potential for emission reduction in the future. This raises the question of why these industries will miss the opportunity-whether investors have missed a value Opportunities, or are there incentive issues that require policy makers’ attention?”

For decades, many investors chose not to support climate technology startups because they feared that they might not be able to provide suitable financial returns. PricewaterhouseCoopers stated that there was a period of rapid growth between 2013 and 2018, but investment in climate technology stabilized between 2018 and 2020, and attributed the slowdown to macroeconomic trends and the global pandemic.

However, with environmental, social and corporate governance (ESG) becoming the focus of attention and the company’s commitment to a net-zero strategy, investment rebounded sharply in the first half of 2021.


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