Climate change is the most pressing issue facing our species, and it is abundantly clear that we need innovative solutions to combat it. That’s where climate tech comes in.
Thankfully, reducing carbon emissions and mitigating the effects of climate change are FINALLY becoming hot in venture capital (pun intended 🙂
So much so, that we believe climate tech will outperform all other sectors in the next 25 years.
Why? Let’s take a closer look at the state of climate tech and the trends driving its growth.
- The need for climate solutions is undeniable. The world is on track for an increase of 3.2 degrees Celsius by the end of the century – which would have catastrophic consequences.
To avoid this, we need to DRASTICALLY reduce our carbon emissions and transition to a low-carbon economy – ie. investing in tech that can generate energy more efficiently, electrify transportation and sequester carbon from the atmosphere.
- The economics of climate tech are rapidly improving. Renewable energy costs have plummeted in recent years, making wind and solar cheaper than fossil fuels in most of the world.
Add that EVs are becoming increasingly cost-competitive and carbon capture is gradually becoming more efficient and that spells a major flipping point sometime in the future.
- There is growing political and social pressure to address climate change. Governments around the world are setting ambitious emissions reduction targets, and investors are increasingly looking for ways to align their portfolios with these goals. This creates a powerful tailwind for climate tech companies, as they are well-positioned to benefit from this shift in sentiment.
(Assuming people ACTUALLY put their money where their mouth is…)
- There is a massive addressable market for climate tech. The global energy market alone is worth trillions and there are countless other sectors that could benefit from low-carbon tech.
Add that all up and these trends suggest that climate investing is poised for a boom in the coming years.
So, what are some of the most promising areas for climate tech investment? Here are just a few:
Of course, it’s risky – it’s called “venture capital” for a reason.
But, well, as the great rapper T.I. said, “Their back’s against the wall, they just start shooting…”
It sure looks like humanity’s back is against the wall, but at least we’re finally fighting back 🙂
That’s our thesis here at 4WARD.VC and with our Partner in Clime Climate Accelerator (Want to know more about our investment criteria and focus? See this post)
What do you think? Will climate tech crush the rest of the market? Where are you placing your bets for the next 5, 10, 25 years…?
Do you invest in climate tech as well? We’re happy to help.
Check out the following resources:
- Our climate tech deal share list for VCs
- Our climate tech deal share list for family offices & LPs
- Our climate tech investor syndicate
And if you’re interested in more info on 4WARD.VC and our disruptive accelerator model, be sure to reach out
IMPORTANT PS. Did you know this post was written largely by ChatGPT and then edited and improved by yours truly 🙂
How are you using AI in your business and how will AI radically transform the fight against climate change?
Would love to hear your opinions, thoughts and strategies in the comments below.