Climate Technology Finance

People don’t pay for green. Full stop. We see many #climatetech startups marketing their products in this order: 1️⃣ Sustainability - the products are green and have low carbon intensity. 2️⃣ Resilient supply chain - the sourcing of the product is done in a more resilient and reliable way. 3️⃣ Performance - the product is (or nearly is) a drop-in solution. 4️⃣ Price - there is currently a “green premium,” but it will decrease as we scale. Yet, time and again, these companies, especially those selling commodities, experience pushback from an industry unwilling to buy these goods and narratives. The reason is that the industry has the exact opposite set of priorities: 1️⃣ Price - in a high-interest environment where margins are eroded and many businesses face fierce competition (e.g., from China), price parity is the top priority. Even a few cents per kW/h or gallon can make a difference. I recently learned of a battery startup whose raw materials alone cost more than the fully assembled battery of a Chinese competitor. No one will pay that premium. 2️⃣ Performance - many new solutions promise technical performance improvements, but most are not packaged to qualify for all customer requirements and have little evidence to prove long-term benefits. In mega projects, durability is almost always more important than unproven superior performance. Sunfire is flourishing because of their Alkaline cells, not their SoX full cells. 3️⃣ Resilience - following the pandemic and the scarcity of raw materials, this is indeed a growing concern for both industry and governments. 4️⃣ Sustainability - if a product can address all the above topics and also be green, the industry will be happy to adopt it. What does this mean? Startups need to take a market-centric rather than a tech-centric approach. They should develop their go-to-market strategy from day 1 to prioritise customers whose needs align most with their story, and design their entire product and value proposition around those customers requirements. For example, a raw material startup shouldn’t target the battery industry where price and quality are crucial. Instead, they might find success selling to the cement industry, where quality is less critical, and there’s a whole new value proposition around cirularity and sustainability. #venturecapital #fundraising #productmarketfit

Around three years ago, I read an article that genuinely shocked me. The argument was simple: As the planet warms, billions of people in hot countries will need cooling to survive. Air conditioning is one of the most greenhouse-gas-intensive technologies we have. The cooling demand of India alone, met with today's vapour-compression systems and refrigerant gases, could push warming past tipping points and make large parts of the world uninhabitable. A self-reinforcing loop. The hotter it gets, the more we cool. The more we cool, the hotter it gets. 🌡️ 🔄 I have not stopped thinking about that article since. Heating and cooling already account for around 15% of global CO2 emissions. Cooling alone exceeded 4 Gt of CO2e in 2022, and demand is expected to triple by 2050. 📈 Data centres in Europe already spend roughly 37% of their energy just on cooling. And the underlying technology, vapour compression, is essentially 200 years old. This is exactly why we at World Fund led Barocal's $10M Seed round. Built on more than 15 years of research at the University of Cambridge by Prof. Xavier Moya, the leading scientific mind in caloric materials, Barocal has cracked something the field has been pursuing for decades: a solid-state cooling and heating platform that rivals vapour-based incumbents on cost. No refrigerant gases. Significantly lower emissions. A real path to scale. The market is around $450bn today and projected to reach $577bn by 2033. The team is exceptional. The timing is right. 🎉 For Europe, this is more than a climate story. It is energy security. Less dependence on imported gases. More efficient cooling for the data centres our economy now runs on. A European deeptech champion taking a centuries-old industry into its next chapter. Proud to partner with Breakthrough Energy Discovery, IP Group plc and Cambridge Enterprise Ventures on this round. And huge thanks to Daria Saharova, Dr.-Ing. Mark Windeknecht and Robin Neff for the work that got us here. 👏 👇 Link to the TechCrunch story in the comments.

Blackrock just took a big write-down on its Global Renewable Power Fund III. Because of two ill-fated investments in Northvolt and SolarZero. Surprisingly, a $4.8 billion fund saw its internal rate of return plummet due to just two portfolio companies faltering. This fund was BlackRock's third flagship GRP fund, part of its bet on the energy transition and a push towards renewable energy and infrastructure. Many of the funds’s assets are early-stage climate infrastructure investments in: EV charging, renewable generation, and power storage and transmission. Are they simply making bad investments or is this a prequel to what to expect? What this tells me about climate tech investing: 1. The significant impact of two companies on a $4.8 billion fund suggests that traditional risk models needs reevaluation. The conventional playbook for diversification doesn't quite work in climate tech. When companies in your portfolio are all betting on similar technological advances or regulatory shifts, they tend to sink or swim together. Traditional risk models might be missing these hidden correlations. 2. The Northvolt situation is a wake-up call - throwing money at climate tech isn't enough. These companies need investors who roll up their sleeves and get involved. We're seeing a shift from passive to active investing, where deep operational expertise is just as crucial as the capital itself. 3. SolarZero, a major player in New Zealand Energy Sector, was far from an early-stage startup when BlackRock acquired it in 2022. Despite its 50-year history , something went wrong. It hints at a broader challenge: global funds rushing into new markets might be overlooking local market dynamics and regional complexities in their eagerness to deploy capital in the renewable space. As this sector matures, we need a new framework for resilient investment strategies that can better weather the failures of individual companies while capitalizing on the overall growth trend in clean energy. #climatetech #VC #investment #newbook #fundclimatetech #blackrock Link for the news in the comments.

What's going to close the $7 trillion gap in climate finance? One of my favorite reports each year from Climate Policy Initiative has some ideas for scaling the investments needed to align with a net-zero pathway. To my mind, this is the best report each year on the state of climate finance. It shows you: -Where financial flows are going from (across public and private sources) -Where money is going to (in industry, location, and activity) -What our estimated needs are across sectors and regions -The mitigation potential to unlock across sectors -Strategies for scaling both public and private investment. Here's a look at the sector gaps we are seeing to date and how they can be overcome. Energy systems- need a 2.5-fold increase in mitigation finance to align with average 2024 to 2030 needs. This sector has the highest emissions reduction potential, requiring investment in renewables, grid modernization, and storage solutions. Transport- also requires an almost 2.5-fold increase in mitigation finance, alongside a significant shift away from high-carbon investments. With a mitigation potential of 3.2 GtCO2e, priorities include electric mobility, public transport expansion, and freight decarbonization. Buildings and infrastructure- mitigation finance must rise nearly 4-fold. This is sector is generally climate-aligned, but further investment can realize its 3.2 GtCO2e mitigation potential. Focus areas include efficiency upgrades, sustainable construction, and low-carbon heating and cooling. Industry- a nearly 24-fold mitigation finance increase, along with reallocation from high-carbon activities, is needed to tap the sector's 4.4 GtCO2e abatement potential. Key areas include clean hydrogen, low-emission manufacturing of cement, steel, and ammonia, and carbon capture, and storage. AFOLU- holds great untapped emissions reduction opportunities—mitigation flows should increase 64-fold from USD 18 billion to USD 1,170 billion annually through 2030 to realize this potential. There is also a need to improve definitional boundaries and enhance tracking of finance flows to this sector. Check out the full report here along with the data and dozens of interactive charts: https://lnkd.in/esqBmpfe #climatefinance #climateinvestment #netzero #decarbonization #climatepolicy #climateaction #emissions

In 2025, sustainability won't sell itself. "Doing the right thing" won't get your project funded. If you're leading strategy, pitching a new line item, or defending impact budget you need a business case that speaks the language of finance, ops, and leadership. Here’s your cheat sheet. 6 proven angles to justify sustainability and real-world proof points to back them up: 💸 1. Cost Savings → Energy efficiency: Vodafone UK & Ericsson cut 5G power use by up to 33% at London sites. → Circularity: Patagonia’s Worn Wear turns repair into a revenue-positive loyalty loop. 📈 2. Revenue Growth → Trust drives sales: Compare Ethics' AI platform boosted brand revenue up to 1% through verified green claims. → Purpose = market share: Despite logo fatigue (only 4% of Brits trust them), verified sustainability builds buyer confidence. 🛡 3. Risk Reduction → Avoid fines and fallout: Align early with CSRD, ESPR, and rising global disclosure rules. → Resilience strategy: Mitigate supply chain and reputational risk before it escalates. 💡 4. Innovation Driver → Tech unlocks impact: Lufthansa, with SAP & McKinsey, cut costs and carbon by digitising spend and emissions data. → Efficiency gains: AI and automation create faster, smarter pathways to sustainability. 🤝 5. Customer & Talent Retention → Hiring edge: 1 in 10 job seekers prioritises sustainability in job descriptions. → Buyer behavior: 73% of EU consumers say environmental impact influences their purchases. 🌍 6. Capital Access → Investor alignment: 90% of global individual investors (per Morgan Stanley) want sustainability in their portfolios. Bottom line: Sustainability in 2025 isn’t a nice-to-have. It’s a performance driver and your business case needs to reflect that. 🔗 Want the high-res PDF + source links in your DM? ♻️ Reshare this post to help more teams build better business cases. 👤 Follow Abbie Morris

The COP29 Azerbaijan and COP30 Brazil today unveiled the Baku to Belém Roadmap — a blueprint to mobilize at least US$1.3 trillion a year in climate finance for developing countries by 2035. Presidents Mukhtar Babayev and André Corrêa do Lago emphasize that this target is within reach — but will require significant effort from traditional sources as well as the development of new and innovative financial mechanisms. The Roadmap lays out five priority areas with a vision to 2035, each supported by focused action points: 1. Replenishing grants, concessional finance, and low-cost capital 2. Rebalancing fiscal space and debt sustainability 3. Rechanneling transformative private finance and affordable cost of capital 4. Revamping capacity and coordination for scaled climate portfolios 5. Reshaping systems and structures for equitable capital flows To kickstart implementation, the Presidencies propose practical early actions — improving data, driving reform debates, and strengthening transparency and collaboration. These steps will help build momentum, shape priorities, and demonstrate what is possible. The resources exist. The science is clear. The moral imperative is undeniable. What remains is the resolve — to make this the decade where ambition becomes action and humanity’s response finally meets the scale of its responsibility. Read the full report here: https://lnkd.in/dqA6CqND

#Adaptation is an investment in our future In 2024 alone, the world faced 58 climate disasters, each causing over $1 billion in damages. Yet the adaptation finance gap remains as high as $359 billion per year. Every dollar we fail to invest leaves communities and economies vulnerable to escalating risks. New research by World Resources Institute shows that $1 invested in adaptation can yield $10.50 in benefits over 10 years. These gains go far beyond avoided losses, they include better health, stronger economies, and restored ecosystems. At the World Meteorological Organization, we see this every day. From strengthening early warning systems under the “Early Warnings for All” #EW4ALL initiative, to delivering climate services for critical sectors like #agriculture, #energy, #water and #health, our work helps countries turn science into resilience. Adaptation is embedded in our mission because good adaptation is good development. 💡 Adaptation delivers a triple dividend: ✔ Avoided losses from climate impacts ✔ Economic growth and jobs ✔ Social and environmental benefits The bottom line? Investing in adaptation is one of the smartest economic decisions we can make. 📢 It’s time for governments, development partners, and the private sector to close the adaptation finance gap. The cost of #inaction is far greater than the cost of #adaptation. https://lnkd.in/em-8q5EH

The Baku to Belém Roadmap to 1.3 Trillion is a plan for action, building on COP29's finance milestone agreement, and carrying momentum into #COP30.  At its core, the Roadmap is about turning commitments into practical, inclusive climate finance action that’s effective in delivering outcomes that protect lives and strengthen economies.   For the first time, more than 200 governments, banks, businesses, and communities have joined forces to outline workable solutions for mobilizing climate finance.     The Roadmap shows how, by working together, we can scale up climate finance towards USD 1.3 trillion a year by 2035, helping developing countries meet their climate goals.     This can bring tremendous benefits for the global economy – generating jobs, protecting communities, and driving innovation.    The task is ambitious, but achievable. The tools exist; what’s been missing is coordination and shared commitment.     This Roadmap provides a guide to both, aligning public and private finance behind a common direction, and building confidence that 1.3 trillion is within reach.     Times are tough; many governments have scarce resources and hard choices. But positive tipping points are already taking hold: from dramatic declines in the cost of clean energy, to innovation in sectors of the economy we thought would take decades to decarbonise.     It's also high time for a paradigm shift. Treating climate finance purely as cost, or as charity, is misguided and self-defeating, and has held back the progress we need.    Make no mistake: scaling up climate finance hugely benefits every nation. It’s a vital investment in resilient global supply chains, supporting low-inflation growth, food security, and a stronger, more productive global economy that underpins peace and prosperity.    Getting finance flowing means expanding access to catalytic grant finance. It also means unlocking low-interest capital, creating fiscal space, managing debt pressures, and de-risking investment.     Innovative tools – such as debt swaps and private capital reinvestment – can help put money to work where it matters most: into clean energy and resilience, enabling countries to implement Nationally Determined Contributions and National Adaptation Plans more quickly and fairly.    Recent climate shocks show what’s at stake, as climate disasters like Hurricane Melissa rip through communities and economies. So, every early dollar deployed now helps avoid far greater costs later for all nations. There’s no time to waste.    The Paris Agreement is working to deliver real progress, as our three recent reports show, but not nearly fast enough.     By scaling climate finance to match the scope of the climate crisis, we can turn ambition into momentum, making climate action a driver of economic growth, stability, and shared prosperity.    From Baku to Belém, we are moving from agreement to action, focusing on solutions and alignment for people, prosperity, and the planet.

The Opportunity for Private Equity in Climate Adaptation 🌍 2024 was the hottest year on record, with temperatures rising 1.55°C above pre-industrial levels. Extreme weather events are creating systemic risks for economies and businesses. Damages from climate change are already surpassing the costs of mitigation. If warming reaches 3°C by 2100, corporate profits could decline by 5 to 25%. Global adaptation needs are projected at $0.5T to $1.3T annually by 2030, compared with current spending of around $76B. This gap represents a significant investment frontier. Governments will fund much of this effort, but private capital is essential to scale solutions. Public policy creates demand certainty while investors provide innovation and capacity. The Climate A&R Opportunity Map identifies seven themes: food, infrastructure, health, water, energy, biodiversity, and community resilience. Two market categories dominate: early-stage pure-play innovators and large diversified incumbents integrating A&R activities. Both provide different investment pathways. Six subsectors stand out for near-term action: climate intelligence, resilient building materials, flood defense, agricultural inputs, water efficiency, and emergency medical solutions. Attractive subsectors combine strong benefit-cost ratios, manageable financing models, and clear demand signals from both public and private actors. Markets are highly localized. Wildfire management is prominent in North America, drainage systems in Asia, and flood basins in Europe. This enables geographic expansion and roll-ups. Investment strategies include buyouts of mature companies, growth capital for scaling, and venture investment in high-potential innovators. Value creation can be achieved through portfolio alignment, geographic expansion, vertical integration, and pursuing solutions that deliver both resilience and decarbonization benefits. Climate adaptation and resilience offers a financial and societal opportunity. Early investors can capture emerging value pools, support resilience, and shape a defining market of the future. #sustainability #business #sustainable #esg

🔍 New research reveals a sharper picture of the climate–economy connection: 📉 Climate change will likely hurt economic growth more severely than we thought. 📈 Meanwhile, the economic case for investing in climate action is stronger than ever. 𝐈𝐧 𝐬𝐡𝐨𝐫𝐭: 𝐜𝐥𝐢𝐦𝐚𝐭𝐞 𝐦𝐢𝐭𝐢𝐠𝐚𝐭𝐢𝐨𝐧 𝐢𝐬𝐧’𝐭 𝐣𝐮𝐬𝐭 𝐚𝐧 𝐞𝐧𝐯𝐢𝐫𝐨𝐧𝐦𝐞𝐧𝐭𝐚𝐥 𝐢𝐦𝐩𝐞𝐫𝐚𝐭𝐢𝐯𝐞—𝐢𝐭’𝐬 𝐚 𝐬𝐦𝐚𝐫𝐭 𝐞𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲. It delivers near-term growth while significantly reducing long-term losses. 𝐓𝐡𝐞 𝐞𝐯𝐢𝐝𝐞𝐧𝐜𝐞 Key takeaways from this paper ( 👉 https://lnkd.in/eZfKSq_x): 🟣 Most economic models assume climate change only affects a country's economy through local weather—but what if global weather disruptions matter more than we think? 🟣New research adds global weather variables to three major climate-economy models and finds: 🟣 𝐏𝐫𝐨𝐣𝐞𝐜𝐭𝐞𝐝 𝐠𝐥𝐨𝐛𝐚𝐥 𝐆𝐃𝐏 𝐥𝐨𝐬𝐬 𝐛𝐲 𝟐𝟏𝟎𝟎 𝐮𝐧𝐝𝐞𝐫 𝐡𝐢𝐠𝐡 𝐞𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐬 (𝐒𝐒𝐏𝟓-𝟖.𝟓) 𝐣𝐮𝐦𝐩𝐬 𝐟𝐫𝐨𝐦 ~𝟏𝟏% 𝐭𝐨 ~𝟒𝟎% 💥 Why? Because we're more interconnected than ever. Climate extremes in one country now: ➿ Ripple through global supply chains 🟪 Impact trade, food security, inflation, and more 📊 When these insights are plugged into the DICE 2023 integrated assessment model (see figure below 👇 ): The “optimal” level of warming for policy drops from 2.7°C ➡️ 1.7°C— aligned with the Paris Agreement, and Recommended carbon pricing and emissions cuts become far more ambitious In addition, the OECD - OCDE published a new paper ( 👉 https://lnkd.in/e6qJ6tuM) where they show that stronger climate targets (NDCs) could boost global GDP by 0.2% by 2040: ⚡ Low-carbon investments cut emissions intensity & drive productivity 💰 Policy clarity attracts investment—inaction could cost 0.75% of GDP by 2030 🌡️ Act now to avoid climate shocks: up to 13% GDP gain by 2100 if we enhance NDCs Climate action isn’t a cost—it’s a wise investment in future prosperity 🌱