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Climate Tech: An opportunity to save the planet

By Abrar Chaudhury and Jamil Wyne. This article is based on their Climate Tech Opportunity report. 

We are all feeling the heat. From Cerberus and Charon scorching Europe this summer, to the Horn of Africa’s drought stretching into a fourth year, to Typhoon Koinu flooding the streets of Hong Kong; extreme weather patterns are affecting every part of the globe. 

With temperatures and anxiety rising, Climate Tech has emerged as a pivotal solution: to keep us within safe planetary boundaries and help humanity adapt to our changing world. Once considered a niche area of investment, it’s now in the mainstream. 

But where is the money coming from, and where is it going? Do the sectors beloved by investors and entrepreneurs have the most environmental impact? And is the massive injection of capital helping innovation flow to the communities that need it most?

In one of the largest-ever global studies on Climate Tech, we’ve surveyed over 140 climate tech practitioners and interviewed over 60 investors, entrepreneurs, policymakers, and scientists from more than 20 countries. Their answers and insights illuminate ‘The Climate Tech Opportunity'.

Climate tech: Technology built with the intent to mitigate or adapt to the negative impacts of climate change.

A climate gold rush 

Startup and investment activity in climate technology has skyrocketed. Broadly, we define 'Climate Tech' as referring to a range of innovations designed to mitigate, adapt or increase resilience to climate change.

In the years since 2015, when the Paris Agreement was signed, Climate Tech investment has increased nearly ten times, from $6.6 billion invested in climate tech companies to over $60 billion in 2022. Between 2021 and 2022 alone, there was an 89% increase in global climate tech funding. Everyone is chasing the next ‘unicorn’ - and we have already found at last 83 'climate unicorns'. 

But our research shows that it will still take a lot more cash to keep the world on the path to 1.5 °C. According to The Climate Policy Institute, annual investment for overall climate finance, which was at $640 billion in 2020, will need to reach $4.35 trillion by 2030 and almost $6 trillion by 2040. 

Global breakdown of climate activity. USA 45%, China 25%, Europe 18%, Rest of the world 8%, India 3%

And this current gold rush isn’t spread equally across the world. While climate change challenges are global, and climate entrepreneurs can be found in any country, climate tech funding is focused on a select few geographies. During the 2010-2022 period, outside of the US, China, EU, and India, the rest of the world accounted for only 8% of total climate venture capital (VC) activity.

In large part, this could be because the climate tech ecosystem – the collection of funds, organisations, regulations, markets and talent pools – needed to start and build climate tech companies, is still nascent in much of the rest of the world. However, this concentration of funding and attention is a factor behind one of the most unanimous verdicts in our work.

The opportunity gap

Low-income communities and developing countries are already feeling the effects of climate change and are under-equipped to address them. Yet, 89% of our survey respondents do not believe that climate tech solutions are reaching the people who need them most. 

Climate tech solutions and vulnerable communities. Question: To what degree do you agree with the following statement: climate tech solutions are adequately reaching the populations that are vulnerable to the impacts of climate change? 47% strongly disagree, 40% disagree, 3% neither agree nor disagree, 5% agree

Our interviewees shared a broad consensus that climate tech is neglecting these vulnerable communities, but from there, opinions diverged.

Some believe that ensuring that countries with the most emissions, which tend to be wealthier countries, reduce those emissions is the best way to limit the impact of climate change on developing countries. Others believe that we need to focus on aggressively expanding renewable energy in developing countries, especially in regions where energy demand is expected to dramatically rise. Others think the solution is adjusting the funding mix more in favour of adaptation technologies.

There was one other point of agreement worth highlighting: the need to engage local communities in finding and implementing solutions. 

The opportunity mismatch

Another key finding is the mismatch between the industries which need investment and those that are attracting the most capital. When there’s a mismatch between the areas of highest climate impact and the areas where investment is flowing, it can impede progress.

Emissions relative to climate funding. Emissions: 14% energy, 16% transport, 21% built environment, 18% food, agriculture and land use, 29% industry. Total climate finance: 53% energy, 31% transport, 3% built environment, 2% food, agriculture and land use, 1% industry, 10% other/cross-sectoral. VC climate funding: 9% energy, 67% transport, 16% built environment, 8% industry.

Broadly, there are discrepancies between the sectors attracting the most funding and those producing the most emissions. The bulk of venture capital funding has gone to transportation - indeed a large emitter, but one of many. Disproportionately low amounts have reached ‘food agriculture and land use’ and ‘the built environment’, even though these sectors emit relatively similar amounts of greenhouse gases (GHG). Again, and again, they were brought up by our expert interviewees as areas of chronic underinvestment. 

Regionally, there can also be specific mismatches. Some of the experts we interviewed, in Africa for example, highlighted that huge efforts and investments had been made into enabling decentralised renewable energy. But another pressing priority for the region is providing clean power to central grids, since those are used by most commercial and industrial businesses. 

The opportunity lost

Another divide we need to highlight is the disproportionate investment focus on mitigation versus adaptation.

Renewable energy, carbon sequestration, and energy efficiency are all examples of mitigation. These are well-defined and scalable products which directly reduce or remove GHG from the atmosphere. Many of the technologies in this category are fairly well-known and in the market with a clear customer to sell to - these are the opportunities drawing entrepreneurs and investors. 

Adaptation refers to strategies, measures, and technologies which reduce vulnerability and build resilience to the climate changes already being experienced. Currently, only around 7% of all global climate funding goes to adaptation. Our research suggests that this is mirrored in climate tech.

Examples of this type of project might include: Startups building better algorithms for weather forecasting, companies improving public health outcomes, and building more resilient infrastructure. However, there’s not a universally agreed-upon set of adaptation technologies. That lack of clarity makes it more difficult to coalesce research and funding.


We see that when we support climate-resilient technologies in an inclusive way, with the backing of the private sector, the impact is profound.

And while climate change is a global phenomenon, countries and populations will ultimately experience it differently. So, many solutions are not one size fits all. They need to be tailored to fit local contexts, which makes them a challenge to replicate and scale.

Still, this divide directly impacts the question of helping people in the developing world. These are the people being disproportionately affected by climate change. An estimated 100 million people in developing countries may be pushed into poverty by 2030, as a result of climate change. Mitigation isn’t enough. Adaptation is needed to protect and sustain their lives and livelihoods.


Strike while the iron is hot

As the effects of climate change become more pronounced, the enthusiasm and demand for climate tech solutions will only grow. The benefit of our research is that we can course correct as we navigate this challenge - finding ways to ensure that the most vulnerable benefit from these innovations, and that funding flows to the industries and places which need it the most.

Few sectors in recent history have brought together such a mixture of innovation, talent, policy support and investment. We have an urgent and unique chance to contribute to the well-being of our generation, and generations to come. 


This article is the first piece in a two part series drawing on the research and insights from the Climate Tech Opportunity report. The research was done in partnership by the Oxford Climate Tech Initiative and the Skoll Centre for Social Entrepreneurship at Oxford University's Saïd Business School. It was authored by Jamil Wyne (Project Lead), Minahil Amin, Abrar Chaudhury, Courtney Savie Lawrence, Aoife Brophy, and Michelle Lee. Both Minahil and Courtney are Oxford MBA alumnae. 


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