Global climate tech investment more than triples, but could be better targeted to cut emissions

In December 2021, PwC Global released the State of Climate Tech report. The analysis examines how investors are improving both climate impact and commercial returns through the emerging asset class of climate technology, helping to keep the Paris Agreement's goal of limiting global warming to 1.5 degrees Celsius within reach.

This represents an increase of 210% from the US$28.4bn invested the year prior, with 14¢ of every dollar of venture capital investment now going to climate technology. PwC's State of Climate Tech 2021 reports that where the investment is lacking is in addressing the largest contributors to global emissions. From the 15 technologies investigated, the top five technologies, which represent more than 80% of emissions reduction potential by 2050, received only 25% of the climate techinvestment between 2013 and H1 2021.

Emma Cox, Global Climate Leader, PwC UK, said: “The world has 10 years to halve global greenhouse emissions if we are to have hope of achieving net zero by 2050. Innovation is critical to meeting the challenge and the good news is that climate tech investment is up significantly across the board. However, our research has found there is potential to better channel and incentivise investment in technology areas that have the greatest future emissions reduction potential. This raises the question of why these sectors are missing out – are investors missing a value opportunity or is there an incentive problem that needs the attention of policy makers?”

To find out more about PwC's Climate Tech report, please contact Jason Higgs, Partner, PwC