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Is there enough investment in climate change solutions? What the numbers tell us.

The climate crisis is surely one of the greatest challenges that humankind will have to face. Globally it continues to move up political, corporate, and societal agendas and it is quickly becoming the issue on everyone’s lips.

Cleantech
GovGrant (the intellectual property, innovation, and R&D tax credits specialists) have decided to take a look to see just how the UK shapes up in terms of its global competitiveness in attracting investment for companies developing innovations to tackle the climate crisis. Whether this be reducing the amount of natural resources being consumed or mitigating effects of climate change.

How many cleantech and climate tech companies have received investment this century?

We have investigated companies that have received investment from 01/01/2000 onwards and included companies that are involved with the development of technologies in a wide variety of fields such as decarbonisation, renewable energy, and agricultural innovations, amongst many others.

Globally there are over 21,800 companies in this cohort, with 8,500 headquartered in Europe. The UK lays claim to just under 2,000 of these companies, meaning the UK is the home to around 9% of companies working on these innovations who have received investment this century.

Who is investing in cleantech and climate tech companies?

Globally there has been £1.25 trillion worth of investment into these companies, having attracted that investment from over 24,600 different investors. Narrowing that down to Europe, the figure becomes £444.83 billion of investment, from over 9,400 different investors. Investment into the UK companies stands at £80.95 billion from close to 2,400 different investors.

If we delve deeper into what industries are receiving this investment there are few dominant industries that feature in all the geographical breakdowns. Energy Production attracts the highest level of investment in all three. Environmental Services, Energy Assets, and Alternative Energy Equipment are industries that also feature in all breakdowns.

The top 5 breakdown globally

The top 5 breakdown for Europe

The top 5 breakdown for UK

What percentage of total investment has gone into climate change solutions?

This period saw over £40 trillion invested worldwide so the £1.25 trillion invested in this sector amounts to 3.07% of the total. When we look at European investment it is a higher percentage at just over 4% and in the UK it is slightly less at 2.44%.

Although the capital invested remains a comparatively small number the number of investors is higher – at 8.33% worldwide and 6.05% in the UK. So more investors are looking to this market even though the amount they invest is relatively low.

What is the direction of travel for climate change investment?

Source

  • Data collected from https://pitchbook.com/ on 25/10/2021.
  • Data applies to companies that are classified as CleanTech and/or Climate Tech under PitchBook methodology and that have been involved in a completed ‘deal’ from 01/01/2000 to 25/10/2021, includes various forms of investments and/or transactions.
  • Figures for geographical breakdowns are attributable to companies headquartered in the respective regions.
About Adam Simmonds | Investment Research Analyst
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With a First-Class Bachelor of Science (BSc) in Economics and Finance, Adam’s role with GovGrant is to offer insight to the venture capital and private equity community. He brings a fresh perspective, through the lens of IP, to identify value, risk, and opportunity that is unlikely to have been considered by others.

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