VC Investment in Climate Technology Sector Surges 38-Fold in 7 Years...

PwC Publishes Climate Technology Report
Investment Growth Rate Three Times Higher Than AI-Related Investments

[Asia Economy Reporter Minji Lee] Venture capital investment in climate technology is rapidly increasing worldwide. According to the ‘PwC Climate Technology Report - Climate Tech, the Next Destination for Venture Capital’ recently published by PwC on the 14th, investment inflows into early-stage climate technology startups were about $420 million in 2013, but surged to $16.1 billion in 2019, nearly 38 times increase in seven years.

The report stated, “Lower technology costs, increased consumer demand, strong policies and regulations from governments worldwide, rising corporate demand, increased investment, and a growing number of climate tech founders were key factors,” adding, “This is three times the growth rate of venture capital investment in AI during the AI boom period.” Furthermore, the spread of COVID-19 and the election of Democratic candidate Joe Biden as president also heightened interest in climate and environmental issues.

‘Climate technology’ refers to a broad field aimed at achieving net zero greenhouse gas emissions and addressing the global economy’s decarbonization challenges. It encompasses various sectors including energy, construction, transportation, heavy industry, food, and land use, involving activities such as reducing greenhouse gas emission sources, capturing and reducing carbon dioxide, and enhancing transparency through proper accounting and disclosure for carbon emission management. The report explained, “The net zero greenhouse gas declarations competitively announced by countries, cities, companies, and investors worldwide can be seen as signals predicting future demand in the climate technology market.”

The report analyzed that startups, based on technological advantages, have an ecosystem suitable for driving the development of climate technology through rapid growth and high scalability. Additionally, capital showed significant differences by region and reduction technology. Of the total $29 billion venture capital invested in climate tech startups, nearly half (49.3%) was invested in the U.S. and Canada, China accounted for $20 billion or 32.9%, followed by Europe at 11.7%. Asia excluding China accounted for only 3.1%. In terms of investment sectors, the U.S. and Canada showed relatively balanced investment distribution across sectors, whereas China concentrated 98.5% of its investment in mobility and transportation.

Chanyang Kang, ESG Platform Leader at Samil PwC, said, “Globally, venture companies in internet search, e-commerce, smartphones, sharing businesses, and electric vehicles (EVs) have successfully established their businesses in the market with active support from venture capital, not only becoming mainstream industries but also surpassing traditional industries,” adding, “Korea’s climate technology is at an early stage, and venture companies and venture investors must play an important role in achieving the net zero greenhouse gas emissions goal.”

This content was produced with the assistance of AI translation services.