Investment in climate technologies fell dramatically 2023 as economic headwinds dented investor confidence in all sectors of the economy, the latest data from PwC has shown.
The consultancy giant's recently published State of Climate Tech report notes that venture capital and private equity investment in climate technology has fallen 40 percent year-on-year in 2023 amid a challenging economic environment and geopolitical turmoil.
However, climate technology outperformed other sectors of the economy, with private investment across the economy plummeting by a more dramatic 50 percent.
As such, climate technology saw its share of venture capital and private equity investment grow to 10 percent, up from 7 percent in 2018, PwC said.
PwC said the findings revealed signs that climate technology investment was becoming "more mainstream" as more first time investors were dipping their toes into the market and more deals occurred at the "mid stage rather than the early stage."
The share of investment going to the industrial sector had almost doubled.
The consultancy giant also welcomed the growing diversification of climate investments, with more funding flowing into decarbonization technologies focused on industries where emissions reduction potential was greatest. For example, the report highlighted how the share of investment going to the industrial sector had almost doubled to 14 percent between the final quarter of 2022 and the third quarter of 2023.
Solar power's share of investment was also up 24 percent, it said, while green hydrogen was up 64 percent, and carbon capture, use and storage is up 39 percent since 2022.
While mobility still accounts for 45 percent of all investment, electric vehicles (EVs) proportional share of investment was down 50 percent since 2022 and micromobility down 38 percent, it said.
Emma Cox, global climate leader at PwC, said the fall in climate technology investment was "concerning" given the critical need to develop and s
Read More
