🌍 Why Now is the Perfect Time to Invest in Climate Tech
The climate tech landscape has reached a level of maturity that makes it an incredibly promising area for investment. Here’s why we believe now is the ideal moment to jump in:
1. Maturing Market: Climate tech is no longer in its infancy. Over the years, it has learned from the early mistakes of Cleantech and the hype from a couple years ago. The sector has grown more sophisticated with increased specialisation in both sectors and capital stack, providing a solid foundation for the future. Whilst that is very clear in large markets like the US, it is also growing in Australia with specialised fund like Tenacious Ventures (Ag/Food Tech), Taronga Ventures (PropTech) and Wollemi Capital (later stage)
2. Valuation Opportunities: With market valuations currently at a low, there’s a unique window to invest in high quality companies at an attractive entry point. Amid interest rate and stock market uncertainty, climate tech offers a great diversification option with typically lower correlation to traditional asset classes.
3. Huge Tailwinds: The momentum behind climate tech is enormous. Governments worldwide are implementing policies to accelerate the green transition, from carbon pricing to renewable energy incentives. While politics may introduce non-linear trajectories, history shows strong and continued upward momentum that will likely intensify as the effects of climate change grow. In Australia, the combination of Australian Renewable Energy Agency (ARENA), Clean Energy Finance Corporation, National Reconstruction Fund Corporation, the R&D tax rebate and Future Made in Australia is creating a very favourable environment.
4. Investors, Public & Employee Demand: An increasing proportion of investors, consumers and employees are demanding sustainable practices and products, creating a fundamental bottom-up momentum. According to a Morgan Stanley article (https://lnkd.in/gr9k2jh5), more than half of investors plan to increase their allocations to sustainable investments in the next year and a Harvard study (https://lnkd.in/gWeu2EFn) found that 59% of all leaders surveyed said “employee activism” caused them to increase their sustainability efforts.
5. Corporate Commitments: Companies are responding with ambitious sustainability goals and firm commitments, driving the need for technologies to scale transition solutions faster or innovate new ones. This will continue to fuel corporate collaboration with startups in the space which is something we, at Climate Tech Partners, are passionate to help foster.
Investing in climate tech now is not just a smart financial move - it’s an opportunity to be part of a critical global movement. The future is green, and the time to invest in that future is today.💚
If you want to hear more about what we do, visit our website (www.climatetech.partners)
#ClimateTech #Sustainability #ClimateChange
Ranya Adam