Investment into climate tech has been strongest in Europe, with London and the UK leading the way, according to venture capital analysis firm Dealroom.
Its report, Five Years On: Global Climate Tech Investment Trends Since the Paris Agreement, shows that the European share of global capital in this space has risen from 18% in 2016 to 28% at this point in 2021. Meanwhile, Asian countries have seen their share decrease rapidly from 38% and 51% in 2016 and 2017 to just 14% today.
However, that figure has increased three percentage points from 11% in 2020.
The US, meanwhile, has remained consistently inconsistent, falling from 42% to 32% between 2016 and 2017, then tracking upwards from 54% in 2018 and 2019 to 61% in 2020. However, it stands currently at 57%.
Share knowledge and solutions
Writing in the foreword, Lucette Demets, head of sustainability at London & Partners, said: “Europe is one super connected tech ecosystem and in order to really drive progress, we need cities to work together to spark ideas, share knowledge and scale solutions.”
She added: “Home to the biggest cluster of climate tech companies in Europe, London is determined to be a global leader in taking action to meet global climate commitments. It is one of the first cities in the world to publish a climate plan compatible with the highest ambition of the Paris Agreement. London’s ambition to become a net zero carbon, zero pollution and zero waste city is backed by a strong strategy, targets, infrastructure and finance and demonstrates its commitment to being the city of the future, today.”
Europe, says the report, is the fastest growing region for climate tech, with investment growing seven-fold since 2016 from $1.1bn to $8bn. The US lags in this regard, having only increased by 5.8x in this time. Within Europe, London-based startups received over 70% of UK funding. As a nation, the UK placed fourth behind the US, China, and Sweden.
CNBC did a deep dive on the report and its finding. Writing on its website, technology correspondent Sam Shead said: “With the exception of the Bay Area in California, London is home to the biggest concentration of climate tech start-ups, according to the report. It says 416 climate tech start-ups have been created since the Paris Climate Agreement — a global pact forged at COP21 in 2015 when nearly 200 nations pledged to avoid the worst impacts of climate change. Climate tech start-ups in London are collectively valued at $28bn, according to the report.”