Variations for Investing in Climate Innovation

Back to Articles

By Chamber Press Office, 06 October 2023

With a looming climate crisis, entrepreneurs and investors alike are looking for innovative solutions to fight it with low-carbon solutions.  

The International Monetary Fund (IMF) has suggested that climate investment could be a win-win scenario for the planet and economies, stating that a country’s bottom line could benefit more from nature conservation and renewable energy than conventional agriculture and fossil fuels.  

Furthermore, in a report, they concluded that investments in biodiversity and renewables could do more to boost a country’s GDP than investments in fossil fuels or activities that destroy natural ecosystems.  

It found that each dollar spent on activities that either absorb excess carbon or prevent carbon from entering the atmosphere – from protecting wildlife and ecosystems to zero-emission power plants – can create more economic activity than a dollar’s worth.  

Other specific findings from the IMF report were that investing in clean energy options and nature conservation impacts GDP around 2 to 7 times greater than investing in non-environmentally friendly energy resources such as gas, coal and oil and unsustainable land use like industrial agriculture. Investing in ecosystem conservation can return up to seven times as much as the amount initially invested over the course of five years.  

Corporate investment in a low-carbon economy 

The IKEA Foundation announced in 2021 to commit 1 billion euros to lower greenhouse gas emissions through climate programmes over the next five years. This commitment has arrived with the additional 500-million-euro already committed to spend on climate mitigation and adaptation programmes in the upcoming years. 

With this new funding, the IKEA Foundation is set to support renewable energy solutions that deliver greenhouse gas reductions quickly and efficiently. This includes replacing polluting energy sources with renewable ones and making these solutions accessible to communities.  

Venture Funds for Climate 

The Venture For ClimateTech is a non-profit global venture studio and accelerator program on the front lines of a worldwide community of innovators. It sources the most promising Climate Tech innovators from around the world and offers them hands-on support until they are ready for first customers, pilot runs, and investment.  

The annual For ClimateTech Global Innovation Challenge provides selected with up to $125,000 in non-dilutive funding throughout a seven-month virtual accelerator. Entrepreneurs are chosen based on their solution’s ability to reduce greenhouse gas (GHG) emissions; originality; potential impact on underserved populations; technology and team scalability; market timing, demand, and competitiveness of the idea; and the team’s knowledge, passion, and ability to communicate. 

Disrupting the market with climate solutions 

One of the most forward-thinking investment groups is Lowercarbon Capital, essentially backing companies making real money reducing carbon emissions and buying us the time necessary to prevent climate breakdown. Their philosophy is that fixing the planet makes good business sense and that it is ‘out with the old and in with the new’ methods that are sustainable. 

The companies they invest in match hard science with ambitions to tackle three things:  

  • slashing new CO2 emissions and other greenhouse gases to zero,  
  • sucking up at least a trillion tons of carbon already in the atmosphere,  
  • buying us all more time by actively cooling the planet.  

In line with these goals, they are funding technologies that reduce sources of methane, carbon dioxide and other various greenhouse gases, focusing on innovative industrial materials, agriculture, energy and transportation.  

Investors at Lowercarbon Capital know that even if we zeroed out emissions overnight, there remains enough Co2 to cause irreparable damage to life on our planet.  

This group of investors is looking for ways to cool the planet to buy more time for the plants, animals and people on the front lines. 

Not all dreams come true 

The Clim8 was a sustainable investing app launched in 2019 aiming to bring sustainable investing to everyone, focusing on investing in companies with climate impact solutions. Despite its initial success and successful fundraising rounds, it closed the business in May 2023 due to a lack of further funding. 

In an interview, CEO of Clim8 Duncan Grierson commented: 

“We started Clim8 to bring truly sustainable investing to anyone, and we had strong portfolio returns in a challenging market, so proved that you can invest in companies with climate impact and still do well. Unfortunately, we have not been able to scale our customer base fast enough to show strong enough traction to venture capital investors.” 

There is no shortage of challenges to overcome in climate innovation, and the road is less travelled for investors, which requires taking higher risks and much learning to achieve results. 

Yet, whether it is corporate investment, investment groups or individual investors, the trends are clearly pointing towards viable and profitable strategies to align economic and environmental interests and create a win-win scenario that ensures a sustainable future for all. 

Article by as content partners Climate Journal and Purpose Content Studio 

Authors: Bronagh Loughlin and Szilvia Szabo 

Please login or register to post comments.
My HomeNews and MediaNewsletters