As the environmental situation worsens, tech companies are focusing on enhancing their funds in climate tech.
Addressing climate change challenges is the need of the hour. Every day, there is something negative happening around the globe against environmental norms. People are already reaping the impacts of what they have been sowing for years now. The consequences of heatwaves, drought, wildfires, and other events on climate change are becoming more and more visible. When people travel fast towards the digital world, scientists and researchers are working on finding an exit door through technology.
Entrepreneurs and investors are making the most of the world’s excitement about climate tech, hammering out innovations in every energy-related field. Many of the projects show great promise for helping to find the way out of the heating world. It is not just business people who find climate both profitable and protective; even governments across the world are working on making initiatives on climate change mandatory. Kara Swisher, a tech journalist, recently mentioned in her article that ‘The world’s first trillionaire will be a green-tech entrepreneur.’ It is a promising statement with 100% fact. According to a PwC report, the early-stage venture funding for climate tech companies was about US$418 million in 2013, while in 2019, the total funding increased to US$16 billion. This sure gives us a view on where the tech industry is going hand-in-hand with climate change.
About climate tech and its investments
Climate tech is a rapidly emerging industry in which data-driven products are developed to enable communities, companies, and governments to understand their risk and exposure to the effects of climate change and take action to adapt and become resilient. Climate tech solutions come in many forms, including software-as-a-service (SaaS), application programming interfaces (API), Internet of Things (IoT), and physical satellites and sensors. Companies involved in climate tech follow three characteristics,
- Companies integrate weather and climate data including historical, near-real-time, climate models or some combinations for actionable intelligence.
- Companies contribute to existing weather and climate datasets.
- Climate tech companies generate and distribute scientifically sound new weather, and climate data and information.
Climate tech investment encompasses a broad set of sectors, which tackles the challenge of decarbonizing the global economy, intending to reach net-zero emission before 2050. This includes low-to-negative carbon approaches to cut key sectoral sources of emissions across energy, build environment, mobility, heavy industry, and food and land use. It also adds cross-cutting areas such as carbon capture and storage or enabling better carbon management. Funding in climate tech increases as tech giants is finding the sector to be more prominent and futuristic.
Recent Funding in Climate tech
Amazon’s Climate Pledge Fund: In June 2020, Amazon infused US$2 billion funding in a program called The Climate Pledge Fund. The dedicated investment will go for visionary companies whose products and solutions facilitate a low-carbon economy transition.
Microsoft’s Climate Innovation Fund: Microsoft announced a big investment of US$1 billion in a climate innovation fund for climate solutions. The company went a step further and declared that Microsoft would become carbon negative by 2030.
Other Investments: Nature’s Fynd, a Chicago-based start-up, disclosed a healthy infusion of US$80 million in March 2020. Artificial Intelligence software company RoadRunner Recycling, which automates the routing for commercial recycling processes, secured US$28.6 million intended to help it expand into up to ten new markets this year.