Investment Surge in Climate Innovations for Infrastructure
A recent analysis by sustainability-focused firm A/O has highlighted a robust influx of capital into the realm of infrastructure advancements, despite the wider climate of venture capital (VC) decline. The report emphasizes, however, that there's still a considerable need for further investments to achieve substantial decarbonization within this essential sector.
The Rise of Climate Tech Investments
The affinity towards climate technologies within the domain of infrastructure has seen a dramatic rise, securing a whopping 70% share of total VC funding aimed at the built world this year alone. The concept of the built world encompasses human-made structures including edifices and thoroughfares.
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According to the report by A/O, the distinct sector of climate technology has drawn around £10.7 billion ($11.8bn) into decarbonization strategies for the built environment in the current year. A demonstration of resilience amid the economic pullback saw the sector's investments only dip by 17%, much less than the global VC market's 36% downturn.
European and North American Markets: A Comparative Look
Investment dynamics in Europe juxtaposed with North America have revealed an interesting trend; the report indicates that both continents experienced similar levels of investment in built world climate tech, courtesy of amplified European commitments, especially from Germany and the UK, contrasting a 32% shrinkage in the US market.
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Highest Funding Flows and Emerging Technologies
Retrofitting services have garnered the lion's share of funding, driven by government incentives, regulations, and ambitious corporate carbon neutrality goals. Expansion is also noticeable in sectors like earth observation, grid storage, infrastructure monitoring, and renewable energy procurement. "These industries are witnessing a swift commercial expansion," Dewerpe added.
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VC investments within the built world modestly represent merely 5% of the total VC stakes for the year, pinpointing the sector as still extensively underinvested. A/O cautions that the built environment is accountable for 37% of global greenhouse gases, necessitating enhanced investments in climate tech for substantial impact.
A 2019 study by the World Green Building Council reinforced this narrative, associating 39% of global energy-related carbon emissions to buildings alone, thus underscoring the built environment sector's critical role in confronting the climate crisis.
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Connecting Construction to Carbon Outputs ️ ️
Further investigatory efforts by experts at University College Dublin, including research fellow Dr. Richard O’Hegarty and associate professor Oliver Kinnane, have shed light on the construction and built environment sectors' contribution to 37% of Ireland's carbon emissions, mirroring the global predicament articulated in the A/O report.
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