Climate & Sustainability

The climate tech technology stack is broad and multidisciplinary. In energy, dispatchable energy sources, especially nuclear and geothermal, surged in deal value in 2025, supported by four of the year's 10 largest raises, alongside continued solar and wind cost reduction. Battery technology is advancing across multiple chemistries: solid-state (higher energy density), sodium-ion (lower cost, abundant materials), iron-air (ultra-long-duration), and flow batteries (grid-scale, 100+ hour duration). Carbon capture spans point-source capture (from industrial emissions), direct air capture (from ambient atmosphere), enhanced weathering (accelerating natural CO2 mineralization), and ocean-based carbon removal (electrochemical and biological approaches). Hydrogen production via electrolysis is advancing with proton exchange membrane (PEM) and solid oxide electrolyzer technologies. Sustainable materials innovation includes bio-based plastics, mycelium-based packaging, engineered proteins for textiles, and low-carbon cement. AI is embedded across the stack: optimizing energy systems, predicting equipment failures, designing new materials, and automating carbon accounting.

Climate technology applications span virtually every sector of the economy. In power generation, utility-scale solar plus storage projects are now being built at costs below existing coal and gas plants, with companies like NextEra Energy and AES building gigawatt-scale clean energy portfolios. In buildings, smart building operating systems (BrainBox AI, Sidewalk Infrastructure Partners) optimize HVAC, lighting, and energy management to reduce commercial building energy consumption by 20-40%. In transportation, fleet electrification platforms help logistics companies transition from diesel to electric vehicles, while sustainable aviation fuel startups are producing drop-in jet fuel from waste cooking oil, agricultural residues, and captured CO2. In agriculture, precision agriculture reduces fertilizer and water usage through sensor-driven application, while alternative protein companies develop plant-based, cultivated, and fermentation-derived substitutes for the most carbon-intensive food products. In industry, green hydrogen enables decarbonization of steel, cement, and chemical production where electrification alone cannot eliminate fossil fuel dependence. In finance, carbon accounting platforms (Watershed, Persefoni) automate the measurement and reporting of corporate emissions across complex supply chains.

Climate and sustainability technology is one of the largest and most structurally supported venture categories globally. Climate tech venture and growth investment totaled $40.5 billion in 2025, up 8% from 2024, holding steady even as broader venture markets softened. New climate-focused funds raised $103 billion in 2025, led by Europe at 54% of capital, while the US contributed 16% amid shifting policy dynamics. Exit value climbed to $27.2 billion, the strongest post-2021 showing, driven by public listings and sustained acquisition activity. The sector spans energy generation and storage, carbon capture and removal, sustainable materials and manufacturing, circular economy, water technology, sustainable agriculture, ESG technology, and the emerging category of climate adaptation and resilience infrastructure.