TLDR:
Key Points:
- Over a third of climate solutions are ready for investment but need more capital for accelerated deployment.
- Trillions of dollars are needed to deploy adequate climate solutions across various sectors.
In a new report released by the CREO Syndicate, a large investor group focusing on climate solutions, important insights were uncovered regarding private investments in the sector. The report highlights that a significant number of climate solutions are already developed and could benefit from additional capital and effort for faster deployment. Additionally, the report emphasizes the massive funding requirements, amounting to trillions of dollars, for the deployment of climate solutions across energy, transport, industry, agrifood, land, and built environment sectors.
One of the key findings of the report is the existence of a significant funding gap at the “missing middle” stage, which lies between venture capital funding and infrastructure investment. This gap poses a challenge for projects that have moved past the early stages but are not yet at a commercial scale. Furthermore, the report reveals that in the U.S., the climate investment landscape is dominated by venture capital, highlighting the need for a more diverse capital ecosystem to support large-scale deployments.
The report also points out the underwhelming returns in the growth stage of investing in climate solutions, potentially attributed to the over-application of venture capital structures at a stage that requires infrastructure investment. It calls for a more nuanced approach to funding, leveraging different investment structures for different stages of project development.
Overall, the report provides valuable insights into the challenges and opportunities in climate investments and calls for a broader dissemination of these lessons beyond the family office and foundation communities, towards the institutional investor universe.
