A group of concerned investors and academics have today (22 Nov) signed an open letter to UK Prime Minister Rishi Sunak urging him to prioritise the county’s climate technology and innovation investment sector.
In September 2023, Sunak reneged on a 2030 deadline for the sale of new petrol and diesel cars as well as the phasing out of gas boilers. The policy U-turn was seen by many as reneging on a commitment made to those developing and investing in technologies designed to address the climate crisis.
Ahead of the COP28, the letter signed by founders and investors from organisations including A/O, AlbionVC, Kiko Ventures, Fifth Wall and Notpla, as well as academics from Imperial College London and UCL, warned of irreparable damage being done to the nascent climate tech industry where the UK has already established global leadership and brought forward promising companies that could be vital to building a strong green economy.
The letter accuses the UK government of “watering down the country’s climate commitments” which risks sacrificing hard-won credibility that has been crucial to instilling business confidence and making the UK an attractive location for green investments.
The letter comes at a challenging time for those investing in climate technology. According to PwC’s 2023 State of Climate Tech report, a combination of geopolitical turmoil, sinking valuations, inflation and rising interest rates has set back private markets of all kinds.
Total venture and private equity investment, for example, was down 50.2% year-over-year, reaching $638bn in 2023. Private market equity and grant funding in climate tech startups, specifically, has not fallen quite as far at 40.5% over the same time frame. But the drop still takes climate tech start-up funding back to the level of five years ago, according to PwC.
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Using the offshore wind sector as a prime example of what a strong policy environment and subsidy regime can achieve – a 50% cost reduction and the largest installed capacity in the world – the signatories of the letter make the case that “investing in climate tech isn’t just the right thing to do, it also has the potential to turbocharge our economy and offer a great return on investment.”
The letter goes on to urge the prime minister to “unleash growth by creating an economic plan that prioritises green investment – as we have seen in the US and in the EU – addressing current barriers to growth including finance and skills.”Don’t miss our coverage of COP28! Subscribe here for exclusive insights & analysis.