Bucking the headwinds that roiled most capital markets, climate-related private-market technology investments increased in 2022, with power, transportation, and water the biggest targets for funds. That growth seems poised to continue this year, in part thanks to policy support in the United States and Europe, according to senior partners Fredrik Dahlqvist and Anders Rasmussen and colleagues.
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A vertical bar chart compares the proportional makeup of climate-related private-equity investments from 2017–22. Each bar is broken down into the share of each year’s investments, by sector. Those sectors are, in breakdown order: industrials, waste, consumer, building, oil and gas, hydrogen, carbon, agriculture, water, transportation, and power. In 2017, the investment total was more than $70 billion, and by 2022 it totaled more than $190 billion. The largest share each year, by far, is the power sector. Secondary annual data below the graph shows climate tech investments as a percentage of total private-equity or venture capital funding, from 6% in 2017 to 12% by 2022.
Footnote 1: Includes equity value of completed buyout/leveraged buyout, growth/expansion, private investment in public equity, add-on, accelerator, angel, seed, early-stage venture capital, later-stage venture capital, grants, and infrastructure investments; includes subsegments: transport, buildings, power, water, agriculture and land use, consumer, oil and gas decarbonization and sustainable fuels, hydrogen, waste, industrial decarbonization, and carbon management.
Source: PitchBook; McKinsey analysis
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To read the article, see “Climate investing: Continuing breakout growth through uncertain times,” March 13, 2023.