Pollution is out, and climate tech is in – at least, that’s what these companies want to think. But are their efforts enough to take on a global crisis?
Climate Technology: A Brief Overview
Climate tech is but one subsection of the umbrella term of Greentech: technology designed to better the planet in some way. But climate tech companies’ focus is entirely on minimizing greenhouse gas emissions, meaning that other environmentally beneficial technologies, like ocean waste removal, would not qualify. Instead, it includes technologies that either reduce emissions, avoid them entirely, or even remove CO2 from the atmosphere.
Read also: Top 5 Green Tech Startups in 2024
The Growing Landscape of Climate Tech Companies
Ever since the Industrial Revolution, large-scale emissions caused by humans have slowly but surely toasted our planet. The world began feeling the heat in the second half of the 20th century; by the time climate change was declared a global problem by the United Nations in 1990, Earth’s temperature had already increased around half a degree Celsius over pre-industrial levels. The next few decades saw a growth in public concern, and – despite fossil fuel companies’ best efforts – domestic and international policies designed to curb emissions. This led to the rise of several industries providing ways to do so, predominantly renewable energy and electric vehicles (EVs).
Despite a few bumps in the road, these businesses blossomed; the renewable energy and EV industries were worth almost $882 billion and $824 billion in 2020, respectively. Around 30% of the world’s energy today comes from renewable sources, and 18% of cars sold in 2023 were electric. Other technologies, like energy storage, capturing and storing CO2, and various other methods of minimizing emissions have also had a meteoric rise in the last few years; according to data from BloombergNEF, investment into climate tech more than tripled from 2019 to 2023. In addition to companies dedicated to these industries, most fossil fuel giants have invested in some sort of climate tech.
But climate change’s threat looms closer than ever. In 2023, average global temperatures reached 1.45° Celsius above pre-industrial levels: just a fraction under 1.5°C, the limit set out in the 2015 Paris Agreement above which triggering so-called climate tipping points, like widespread flooding (caused by melted Arctic ice) or food crises (caused by harm to crops), becomes likely.
Best Climate Companies in Renewable Energy
Tongwei Solar
- Location: China
- Founded: 1992
- Number of employees: 56,406
- Current funding level: $19.29 billion operating income for 2023
- LinkedIn: https://www.linkedin.com/company/tongwei-solar/
Inside China’s thriving solar industry – providing up to 90% of the world’s solar cells – Tongwei is one of the biggest players. It has shipped over 200GW of cells, which the company claims makes it ‘the largest solar cell producer worldwide in terms of production capacity and shipment volume’.
Vestas
- Location: Denmark
- Founded: 1945
- Number of employees: 29,000
- Current funding level: $249 million operating profit for 2023
- LinkedIn: https://www.linkedin.com/company/vestas
With 88,782 wind turbines installed in 88 countries, Vestas is the top dog as far as turbines go, despite heavy competition from China. It wrestled itself back from a €1.2 billion loss in 2022, producing and shipping 2,554 turbines in 2023.
Read also: Top 5 Renewable Energy Startups in 2024
Best Climate Companies in Energy Storage
Tesla
- Location: US
- Founded: 2003
- Number of employees: 100,000+
- Current funding level: $1.1 billion in net income for 2023
- LinkedIn: https://www.linkedin.com/company/tesla-motors
Tesla might be better known for its spiffy electric cars, but it also recently became the world’s leading producer of Battery Energy Storage Systems (BESS) with a 15% market share (according to Wood Mackenzie). Its subsidiary Tesla Energy produces, among other things, the so-called Megapack (a large-scale lithium-ion storage system) as well as the Powerwall, a ‘whole-home backup’ system for residential use.
Sungrow
- Location: China
- Founded: 1997
- Number of employees: 13,697
- Current funding level: $1.3 billion profit for 2023
- LinkedIn: https://www.linkedin.com/company/sungrow-power-supply-co-ltd
Sungrow takes second place in the battery storage world. Like Tesla, it offers both residential and industrial-scale systems as well as solar cells and EV chargers. It has over ‘515GW power electronic converters’ installed in over 170 countries.
Best Climate Companies in Electric Vehicles
BYD Auto
- Location: China
- Founded: 2003
- Number of employees: 290,000 (as of December 2022; total company, not just auto)
- Current funding level: $4.23 billion profit for 2023
- LinkedIn: https://www.linkedin.com/company/byd/
A subsidiary of BYD company (which also produces electronics), BYD Auto is one of the top – if not the top – EV producers in the world. It churned out over three million cars in 2023, beating rival Tesla, with most of them sold in China. Alongside its vast selection of cars, BYD also produces a variety of electric buses and trucks.
Tesla (again)
- Location: US
- Founded: 2003
- Number of employees: 100,000+
- Current funding level: $1.1 billion in net income for 2023
- LinkedIn: https://www.linkedin.com/company/tesla-motors
BYD and Tesla are neck-and-neck when it comes to being the top EV producer; in fact, Tesla recently beat its rival in sales in 2024’s first quarter sales. It shipped 1.8 million cars in 2023, and retains the biggest chunk of the US market (its cars take the top spots in Europe too), though competition is warming up.
Best Climate Companies in Sustainability
Brimstone
- Location: US
- Founded: 2019
- Number of employees: less than 50
- Current funding level: $60 million+ through seed, Series A, and a grant; recently won $189 million federal award
- LinkedIn: https://www.linkedin.com/company/brimstoneenergy/
Cement accounts for up to 9% of human-made CO2 emissions. To change that, Brimstone has reworked the very composition of its cement, switching out limestone – responsible for 60% of the CO2 – for calcium silicate rocks. The remaining emissions are soaked up with magnesium embedded in the cement. The result is ‘chemically and physically identical to conventional Portland cement,’ the most common type used in construction.
Beyond Meat
- Location: US
- Founded: 2009
- Number of employees: 1,419 (as of December 2021)
- Current funding level: $82.7 million net loss in 2023
- LinkedIn: https://www.linkedin.com/company/beyond-meat/
Now a staple in many hip restaurants in the West, Beyond Meat’s pea-based burger patties are designed to mimic the taste and texture of beef, a massive polluter; in beef herds, up to 101 kilograms of CO2 are produced per kilo of edible weight, the World Wildlife Fund estimates. The company also sells plant-based sausages, mince, meatballs, and chicken.
Read also: Top Sustainable Tech Companies & Startups in 2024
Best Climate Companies in Carbon Capture and Storage
Climeworks
- Location: Switzerland
- Founded: 2009
- Number of employees: 450+
- Current funding level: $810 million (as of 2023)
- LinkedIn: https://www.linkedin.com/company/climeworks/
As it’s such a young industry, many carbon capture or removal projects are propelled either by startups or oil giants, and most have yet to come to fruition. Climeworks is the exception; in May 2024, it opened the world’s largest DAC facility in Iceland. The company’s brand of carbon capture and storage (CCS) is Direct Air Capture (DAC) – snatching the CO2 straight from the surrounding air – via filters that collect the stuff and are then boiled to distill it. Another company, Carbfix, turns the carbon into minerals and stores it underground, where it remains for good.
CarbonCapture
- Location: US
- Founded: 2019
- Number of employees: 68
- Current funding level: $80 million via Series A
- LinkedIn: https://www.linkedin.com/company/carbon-capture-inc/
Among the slew of startups clamoring for CCS innovation, CarbonCapture stands out. With its Project Bison plant, to begin operations in Wyoming in 2025, it hopes to remove 5 million tons of CO2 per year by 2030 via DAC; for its efforts, it’s secured cash from investors including Aramco and Amazon. It recently unveiled its Leo Series, a modular system designed for mass production; each of the shipping container-sized units can remove 500 tons of CO2 per year.
Read also: Top 5 Carbon Capture Startups in 2024
Best Climate Companies in Recycling and Waste Management
Sims Limited
- Location: Australia
- Founded: 1917
- Number of employees: 4,000+
- Current funding level: AUD 181.1 million in net income for 2023
- LinkedIn: https://www.linkedin.com/company/simslimited?originalSubdomain=au
Operating over 280 facilities in 14 countries, Sims Limited is one of the biggest recycling companies around. Its specialties include metal recycling, a vital climate technology given that metal production accounts for 40% of industrial emissions. It also specializes in recycling e-waste and vehicles.
GEM
- Location: China
- Founded: 2001
- Number of employees: 10,253
- Current funding level: $130.1 million profit for 2023
- LinkedIn: –
For GEM, the millions of tons of battery and e-waste in China are, quite literally, a goldmine. In factories it calls Urban Mines, the company extracts precious metals and minerals from, so far, over one million tons of e-waste, plus scrapped cars and batteries. Mining these minerals from the Earth is an environmental detriment; for example, mining a ton of lithium – critical for EV batteries – releases up to 15 tons of CO2. Through its recycling, GEM claims to have avoided the release of 789,900 tons of the stuff.
Challenges and Opportunities for Climate Tech Companies
The opportunities for climate tech companies have never been clearer: an ever-worsening climate fuels growing public concern, which in turn puts pressure on governments and companies to abate their emissions and provide mitigation strategies. Already, this has led to policies like the Paris Agreement and the US’s Inflation Reduction Act, which lay out concrete climate targets or tax breaks and incentives for climate tech, respectively. All this has led to greater demand for innovation that makes it easier to limit emissions on governmental, corporate, and private levels.
But climate tech is not for the faint of heart. Much of it relies on new, untested technology that is not only tricky to scale, but also takes decades and eyewatering sums of money to develop. Some of the tech is also hyped to the max, creating unrealistic expectations. This deadly combination had already claimed a victim a little over a decade ago: the first wave of Western cleantech went bust when it wasn’t immediately all it had cracked up to be (not helped by cheap oil, cheap Chinese tech, and the 2008 financial crash). The tech that did survive or bounce back – namely renewable energy and EVs – is now a booming business. But many younger industries, like the startup-rich CCS, have yet to cross the ’valley of death’ lying between early potential and large-scale scalability.
Read also: Top 6 Clean Tech Companies & Startups in 2024
Why Are Companies Investing in Climate Tech?
There are a few reasons why climate tech is an attractive investment for companies, especially big conglomerates with massive carbon footprints. For one, it’s an easy way to win brownie points with the public and, in the US or Europe, tax breaks from the government; spending a cool few million on climate-friendly innovations is often cheaper than changing your business model or – in the case of the fossil fuel industry – your actual product. Also, larger companies are often perfectly placed to handle the time and money-guzzling development processes in more newfangled corners of climate tech. The pattern is especially prominent with CCS, which fossil fuel giants are particularly fond of as it allows them to win carbon credits without touching the rest of their business. As a result, most of the world’s largest CCS facilities are overseen by fossil fuel giants, including ExxonMobil and Petrobras.
Larger companies also like to invest in companies or startups focused solely on climate tech. The latter are free from the lethargic corporate processes that plague bigger firms, allowing them to innovate at a faster rate. This method is a win-win; investors get the innovation and PR points, while the climate tech companies get the money they often lack. There are too many examples of these relationships to count, but carbon capture, removal, storage, or utilization is a particularly popular investment choice; Google, Chevron, Aramco, Shell – to name a few – have all invested in such startups.
The Future of Climate Technology and Its Companies
One of climate tech’s biggest strengths is its focus: reduce emissions, and anything else comes second. At the same time, though, its scene is wildly fragmented; mature tech like renewable energy and EVs is booming, while other sectors are lagging behind. And though all climate tech is important to lowering emissions in some way, startups focusing on staunching the biggest emissions sources – especially industrials and agriculture – receive the smallest shares of investments, partly because many technologies needed to decarbonize them already exist, but have yet to be scaled, according to PwC.
Herein lies one the most critical conundrums for climate tech’s future: innovation itself is not enough. However many emissions a technology may reduce, it’s useless unless it can be deployed on a large scale without breaking the bank. For that to happen, says Berndt Heid, a senior partner at McKinsey, ‘someone has to pick up the bill for it. That’s either us, as consumers, or it’s public money, or it needs to be companies that take a risk now with no positive business case,’ (via Columbia Business School).
Looking at the scene today, it’s clear that governmental programs will continue to play the key role; companies have fewer incentives to decarbonize without subsidies, and while consumers are willing to pay more for a ‘green premium,’ they’d only be paying for the finished product. Governmental incentives and grants not just make climate tech more attractive to companies and consumers, but can create entire industries by funding development; for example, China’s state support of its solar industry helped it dominate the market today. More recently, low-emissions cement and steel are becoming ‘feasible’ as a result of government grants (as reported by Forbes).But this support is by no means a guarantee; powerful fossil fuel lobbies have succeeded in influencing climate policy, and can do so again. So for climate tech to continue its rise, its companies must eventually stand on their two legs without governmental support, becoming business powerhouses as well as saving the planet. No pressure.
