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London’s climate tech inward investment is key for net zero goals 

London climate tech inward investment
Image credit; stocker1970 / Shutterstock.com

The climate emergency is one of the most pressing issues of our time. It is no surprise, then, that when asked about it ahead of COP28, six in 10 Brits viewed it as a top concern. This makes it the fourth most important issue after the cost of living, the NHS, and the economy.

The real surprise is the number of people who don’t believe that their changes will have an impact.

So, like many do post-COP28 and at the start of a new year, I thought I’d take the chance to reflect on a particular area of interest – the role of international climate tech companies in tackling the climate crisis.

And when I talk about climate tech, I am referring to firms around the world applying the latest technology to help solve problems related to climate change.

Why? Well, put simply, while technology is not immune to climate change, it is set to play a decisive role in helping us to tackle the climate crisis faster and more effectively.

London climate tech investment is growing

It is undeniable that climate tech is heating up in London. Last year, we supported over 100 new international tech firms opening in the capital with climate tech emerging as the sector that has seen the most significant growth in 2023. It made up 23% of foreign direct investment (FDI) into London, twice the number from 2022.

Among these, are various types of international climate tech businesses including the world’s largest electric vehicle maker, BYD, which chose London as its UK headquarters and delivered its 1000th electric bus to the city, making it one of Europe’s largest electric bus fleets.

London also welcomed the award-winning Cloverly from Atlanta, renowned for its climate action tech, and Allume Energy from Australia, specialists in providing shared solar solutions to flats, among others.

Similar trends can be seen across the whole UK. Last year, climate tech startups raised an all-time high of $6.2bn, accounting for 29% of total UK VC investments.

International innovation

The influx of international climate tech firms landing in London is crucial as we approach net zero goals. London remains committed to its goal of achieving net zero carbon by 2030, and Mayor Sadiq Khan plans to double the size of London’s green economy by 2030.

While home-grown climate tech innovation, with firms like Naked Energy on a global mission to decarbonise heating in our buildings, is great to see, it is equally important that we welcome ideas and innovations from outside the city.

It goes without saying, but I’m going to say it anyway: this is a global emergency and ideas and innovations should not be limited to one place.

As a capital city London, like many, prizes innovation and entrepreneurship and provides an opportunity for global climate tech companies to thrive, especially when it comes to the environment and green energy – it’s one of the smartest cities in the world.

In other words, we’re already using technology to help us reach our net zero goals and there’s a huge opportunity to have a bigger impact, particularly in attracting and furthering the international growth of climate tech businesses.

What to expect this year

I believe more and more people will embrace the idea of a circular economy in the year ahead reusing and repurposing resources. Material passports will be crucial for this shift as they can help us track how much carbon different materials produce.

This year, we’ll likely see more efforts to use material passports in building and planning cities, making them more efficient and reducing carbon emissions. It’s an exciting development that we should pay attention to. Looking ahead, I also predict that in the future, hydrogen will be the main fuel for short-haul flights.

Love it or loathe it, COP28 provided a moment for us all – find me someone who didn’t hear about it – to reflect on. And as I do exactly that, I’m reminded about the importance of the international climate tech industry not just for London, but for the country, and the world in tackling the climate emergency.

Climate tech is undoubtedly already creating clear avenues to enable change and impact across business and society. Looking beyond the present and the bigger picture, the actions we take now will impact the generations to come all over the world.

Pru Ashby is head of sustainability at London & Partners.