Climate Tech
Monitoring Innovative Solutions to Climate Change
Despite a decline in deal activity, climate-tech startups continue to attract substantial investment worldwide. In 2023, $26 billion was invested in 1,312 climate-tech deals globally, according to PitchBook data. In 2024, despite a slower pace, 81 deals have been completed, totaling $1.4 billion. Namratha Kothapalli, principal at Speedinvest, notes that climate tech now constitutes more than 10% of total private equity (PE) and venture capital (VC) investments globally, indicating its growing significance in an overall contracting market.
According to recent data provided by PwC towards the conclusion of 2023, climate technology now also coincidentally constitutes 10% of all global technology deals, a figure that has steadily increased from 1.5% over the past decade.
We have noted some key trends and opportunities:
Carbon Accounting and ESG Reporting SaaS: large tech and strategic consulting firms have been active in this space in addition to legacy EHS SaaS players.
Integration of AI and Data Analytics: Artificial intelligence (AI) and data analytics are transforming energy efficiency software, enabling predictive maintenance, demand forecasting, and optimization of energy-intensive processes. Organizations leveraging AI-powered software platforms can help clients identify cost-saving opportunities and achieve sustainability goals.
Adoption of Smart Building Technologies: Energy efficiency software solutions are essential for optimizing energy consumption, reducing emissions, and lowering operating costs. Smart building technologies, including energy management systems, building automation, and IoT sensors, are enabling real-time monitoring and control of energy usage. Companies offering innovative software solutions for optimizing building performance and energy efficiency are poised for significant growth.
Vertical Carbon SaaS
As companies aim for carbon neutrality, there has been a remarkable rise in the prominence of carbon accounting software.
Projections indicate significant growth from US$15.31 billion in 2023 to US$64.39 billion by 2030, with a compound annual growth rate (CAGR) of 22.8%. These software tools are anticipated to play a crucial role in shaping a sustainable, low-emission world. However, we have fierce competition has led to new entrants looking to disrupt this space with a dedicated vertical focus.
IBM + Envizi + EY
Converging Integrated Solution in Sustainability
EY and IBM have formed a global alliance aimed at advancing environmental, social, and governance (ESG) solutions. This partnership aims to empower organizations to drive business transformation while prioritizing sustainability and value creation. With EY's extensive expertise in advising on sustainability strategies and transformation, coupled with IBM's innovative technology capabilities and software portfolio tailored for measuring, delivering, and reporting against sustainability goals, the collaboration promises to address the complexities of ESG data comprehensively.
The combined efforts of EY and IBM will focus on integrating sustainability into business strategies, facilitating the operationalization of sustainability programs at scale, and redefining value creation for businesses, stakeholders, employees, and the environment. Specific offerings planned include solutions for accounting and managing Scope 3 greenhouse gas emissions, ESG Managed Services, and the EY Sustainable Enterprise Asset Management (SEAM) tool for comprehensive carbon capture, analysis, and decision support across scope 1, 2, and 3 emissions.
This collaboration harnesses the strengths of EY's Climate Change and Sustainability Services and Technology Consulting practices alongside IBM's suite of software, including the IBM Envizi ESG Suite, IBM Environmental Intelligence Suite, and others. Together, they aim to develop frameworks and accelerators to help companies operationalize decarbonization action plans at the asset level.
Already, EY and IBM have made strides in delivering value-led sustainability solutions. For instance, the EY SEAM tool, powered by IBM Maximo Application Suite, enables organizations to capture and calculate carbon emissions data, ensure regulatory compliance, and set actionable targets.
In Jan. 2022, IBM acquired Envizi, a provider of data and analytics software for environmental performance management, marking a significant step in the company's commitment to bolstering AI-powered solutions for sustainable operations and supply chains. Envizi's user-friendly dashboards enable companies to analyze, manage, and report on environmental goals, thereby streamlining Environmental, Social, and Governance (ESG) reporting initiatives. This integration facilitates a seamless flow of information between corporate environmental initiatives and daily operational activities, enhancing scalability and decision-making capabilities.
By leveraging Envizi alongside IBM's suite of AI-powered software, companies can optimize critical aspects of their operations:
IBM Maximo asset management solutions extend the life of critical assets and reduce environmental impact through intelligent asset management, monitoring, predictive maintenance, and reliability.
IBM Sterling supply chain solutions enhance visibility, minimize waste, reduce carbon footprint, and ensure responsible sourcing through blockchain technology.
IBM Environmental Intelligence Suite assesses and plans for environmental impacts on operations, assets, and supply chains using advanced AI and weather technology.
Envizi's software, available as a SaaS solution in multi-cloud environments, boasts a client base including Microsoft, Qantas, CBRE, Uber, abrdn, and Celestica, with applications across various industries.
Integrating Envizi
IBM aims to address the fragmented nature of sustainability data by integrating Envizi's software, which automates the collection and consolidation of over 500 data types, with its existing AI-powered solutions.
Pledge \ Logistics: Supply chain emissions contribute significantly to total greenhouse gas emissions for large and medium-sized businesses, with the logistics industry responsible for 11% of global emissions. Pledge successfully raised $10 million in Series A funding, in May 2023, to further advance their accredited tools, such as Clarity™ and Accuracy™, targeted at supply chain leaders and freight forwarders. Pledge is accredited by the Smart Freight Centre (SFC) for its adherence to the Global Logistics Emissions Council (GLEC) framework, a globally recognized methodology for calculating greenhouse gas emissions in logistics, and is collaborating with industry associations such as WCAworld and BIFA.
The funding round is led by Zinal Growth, with participation from new investors like Base Partners and Ace & Company, alongside existing investors, Lowercarbon Capital and Visionaries Club, that are also increasing their investment.
Carbon Maps \ Food: Carbon Maps is developing a software-as-a-service platform focused specifically on the environmental impact of the food industry. Unlike many other startups in the carbon accounting sector, Carbon Maps concentrates on a single industry, aiding companies in calculating their environmental footprint at a product level. In Dec. 2023, the company secured funding from investors such as Daphni, after previously raising €4 million from Breega and Samaipata. Carbon Maps adheres to established guidelines from organizations such as GHG Protocol, IPCC, ISO 14040, and 14044, considering carbon emissions across scopes 1, 2, and 3. Key clients include Andros, Sodexo, Potel & Chabot, the Bel milk producer’s association, and Foodles.
AI | Microplastics
Researchers at the University of Waterloo in Canada have devised a novel approach employing advanced spectroscopy and artificial intelligence to detect microplastics in wastewater. Through training a model named PlasticNet, these scientists have enabled it to discern microplastics by analyzing their absorption and transmission of various light wavelengths. Impressively, the tool accurately classified 11 prevalent types of plastics with over 95% accuracy, indicating its potential utility for wastewater treatment facilities and food manufacturers in microplastic identification. Presently, the research team is dedicated to enhancing the model's speed and efficiency while also streamlining data collection procedures.
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