Skip to content Skip to Search
Skip navigation

Europe’s heatwave is wake-up call to invest now in climate solutions

Whether for environmental reasons or purely a business transaction, investors must fund green technology

Reuters
Wildfires rage as parts of Europe battle its record heatwave

This morning I was talking to my dear friend Abdullah at Seedra Ventures, one of Saudi Arabia’s top venture capital firms. We discussed how locals were returning to Riyadh earlier this summer, ready to start businesses. 

Wildfires and heatwaves across Europe have made the traditional western summer haven for GCC citizens a less tempting offer in 2022. 

We joked about how we should have built a company creating tours to countries with more amenable climates, with South Africa being one that is currently in winter. 

As Andrew Woodman wrote in PitchBook’s Weekend Pitch, “Nothing screams ‘climate emergency’ quite like seeing smoke billowing down your street – in 104-degree heat – as three wildfires rage within a mile or so of your home.” 

I am writing this column in my home office in London, with my doors and windows open as wide as possible to catch the lightest breeze. 

This summer scorching temperatures have damaged homes, roads and railways, and fires have raged all across Europe. 

With funding available and the impacts of climate change increasingly being felt, we are in a time of what I believe will be significant change – an awakening of sorts. 

My hope is that the challenges experienced this year will give birth to a new generation of climate change tech enthusiasts who will innovate and find solutions to reverse the damage.

According to PitchBook’s first quarter 2022 Global Private Fund Strategies Report, fund managers have around $3.2 trillion in committed but unallocated capital at their disposal and $9.9 trillion in overall assets under management. 

To give you some idea of tangible impact, global sea levels have risen eight or nine inches since 1880, a process that is rapidly accelerating, threatening to take underwater major global cities like Jakarta, Lagos and Miami. 

According to the National Oceanic and Atmospheric Administration, in 2021 the US experienced 20 weather and climate disaster events with losses exceeding $1 billion each. 

Over the past five years the US has experienced $750 billion in total damages from extreme weather events. Soon, some parts of the planet will become uninhabitable. 

If not killing us, we are losing the beauty of our world: coral reefs are at risk of severe degradation by 2100, with a 1.5°C increase in temperature resulting in 70 percent loss. With 2°C of warming, nearly all coral reefs will be lost.

Legendary venture capitalist Chris Sacca, who is well-known for his investments in major tech giants Twitter and Uber, wrote in August 2021 after closing Lowercarbon Capital’s $800 million fundraising to support the launch of four new climate tech funds: “There has never been a better time to start a company focused on emissions reduction or actively removing carbon already in the atmosphere. 

“There is massive unmet demand for climate investments, and humanity’s only shot is if we get as many people and as many resources focused on solutions.

“The total addressable markets are literally the biggest in history and we have no doubt that multi trillion-dollar market caps are just up ahead.” 

According to PwC’s State of Climate Tech report, the first half of 2021 set a record for climate tech investment, with in excess of $60 billion raised by more than 600 such startups. 

Between 2013 and 2021 there has been roughly $222 billion of investment into the space through more than 3,000 identified climate tech startups. Of every $1 of venture capital investment, roughly $0.14 currently goes to one. 

The crowdsourced funding platform Indiegogo, meanwhile, reported that greentech fundraising efforts raised 282 percent more money in the first half of 2021 than in the same period in 2020.

Sacca acknowledged that raising for a climate fund amid an unprecedented heatwave had probably worked in the company’s favour. A similar impetus might be seen in Britain – and as Abdullah and I discussed – in the Middle East too, in the coming months.

However, Sacca added that investors that don’t care about the environment but like to chase financial returns had also supported his fundraising.

“Of course, that’s part of our underlying thesis: massive change will happen because these types of investments will pay off for sheer business reasons alone.

“Thus, for everyone emotionally unburdened by the existential crisis facing all living things on the planet, welcome!”

Romanna Dada is head of venture funds at Brinc MENA

Latest articles

Qatar Rwandair

South African Airways denies talks with Qatar Airways

South African Airways has denied it is talking to Qatar Airways about an equity injection, as observers suggest RwandAir is the Qatari carrier’s most likely target. Qatar Airways’ CEO Badr Mohammed Al Meer set rumours racing earlier this month when he revealed that the state-owned airline was “at the final stage of an equity investment” […]

The twisted Cayan Tower in Dubai Marina is among Drake & Scull's projects

Drake & Scull International shares up by 24% as trading resumes

Shares in Drake & Scull International rose by 24 percent on Wednesday as the troubled contractor resumed trading on Dubai Financial Market following a six-year suspension. DSI stock ended Wednesday at AED0.31, having started the day at AED0.25 – the price at which it sold AED450 million ($123 million) of shares earlier this month as […]

Emirates Airline cabin crew. The Investment Corporation of Dubai owns the airline and has a significant stake in Dubai's biggest bank Emirates NBD

Dubai wealth fund reports record net profit for second year running

Investment Corporation of Dubai, the Dubai government’s main investment unit, has reported a record annual net profit. Earnings were bolstered by higher interest rates and a resurgent aviation sector. ICD owns Emirates and FlyDubai airlines, travel agency Dnata, Emirates National Oil Company (Enoc) and stock exchange operator Borse Dubai.  It also holds sizeable stakes in […]

United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan, South Korean President Yoon Suk Yeol and his wife Kim Keon Hee watch the Black Eagles, the aerobatic team of T-50 jets belonging to South Korea's air force, during a welcoming ceremony at the Presidential Office in Seoul on May 29, 2024. JUNG YEON-JE/Pool via REUTERS

Trade deal signed during UAE state visit to South Korea

The UAE has signed a trade agreement with South Korea during a two-day state visit by the Emirati president, Sheikh Mohamed bin Zayed Al Nahyan, that has resulted in deals worth billions of dollars being struck between the two countries. The UAE has become the first Arab country to formally sign a comprehensive economic partnership […]