New report calls for urgent action to accelerate pace of investment in Irish climate tech.
There is growing confidence in the Irish climate tech sector but urgent actions are needed if the sector is to thrive.
That’s according to ‘The Irish Climate Tech Opportunity 2023’ report published tby PwC and SustainabilityWorks.
“If Ireland truly wants to be part of the Climate Tech innovation wave, the time is now”
Climate tech is defined as technologies that are explicitly focused on reducing greenhouse gas emissions or addressing the impacts of climate change.
Dynamic young sector
The report highlights 36 innovative Climate Tech companies, confirming a thriving and dynamic climate tech sector in Ireland with a track record of success. The combination of market opportunities, supportive policy and research as well as the availability of capital has allowed an innovation ecosystem to emerge in Ireland, but the report highlights the need for further action.
One country that Ireland can learn from is Denmark. Denmark’s ‘State of Green’ initiative has created a strong identity and brand in climate tech innovation, seamlessly connecting entrepreneurs, corporates, regulators and investors. Since 1996, Denmark has more than halved its CO2 emissions which puts paid to the myth that economic growth requires a corresponding increase in energy use and associated emissions.
“The report concludes that while Ireland’s Climate Tech ecosystem is a hotbed of activity with lots of innovation, there is potential to do more,” said David McGee, Leader, PwC Ireland ESG Practice and co-author of the report.
“But this needs significant investment. As society continues to grapple with how to halve emissions by 2030, more investment is needed into the Irish Climate Tech sector – not just at the top level, but with better spread across sectors and solutions, across different start-up sizes and across different technological maturity levels. This includes nurturing development opportunities in offshore renewable energy and the decarbonisation of heat as well as transition technologies, such as carbon capture ready to scale up.”
Global trends are positive, showing that more investment in climate tech that will cut greenhouse emissions is expected. PwC’s latest global State of Climate Tech report reveals encouraging signs that investors, policymakers and other stakeholders remain eager to accelerate climate tech development, despite the declining venture capital market. For example, the report highlights that climate tech investment makes up an increasing share of global venture capital funding – with more than a quarter of every global venture capital dollar going into climate tech in the 12 months to Q3 2022.
“As a leading innovation hub, Ireland knows how to create supportive ecosystems and partnerships that can incubate and accelerate innovation,” said Aideen O’Hora, Co-Founder, SustainabilityWorks and co-author of the report commented.
“This report includes a snapshot of 36 Irish Climate Tech companies who are leading examples of a vibrant and extensive sector. But if this sector is to survive and thrive, more focused policy, initiatives and funding are needed. The urgency of the climate crisis means that more must be done and at an accelerated pace so that Ireland’s Climate Tech sector can flourish and fully leverage its potential. The urgency of climate change means it is now or never. If Ireland truly wants to be part of the Climate Tech innovation wave, the time is now.”
Urgent actions for a supportive climate tech ecosystem
A supportive ecosystem will be key to the success of Ireland’s Climate Tech sector. Specifically, the report calls for three urgent actions to accelerate the pace of innovation in Ireland’s Climate Tech sector:
- A one-stop-shop to foster greater interaction and innovation: Initiated by the Government of Ireland but supported by the private sector, Ireland needs an equivalent of the initiative of the Danish Government, “State of Green”. To bring the opportunity to the next level, this would create a one-stop-shop for the entire Irish Climate Tech ecosystem, allowing entrepreneurs, regulators and investors to come together while providing a showcase for customers.
- Stronger demand signals: To create greater urgency, there needs to be stronger signals to the market to act now. This includes both stronger government signals through climate and carbon policies, incentives and green procurement as well as companies developing plans to act on their decarbonisation commitments.
- More capital: The sector in Ireland needs unhindered capital flows of all types. This includes more public and private capital that is both long and short term in nature.
Commenting on the publication of the report, Mark Christal, divisional manager for Food and Sustainability, Enterprise Ireland, said: “This report provides an insight into the thriving climate tech ecosystem in Ireland and the strength of the dynamic Irish companies operating in this sector, which are providing innovative solutions and technologies. The report also highlights the opportunities that exist for these Irish companies across a range of sectors and how they can contribute to the whole of society challenge of reducing our emissions and decarbonisation.
“Sustainability is a key pillar in Enterprise Ireland’s strategy Leading in a Changing World 2022-2024, and we are working with companies across all sectors to achieve the targets set out in the Government’s Climate Action Plan, with a range of supports available to assist Irish enterprises on their decarbonisation journeys.”