Growth
The climate capital stack and new funds
- Growth
- Report
- 5 minutes read
Key findings
- The amount of investable capital reached $86bn with funds deploying more slowly and with more discipline than in previous years.
- Total AUM raised for climate tech since 2021 hit $164bn in 2024, an increase of 20% in new AUM compared to last year.
- The majority of the $47bn new AUM closed in 2024 were in growth and infrastructure funds.
- Infrastructure funds now make up nearly 60% of the dry powder in climate tech, suggesting investors are looking to large-scale, lower-risk projects in mature climate sectors.
Reaching net zero will require rapidly scaling existing solutions, while helping to seed the nascent technologies that will be vital to the transition. According to the International Energy Agency, 35% of the emissions reductions needed by 2050 will come from technologies not yet at commercial scale1.
The growing adoption of first-generation climate tech, from solar, wind and batteries to EVs, shows what is possible. The next generation of climate tech will be critical to help decarbonise energy, mobility, industry, food and land use, and the built environment. Innovation finance will play a vital role in supporting pioneers to demonstrate technology feasibility, to scale and accelerate commercial adoption, and to grow internationally.
Catalysing these innovations, and the new and evolving sectors and ecosystems they depend on, won’t be a linear process. Finance must be ready to adapt and seize opportunities as they emerge. That’s why HSBC Innovation Banking has sponsored a report by Sightline Climate that explores the latest data and trends from 2024 on the different types of capital available in the climate tech landscape.
The report, titled The Climate Capital Stack and New Funds, has found a 20% year-on-year increase in amount of capital for climate tech investment despite a challenging backdrop of rising interest rates and increased scrutiny on valuations. And the findings suggest an industry showing signs of maturity, with a diverse and more complex capital stack for stakeholders to navigate and leverage.
Bailey Morrow | Head of Climate Technology"It's encouraging to see the different financing options available to climate tech start ups. Collaboration between capital allocators will be key to embracing"
About Sightline climate
Sightline climate's climate tech market intelligence platform was founded to accelerate the deployment of emerging climate tech solutions through industry-leading data, analytics, and research. All of the funds data behind this report is live and updating on the Sightline Climate platform, providing investors, corporates, and governments with the data and insights they need to confidently build and finance the new climate economy.
This report was sponsored by HSBC Innovation Banking. This material including, without limitation to the statistical information herein, is provided for informational purposes only. The material is based, in part, on information from third-party sources that we believe to be reliable but, which have not been independently verified by us and, for this reason, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction.
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