As climate change challenges intensify, global investors are grappling with how to fund solutions and companies that address emissions reduction and climate resilience. PwC’s latest State of Climate Tech report, released last month, reveals key differences between global and Australian investing behavior. It sheds light on shifting behaviors, emerging opportunities and untapped potential. Among the key findings, Australian investors stand out for their resilience but also for gaps in areas like AI-driven innovations. In this article, we explore these trends, the differences between global and Australian markets, and the opportunities for Australian investors to create greater value through 2025.
Report scope:
Global: 52,000+ deals; US$600bn+ of investment
Australia: 1000+ deals, US$27bn+ of investment
1. Investment levels: Australia trumps
Over the past year, as higher borrowing costs and uncertain economic conditions weighed on the broader deal-making market, climate tech investment has declined. Globally, climate tech financing dropped 29%, bringing it below pre-2019 levels. In Australia, however, investment remained more resilient, with only a 12% decline in the same period and staying above 2020 levels, reflecting a stronger local market.
In fact, 2024 investment into climate tech startups from Australian investors is $237m more than it was in 2022, compared to the global slump which has seen a $60bn decline in investment worldwide. Given the number of deals has declined, this could reflect a strategic shift by Australian investors toward fewer, larger deals to de-risk with a real focus on returns.
