Barclays’ Climate Arm to Invest £500m in Climate Tech by 2027

• Barclays supports more climate tech startups with a £500 million investment by 2027.
• Climate tech firms fail to attract venture capital investments because they operate in a high-stakes environment.
• Investors are dubious about claims made by UK banks, following reports of their recent interests.

The UK's banking giant Barclays announced that it will invest £500 million in climate tech startups by 2027 through its Climate Ventures arm and has already invested £203 million in climate technology companies globally since 2020.

Barclays' Climate Ventures arm invests in early- and growth-stage firms that develop climate solutions, such as renewable energy and clean technology, to fight climate change and mitigate its impact.

The bank said that investing this money has also helped unlock an additional £305 million from other investors, catalysing over £500 million in total climate tech investments in just five years.

READ MORE: Climate Technology: The Path to Net Zero and Sustainability

On average, every £1 invested has brought in another £2.18 from other investors, claims the bank. This will give a much-needed boost to clean technology companies, as they often face hurdles in raising money owing to huge initial investments as well as a long time to reap profits, affecting their morale.

Steven Poulter, the head of Climate Ventures, said they are trying to fill the ‘missing middle’ of financing. Many climate and green ventures do not attract funding because venture capitalists are not prepared to take on the high risks involved in investing in these startups.

On the other hand, Barclays sees an opportunity in climate technology, as it is the need of the hour in the world’s fight against the climate crisis.

However, a recent report published by climate think tank InfluenceMap notes that the bank has pumped more money into fossil fuel companies than into green ventures, despite its public commitment to reaching net zero goals by 2050.

ALSO READ: ESG Startups Captured 41.5% of Early-Stage VC in Australia in 2024

InfluenceMap’s report also said that the UK’s top financial institutions, including Barclays and HSBC, have been lackadaisical in stopping funding for fossil fuel assets. The report warns that they may face financial risks from fossil fuel investments (called ‘stranded assets’), meaning these assets might lose value if global climate policies establish a stranglehold in the future.

The study also urges them to focus more on green technologies that align with climate goals.

Ends/

Are you looking to scale up sustainability in your business operations? Explore our ESG Marketplace, where you can find more than 700 ESG and sustainability providers offering a wide choice of services.

Follow KnowESG's Sustainable Finance News for regular news and views.

Check out KnowESG's latest ESG Events updates

Source: BusinessGreen