Climate tech industry needs $1.5bn over the next year: Climate Salad

The climate tech industry needs a $1.5 billion investment in the next 12 months to assist in building the high-value jobs and globally ambitious companies required to build Australia’s net-zero economy.

This finding comes from the Climate Salad 2023 Australian Climate Tech Industry Report which highlights further industry collaboration and investment is essential, especially considering the recent market downturn that has made raising capital more difficult.

Australian climate tech founders raised $553 million in 2022, up from $338M in 2021, the report noted. On average, climate tech companies grew their revenues by 88 percent over the last 12 months.

The largest sub-sectors within the Australian climate tech ecosystem are the circular economy (21 percent), data/finance (17 percent), and agri-food (13 percent).

To help reach this funding target, Mick Liubinskas, co-founder and CEO at Climate Salad told Digital Nation three ways leaders can get involved.

Firstly, investing capital directly in these companies despite the risk investment brings, especially during the current down economy.

“Investment is often a lagging indicator of a successful ecosystem. It is a bit more risk-averse than people think. But given that everybody benefits from climate solutions, investing more despite that risk makes a difference,” he said.

“There is a dual benefit of helping the environment as well as helping to create a new, vibrant industry here in Australia.”

Secondly, business leaders and government agencies should try to be a customer or partner of these climate tech companies.

“If you have customers then you typically need a bit less capital. Again, it's easy to raise capital and Australia has sometimes been more risk averse in adopting Australian technologies at an early stage,” Liubinskas said.  

“It's to our detriment of a company or country getting the benefits. It is a detriment for the companies because they have been forced to go international to get customers, which is harder.”

Thirdly, allow your employees to understand how the climate industry works.

“Invest in the education and wealth awareness first, but then education in what sustainability renewable, renewable adaptation, biodiversity natural capital is,” he explained.

“This is an enormous new industry that is much needed, but it's still forming in front of our eyes. There would be hundreds of thousands of people in great companies in Australia who are passionate and curious about this space. Giving them the opportunity to go and do that is valuable.”

Hiring spree

The report noted that 97 percent of founders are currently hiring, and there is projected to be over 5,000 people employed by climate tech companies by 2024.

Liubinskas said not only has the current skills crisis influenced this statistic but the lack of knowledge about the climate industry has swayed people from applying for jobs.

He explained that being a part of the climate tech industry does not mean everyone needs a degree in sustainability.

“What we need is great salespeople, lawyers, accountants, marketers, software developers and mechanical engineers. You don't need to fully understand the last 100,000 years of climatic change to understand that, but be passionate about it,” he said.

“One big positive is that there is a big opportunity as well. There's a big growing trend of those under a certain age that want to have a positive impact in their life as well and climate tech is an opportunity to do that.”

Climate Salad is a leading network of Australian climate technology, with over 300 companies, 100 mentors, 50 inventors and 500 supporters.