Climate tech will play a pivotal role in tackling climate change, alongside renewable energy sources. Both can directly reduce or remove greenhouse gas emissions or improve resilience or adaption to the physical impacts of climate change.
Under the UK’s Labour government, £7.3bn has been allocated in the Treasury's National Wealth Fund to drive job creation in clean energy and fund vital infrastructure and technologies using public financing.
Barclays seeks to play a key role in supporting these technology companies scale from idea to IPO through its Climate Tech Escalator, a connected pathway across Barclays which can include equity investment.
As part of our In the Field series, Barclays’ Daniel Hanna, Group Head of Sustainable and Transition Finance, visited Sustainable Ventures, Europe’s leading climate tech cluster, to meet climate tech founders and hear about Sustainable Ventures’ growth plans, enabled by Barclays Climate Ventures’ investment.
CEO of Sustainable Ventures, Andrew Wordsworth shared with us his outlook on the UK’s climate tech ecosystem:
1. The climate tech sector will continue to evolve.
Historically, climate tech entrepreneurs have predominantly focussed on mitigation solutions. With the effects of climate change, from flooding through to wildfires, becoming more apparent every year, adaptation and resilience solutions, as well as climate and nature repair such as greenhouse gas capture and biodiversity, will attract a growing share of investment and customer demand.
2. Increased integration of AI
In 2024, just under 10% of climate tech investment went into AI – although most of this was pure play software. Increasingly, traditional climate tech companies – i.e. those producing a hardware product – will begin to realise the potential of AI to create additional revenue streams, attract new investors and improve operational efficiencies.
3. Corporates will become increasingly important for the sector.
With 64% of the largest European corporates now having full net zero targets across Scopes 1-31 and with public funding in high demand, we expect to see more collaborative initiatives.
Policy recommendations
Through working with climate tech founders at the frontline of innovation, the ‘missing middle’ of financing they experience has been stressed, particularly at Series B+/ growth rounds. This is characterised by the growth stage at which climate tech companies require investment of high initial upfront costs and long timeframes to profitability, further challenged by being too large for infrastructure funds but too small for venture capitalists.
To address this ‘missing middle’ financing gap, Barclays made four recommendations addressed to the UK government in its ‘Scaling growth stage climate tech companies’ report.
About Sustainable Ventures
Sustainable Ventures is a full-service ecosystem helping climate tech startups and entrepreneurs to scale through investment, workspaces and venture support. They have built Europe’s leading climate tech ecosystem, trusted by over 800 startups to help accelerate their journey to market scale. To date, they've helped attract over £1.1 billion in private and public sector investment, and create 6,500 green jobs, accelerating the transition to a more sustainable future. Barclays Climate Ventures made an equity investment in Sustainable Ventures in 2023 to support their UK expansion, including their office in Manchester, which opened in 2025.
Barclays currently provides support to sectors that significantly contribute to global greenhouse gas emissions, including the oil and gas sector. Barclays is working to reduce the emissions it finances; for more information on our strategy, visit home.barclays/netzero
Footnotes:
- Accenture, Destination Net Zero report, November 2024