By Faridat Salifu
In a bid to achieve net-zero carbon emissions by 2030, Daria Saharova, Managing Partner at VC World Fund, has emphasized the urgent need to significantly increase investments in climate technology by 590 percent.
VC World Fund is a leading European venture capital firm which specializes on climate technology.
Despite European funds, including the UK, managing €19.6 trillion ($21.1 trillion) and investing €19.6 billion in 2022, Saharova stresses that these numbers fall short and advocated for an annual investment of at least €1 trillion to meet the goal.
Highlighting Europe’s leadership in climate technology innovation, the climate tech expert revealed that 28 percent of global patents in this sector originate from the region.
She further emphasized the pivotal role in developing necessary technologies.
However, Saharova identifies a critical misalignment between venture capital investments and emissions distribution.
She notes that while 48 percent of VC funding in 2022 was directed towards mobility technology, accounting for only 15 percent of emissions, essential yet underfunded sectors like manufacturing, food and agriculture, and the built environment are neglected.
This discrepancy results in 85 percent of emissions receiving only 52 percent of financial support.
Saharova underscored the limited impact of individual behavior change, attributing a mere 4.3 percent reduction in emissions to such efforts.
With existing technologies addressing 49.8 percent of emissions, she emphasizes the necessity of investing in developing technologies to cover the remaining 46 percent.
Venture capital, historically cautious due to past failures, currently allocates only 13 percent of climate tech funding.
Meanwhile, World Fund’s benchmarking system, Climate Performance Potential (CPP), offers a strategic approach to assessing startups’ emission reduction potential and market influence.
By focusing on technological solutions, CPP aids in predicting the success of climate-effective initiatives, providing a valuable tool for both private and public investors.
In conclusion, Saharova calls for increased capital investment in alignment with emissions distribution while advocating for a technology-centric evaluation approach to drive successful climate innovation.