In this context, a net-zero tech firm is a company focused on engineering solutions for offsetting CO2 emissions. The valuation of these companies rose from £17.8bn in 2020 to £34.8bn in 2021, according to Tech Nation’s Net Zero 2021 Report.
The sector has been bolstered by the arrival of 10 new companies in the past year, but the hike in value was driven by funding rounds and stock market listings at established companies. For instance, Arrival, the UK-based EV manufacturer, saw its valuation rise to £11.3bn after being listed on the Nasdaq in March for £9.5bn in a record floatation for a UK tech company. Octopus Energy, meanwhile, saw its value rise to £3.6bn after a funding round in September while going public boosted energy storage firm ITM Power to a valuation of £2.1bn.
The huge growth in valuations of UK net-zero companies is largely due to existing companies acquiring the coveted $1bn (£730m) ‘unicorn’ status.
London alone accounted for 72 per cent of all venture capital investment in net-zero companies in the UK. These companies are creating a growing number of jobs in the UK, with net-zero employment growing by 33 per cent between 2020 and 2021, to over 23,000.
The UK ranks fourth globally for investment in net-zero technology, after the US, China and Sweden. Sweden topped the list of pounds invested per tonne of CO2 emitted, investing more than 10 times the amount in net-zero tech per tonne of CO2 emitted than any other country.
Overall, investment in net-zero companies grew from £1.1bn to £1.12bn in 2021, in a major slowdown on previous years. For instance, between 2019 and 2020 they saw a jump of £343m in investment.
“If these net-zero companies are to fulfil their potential to save our planet, they need more help, support and funding from investors, UK pension funds and policymakers worldwide,” Dr George Windsor, head of insights at Tech Nation, told PA.
Tech Nation called on investors and policymakers to prioritise investment in these companies, setting a target of $15bn (£11bn) by 2025.
Sammy Fry, net zero lead at Tech Nation, said in a statement: “Scaling climate tech must become a global priority. If we are to achieve net zero, it is vital that all state and non-state actors invest and support the growth of climate tech. With the value of climate tech companies almost doubling, the growth of the sector is promising, but we need to do more.
“We urge global leaders to put their support behind the sector to accelerate the net-zero transition and ensure the world realigns itself with a 1.5°C trajectory, in order to safe-guard the future of the planet.”