In the world of tech, there are so many terms that it can be hard to keep up. Fintech, HealthTech, ROI, CAC, LTV the list goes on. There isn’t enough time to explain all of them in detail, so we chose to focus on one of the most common (and arguably most important) term on everybody’s lips today, “ClimateTech”. 

We asked our friend Hayden Young, who is the Head of Marketing at ClimateTech venture capital (VC) firm, SET Ventures to break it down for us and, more importantly, why you should work in it!

Any technology that directly leads to a reduction in Green House Gases or addresses the impacts of global warming or environmental hazards can be considered “ClimateTech”.

When Hayden asked Chat GPT for a second definition (sorry I hope y’all aren’t bored to death of AI yet), it gave this answer: 

“’ClimateTech’ refers to the development and use of technology to address the challenges of climate change and promote the transition to a more sustainable, low-carbon economy. This includes technologies related to energy efficient renewable energy, carbon capture and storage, sustainable agriculture and other areas that aim to reduce greenhouse gas emissions and mitigate the impacts of climate change. 

ClimateTech also encompasses the use of data, analytics and other digital tools to better understand and respond to climate-related challenges. The goal of ClimateTech is to create innovative solutions that can help reduce the environmental impact of human activity and preserve a habitable planet for future generations.”

If you were to combine the parts highlighted in bold up there into a continuous sentence you essentially have our definition of ClimateTech and the mission of SET Ventures: “Investing in digital technologies for a carbon-free energy system”.

Even though the end goal – keeping the planet a viable place to live – is largely the same, there are some important nuances between these sectors. 

Here’s how you can differentiate between them:

• ClimateTech = solving climate change with solutions that can be quickly deployed and aim to optimise existing infrastructure. E.g. Green Eagle Solutions who are optimising existing windmills.
• CleanTech = solving climate change with new infrastructure and research heavy solutions. Typically takes longer to deploy. E.g. WorldWideWind who are building a new type of windmill.
• Sustainability = ensuring our ability to meet the needs of people today doesn’t compromise our ability to meet the needs of people tomorrow. Not solely focused on climate change (E.g. The Ocean Cleanup) but can include the above terms.

If that’s enough info for you then keep scrolling to the next section. If not, here’s some more context:

CleanTech is often the expensive, hardware heavy, long-term, R&D type of investments. What is maybe now referred to as an “infrastructure startup”. Think of a company that designs and manufactures wind turbines for example. This requires a lot of factories to build, assemble and ship the solution and therefore needs a lot of capital to get off the ground.

Julia Padberg, a Partner at SET Ventures, can give more background: “In 2007 during the first wave of investment in green technologies, the term was “CleanTech”. But, due to many investors losing a lot of money on CleanTech investments then, the term now has a negative connotation. But the market is changing and now we’re seeing a huge resurgence in technologies that are tackling climate change.”  

In sum, CleanTech is focused on the same goals as ClimateTech, but it’s the type of technology that just takes much longer to deploy in the real world. 

The term “sustainability technology” on the other hand, encompasses many things. 

A technology can be considered a “sustainable technology” when it helps the present population meet its needs without compromising the ability of future generations to do the same. Or put another way: Sustainable technology seeks to balance economic growth and development with environmental protection and social responsibility.

So, while environmental sustainability is certainly a big part of the climate change equation (think packaging companies that offer recycled cardboard vs plastic) the term “sustainability” isn’t purely focusing on climate change. 

It can be on social sustainability, where the focus is on things like equality among genders and races in the workplace or communities. Or on economic sustainability, where you focus on ensuring that economic growth doesn’t compromise the health and happiness of the citizens in that economy. 

Of course, improving human health often means improving planet health e.g. by not polluting the air with tons of coal emissions, but it’s good to remember it’s a more all-encompassing term. 

Since you’ve read this far, you must be a little Climatetech curious. However, if you need more convincing then here we go: 

First, you solve a big problem. 

By working in ClimateTech you are choosing to devote your time and energy towards solving the biggest challenge that modern humanity has ever faced. Climate change. I’m hard-pressed to find a better way to contribute to the planet than turning up to work each day to further this mission. 

Hayden’s colleague, Leonie Mekel, thinks so too: “It’s always the first thing that I mention about my work that: “we invest in technologies for the sustainable energy transition” it’s such a nice feeling working towards a common goal like this”. 

Second, ClimateTech is hot. 

The war in Ukraine saw the EU scramble to capture new energy sources meanwhile, rising sea levels are causing 1,000 year weather events to happen almost monthly. These factors mean “climate change” and “energy crisis” are words on everyone’s mind currently. 

Governments, corporations, VCs and other investors are funnelling money into climate research and technology to solve these problems. Meaning there is a ton of opportunity to grow, learn and develop in this sector.  

Hayden’s colleague, Ellen Smeele, put it best: “ClimateTech is growing so fast. I’ve seen so much opportunity to develop.  Now is the time to get involved as it’s just not a stagnating industry at all.” 

Some old words of wisdom in tech are: “fall in love with the problem, not the solution.” 

Same logic applies here. 

First, think about what part of the climate challenge you want to solve and then find the solution that’s solving it. Ask yourself:

• What part of climate change do you feel is most important to you? 
• Where can you make the biggest contribution to solving that? 

It isn’t sensible to work for a carbon capture solution if you think that cracking fusion energy is the way to tackle the problem. Hell, maybe you’re into batteries and hate the lack of available performance improvement data, I don’t know. 

The point is, it doesn’t matter what you do but more important that you are passionate about it. To quote the co-founder of SET Ventures, Rene Savelsberg “It’s gotta be in your DNA.” 

At SET, we’re focused on the energy part of the climate problem because that’s where we feel we can make the biggest impact. Everyone uses energy, everyone needs it. So, let’s make it CO2 free. 

Plus, energy remains by far the biggest reason for our warming planet (think of all the CO2 released into the atmosphere from coal and oil extraction, energy to heat and cool our homes etc.) so we feel this problem is critical to fixing our planet. 

But solving energy isn’t necessarily what everyone should be doing, the ocean needs cleaning up too after all!

Second, think carefully about what TYPE of company you want to work for. Do you want to work for a startup, non-profit or similar solving just one problem like Hydrogrid – a software platform that optimises hydropower plants? Or do you want to work for something like a VC or government entity that invests in companies solving a range of problems like SET Ventures? 

Hayden chose the VC route because he identified energy as the problem to solve and he likes seeing a range of solutions to that. But there are literally 100s of VC firms working in areas of ClimateTech and Sustainability that are doing great work. 4Impact, Climentum, Rubio, Ponooc and Kiko Ventures are just a few that spring to mind. 

There’s also 1,000s of startups, corporates, NGOs and others working on specific challenges like deforestation or sustainable agriculture for example. All of these are vying for your attention, all you need to do is take the first step. 

So, the question is, what are you waiting for?