Consumers Want Companies to Invest in Climate Tech
At a time when only 29% of U.S. consumers say tech companies have a mostly positive impact on the environment, climate tech is emerging as an area that people want companies to invest in.
Power grid improvements, solar energy production and decarbonization of the atmosphere have emerged as the top areas where consumers say investments should be prioritized.
But it will take more than tech to save the world from climate change. Recent partnerships across tech, energy and government show promising developments in this space, and it will require continued joint efforts to scale climate tech.
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Climate tech is emerging as a space where innovative technologies may help mitigate the effects of climate change — or even reverse them, depending on who one talks to. This corner of tech saw sizable investment late last year and at the start of 2023, before slowing down recently.
Saving the planet is reason enough to invest in technologies that will help us avert the worst effects of climate change, though investments currently aren’t happening with the level of urgency and intensity required to meet the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius.
A recent Morning Consult survey shows that two-thirds of U.S. adults are concerned about climate change — about the same as the share who say they’re concerned about political polarization in the country (67%) — and there is an appetite for investment in specific climate technologies. A Morning Consult report from last summer showed that consumers expect tech to lead the way on innovation in sustainability, and investing in climate tech is one way for tech companies to make good on their ambitious sustainability goals.
Positive perceptions of tech companies’ impact on the environment are down, but people still turn to tech for answers
Tech’s perceived positive impact on the environment has declined somewhat since July 2022. This is particularly the case among Gen Zers: 15% say tech’s impact on the environment is mostly positive (down from 27% in July of last year), while 29% say it is mostly negative. These sentiments are likely tied to a rough several months for tech in which overall favorability and trust in the industry diminished, as explained in our most recent State of Technology report. When trust and reputation fall, so too do brand perceptions, including how people perceive a company’s impact across the board.
That being said, people largely agree that tech has an important role to play in innovating sustainability practices, and the opportunity for tech to invest in this space is rendered all the more important by declining perceptions of the industry’s impact on the environment. Over 2 in 5 adults (42%) say major technology companies have “a lot of responsibility” for driving innovation in sustainability, just behind energy companies and the federal government. Interestingly, tech startups — the source of many exciting innovations in this space — and venture capital — where the money comes from — sit lower on the list.
Another factor to consider when discussing investments in sustainable solutions is the politicization of climate change in the United States. The issue is much more concerning to Democrats (84%) than it is to Republicans (45%). Democrats also tend to be more concerned about the impact of companies on the environment (81%) than Republicans (54%). That said, energy companies, the federal government and major technology companies are seen by Democrats and Republicans alike as the three entities with the most responsibility for driving sustainability innovation.
Making climate tech happen will take a village
Major tech companies can drive innovation in sustainability through their own venture capital arms or through acquisitions of startups, with the latter capable of helping bigger companies scale up or integrate the acquired tech into their products, services and operations. Not only do the power players have an opportunity to drum up excitement around climate tech by putting it front and center, but they also get the added PR benefit of convincing people that they’re climate advocates.
As a catch-all term, “climate tech” encompasses many technologies, from generating clean energy to scrubbing the air of carbon (and even repurposing it for energy or useful products like concrete). Of a long list of climate tech applications, consumers feel that power infrastructure improvements, solar energy production and the removal of carbon dioxide from the atmosphere should be top priorities for investment.
Of those three, carbon sequestration is the most experimental climate tech area, and has not yet been deployed at scale. However, at our current pace of emissions reductions, this technology may prove essential for hitting climate goals, and less of a last-ditch solution.
Moving climate tech forward will likely take a concerted and collaborative effort from technology companies, financial institutions, government and energy companies. But how each is best suited to help is subject to debate.
Consumers say tech companies should be the most responsible for investing in electronics recycling, electrification of vehicles and AI optimization in energy production. For energy companies, the expectation is that they should shoulder most of the responsibility for energy production, power grid improvements and decarbonization. Finally, consumers want the government to bolster cities against the effects of climate change (such as infrastructure improvements to reduce flooding risks), as well as reduce emissions in agriculture and develop water desalination technology.
Though the pace of large-scale climate deals has slowed down recently, it is encouraging that efforts are still being made in this space, and the importance of climate tech innovation is still moving some to act across industries and sectors. More than 20 venture capital companies managing over $60 billion in combined assets recently formed a coalition called the Venture Capital Alliance. Backed by the United Nations, its purpose is to fund climate tech innovation. In an environment where raising venture capital has become more difficult, other climate tech companies are seeking Department of Energy grants and partnering with energy companies to further develop their products.
Tech has an important role to play in mitigating the worst impacts of climate change, but it will take a true partnership across tech (big and small), energy and government, plus the right financing, to see measurable change.
Jordan Marlatt is a lead tech analyst on the Industry Intelligence team, where he conducts research, authors analyst notes and advises clients on emerging technologies and trends. Jordan previously served as chief of staff to Morning Consult’s president and co-founder, and opened and oversaw Morning Consult’s San Francisco offices, onboarding and consulting for the company’s largest technology clients. He graduated from The George Washington University with a bachelor’s degree in international affairs and political science. For speaking opportunities and booking requests, please email [email protected].