Recently, I had the privilege of speaking at the LGT Climate Conference, where Al Gore delivered an impassioned reminder that the science hasn’t changed, but the urgency has intensified. He spoke with the same conviction he brought to his early climate advocacy two decades ago, when an Inconvenient Truth first brought so much attention to the issue. But this time the message landed differently. The evidence is no longer theoretical. We’re living it; from record heat and wildfires to mounting pressure on water systems and energy infrastructure.

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For investors, that reality is both confronting and catalytic.

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The challenge has never been clearer, and the opportunity has never been greater.

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The need is real and so is the market

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The physics of climate change are non-negotiable. Emissions are still rising, and the impacts are accelerating. What has changed, and what makes this moment so compelling, is that the solutions are now commercialising at scale, and we have seen that economics will win out.

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Solar costs have fallen by over 90% in the past decade, repeating the same almost unbelievable reduction of 90% in the decade before.  Batteries are following a similar cost curve, making firmed renewables the cheapest low-cost generation in the world. In the first half of 2025, renewable energy generated more power than coal globally. Electrification is spreading into transport, heating, and manufacturing.

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Meanwhile, the capital markets are maturing. Despite political noise in the United States and elements of the Inflation Reduction Act being challenged, the global capital allocation trend remains clear. Brookfield, BlackRock, KKR, and other long-term investors that have investment horizons longer than a political cycle are still investing billions of dollars on decarbonisation infrastructure because they see the scale of what’s coming.

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This is not a short-term trade. It is a multi-decade reindustrialisation of the global economy.

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AI, energy, and the return to fundamentals

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Much of the world’s attention has turned to AI, which has captured both capital and imagination. According to Pitchbook “AI startups accounted for 63% of venture capital investments made during the trailing 12 months.” That’s extraordinary concentration. It is extraordinary technology, but also a voracious consumer of energy. Every data centre expansion adds load to already strained power systems.

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AI is both a challenge and an accelerant for climate tech. It raises the urgency of the transition while offering new tools to optimise it. AI is also making it easier to build companies. Smaller teams can do more, faster. In climate tech, where you’re dealing with complex systems and data-rich environments, the application potential is huge, from predictive maintenance in wind farms to process optimisation in heavy industry. While some of the excitement is justified and the potential immense, a lot of others in the space don’t seem to be grounded in real fundamentals.

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The difference is that climate tech is rooted in the real economy. It is tied to electrons and molecules in energy, infrastructure, and industry. While AI valuations soar on potential, we are focusing on climate technologies that are delivering measurable results; lower costs and lower emissions.

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Headwinds create opportunity

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There is no question that the past 18 months have introduced headwinds. The current White House fossil fuel agenda and a cooling of venture exuberance have thinned the field.

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But for long-term investors, that is exactly why now is the right time to invest.

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The froth has cleared. Valuations are more rational. The focus has shifted from story to substance.

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The market is no longer driven by hype and inexperienced generalist investors dabbling in the space. The startups that remain are solving real problems for real customers.

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At Climate Tech Partners, we see this every day through our corporate network. Major energy, transport, and industrial players are no longer experimenting with decarbonisation they are budgeting for it.

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They have emissions targets, transition plans, and capital set aside to meet them. They need technologies that deliver both climate impact and commercial returns.

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This is where venture capital can play its most constructive role: connecting innovators to industries that are ready to deploy.

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The next wave: scaling

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The next phase of climate tech is about scale.

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We know what works. Now the challenge is to deploy it faster, cheaper, and across every sector. Grid optimisation, low-carbon fuels, industrial electrification: these are the “second-order” technologies that make the transition function in practice. They may not be glamorous, but they are essential.

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Australia is especially well positioned to lead this next wave. We have exceptional renewable and critical mineral resources, world class research institutions, a growing ecosystem of founders and operators, and a stable policy environment backed by more than $50 billion in public capital through the CEFC, ARENA, and the National Reconstruction Fund.

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Equally important, Australia is a unique test bed for climate tech in areas like energy and mining. We lead the world in rooftop solar deployment and operate one of the most complex energy networks globally. We also have some of the world’s most advanced and automated mining operations. The solutions we develop here to integrate renewables, stabilise grids, and accelerate the energy transition can be exported worldwide. 

We are also increasingly seeing international innovators looking to Australia as a deployment market, a place to prove, scale, and export technology.

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The combination of policy, corporate demand, and investor maturity makes this one of the most attractive times in recent history to invest in climate technology.

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Every investor is already exposed to climate risk; through energy, property, or supply chains. This transition to a low carbon economy is the next industrial revolution, one that rewards patient, disciplined investors who understand that solving climate change is the biggest growth opportunity of our lifetime.

Now is the time to be on the right side of that shift.  At Climate Tech Partners, we’re helping investors participate in this next wave of industrial transformation, where we believe solving climate change and generating returns go hand in hand.

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Join us in backing the technologies and founders building the future.

(Left to Right): Tom McQuillen, Amanda MacDonald - Head of Sustainable Investment, LGT Wealth Management, H.S.H. Prince Max von und zu Liechtenstein – Chairman of LGT Group, The Hon. Julia Gillard AC – Former Prime Minister of Australia, Michael Chisholm - CEO LGT Wealth Management, Tom Kline - General Partner, Climate Tech Partners, The Hon. Matt Kean – Chair, Australian Government Climate Change Authority