• The First Movers Coalition, a public-private partnership to decarbonize hard-to-abate sectors, has announced an expansion, with more companies and countries on board.
  • Two new sectors – aluminium and carbon dioxide removal - were also launched during a press conference at the World Economic Forum’s Annual Meeting.
  • More than $85.7 billion was invested in climate tech between October 2020 and September 2021, according to PwC.
  • US Special Presidential Envoy for Climate John Kerry said the technology being invested in by the coalition would encourage others to accelerate progress to meeting climate goals.

More than 50 companies and nine countries - representing more than 40% of global GDP - have committed to clean up the world’s most carbon-intensive industry sectors through purchasing power and policy for low-carbon technology.

First Movers Coalition: on the move for clean energy technologies

The First Movers Coalition, launched by the World Economic Forum and the US Special Presidential Envoy for Climate John Kerry at COP26, has expanded from an initial 35 companies to 55 companies, with a collective market value of about $8.5 trillion.

They aim to jump-start the market for low-carbon technologies by committing to purchasing a percentage from suppliers using near-zero or zero-carbon solutions, despite paying a premium.

India, Japan and Sweden join the US government on the Steering Board of the Coalition, while Denmark, Italy, Norway, Singapore and the UK have all committed to policies that will commercialize the green technologies these companies commit to purchasing.

Technologies essential to limit global warming

Two new sectors were also launched by the First Movers Coalition at a press conference at the Forum’s Annual Meeting in Davos: carbon dioxide removal - technologies the Intergovernmental Panel on Climate Change (IPCC) says are essential to limiting the global temperature rise to 1.5?C - and aluminium.

These join aviation, shipping, steel and trucking that were launched in Glasgow at COP26 - and which, together with other heavy industry, are responsible for 30% of global emissions.

Speaking at the press conference, John Kerry said the initiative would “kick everybody into a higher gear” to meet climate pledges made in Glasgow.

John Kerry and Bill Gates pictured at Davos 2022, during the First Movers Coalition expansion announcement.
“The greatest disrupter of business will be climate crisis if we don't move fast enough", John Kerry, during the First Movers Coalition expansion announcement.
Image: World Economic Forum/Mattias N

“The IEA made it clear that after we left Glasgow with 65% of global GDP committed to plans that legitimately hold the earth's temperature increase at 1.5C degrees, then we have to bring the other 35% on.

“These technology steps that everybody is taking here will encourage and make it easier for those other countries and companies to be able to make the decision to come on.

“The marketplace is going to do this. It's not going to happen by government decree. It's going to happen because people are going to see there's a demand for this. Citizens all around the world want a better life. They want clean air, they don't want drought, and fires and floods and storms and the threat of massive sea level rise.

“The greatest disrupter of business will be climate crisis if we don't move fast enough. And the greatest risk for business is not the risk of putting their money into this, it's the risk that comes with not doing enough, with not investing.”

Harnessing value chains to reduce the ‘green premium’ of innovative tech

The First Movers Coalition was inspired by the success of advance market commitments in driving innovation in other fields, from life-saving vaccines to commercial spaceflight.

Today’s most commercially competitive clean energy technologies, such as renewable wind and solar energy, are decarbonizing the electric power system; but on their own they cannot clean up steelmaking, shipping, aviation and other hard-to-abate sectors.

The necessary technological solutions – including green hydrogen produced using renewable energy, clean ammonia and near-zero carbon aviation fuels and technologies – are not yet commercially competitive. But it’s essential to bring them to market by 2030 to achieve global net-zero emissions by 2050.

First Movers Coalition is increasing investments in climate tech for a decarbonized future.
First Movers Coalition is increasing investments in climate tech for a decarbonized future.
Image: PwC

What is the state of climate tech investment?

The good news is that more than $85.7 billion was invested in climate tech between October 2020 and September 2021, according to PricewaterhouseCooper’s (PwC) most recent State of Climate Tech report.

Investment hit a record of $60 billion in the first half of 2021 - representing a 210% increase year on year.

Globally, there are more than 3,000 climate tech start-ups - and investment in clean tech represents 14 cents of every venture capital dollar.

How can digital technologies help deliver the climate goals?

Global net zero commitments from businesses and governments are projected to decrease GHG emissions by 7.5% by 2030 – we need 55% to meet global goals. Filling this gap will require rewiring high emitting sectors around efficiency, circularity, and sustainability.

Research from the World Economic Forum's Digital Transformation Initiative and Accenture estimates that digital technologies, if scaled, can deliver up to 20% of the reductions we need by 2050 in three high emission industries: energy, materials, and mobility. Depending on how quickly digital technologies are adopted, these industries can realize between 4 and 10% emissions reduction by 2030.

Four different clusters of digital technologies can work together to decarbonize business operations and value chains:

1. Foundational technologies such as big data analytics

2. Decision-making technologies such as AI/Machine Learning and Digital twins

3. Enabling technologies such as cloud, 5G, Blockchain and Augmented Reality

4. Sensing and control technologies such as Internet of Things (IoT), Drones and Automation

To inspire more adoption and collaboration, the Forum is also curating an inventory of leading examples from partner companies that have implemented digital technologies to reduce their carbon footprint and deliver economic growth.

If your organization is interested in adopting digital technologies for climate action, Join the Forum’s cross-industry Digital Transformation community.

And the size of the deals is growing too, nearly quadrupling in H1 2021 as megadeals become increasingly common, says PwC.

“Technology is not the answer, it’s the amplifier of intent,” says the report’s co-author Leo Johnson. “And climate tech alone is not the panacea, but it’s a space that is emerging rapidly as a critical mechanism to bend the emissions curve down and get the world back on track towards 1.5°C.”

Where’s all the venture capital investment going?

climate tech investment First Movers Coalition
US Special Presidential Envoy for Climate John Kerry said the technology being invested in by the First Movers Coalition would encourage others to accelerate progress to meeting climate goals.
Image: PwC

Of the 78 climate tech unicorns that now exist - privately held start-ups valued at more than $1 billion - the majority (43) are in the Mobility & Transport sector.

The remainder are split between Food, Agriculture and Land Use (13) Industry, Manufacturing and Resource Use (10) and Energy (9).

Two-thirds of the overall funding between October 2020 and September 2021 - some $58 billion - went into Mobility & Transport, with more than a half going into electric and low greenhouse gas emissions vehicles.

But there’s been ’significant growth’ in the hard-to-abate Industry, Manufacturing and Resource Use area, which almost quadrupled the funding it attracted in the same period to $6.9 billion.

Around two-thirds of the climate tech funding went to start-ups in the US - $56.6 billion - while Europe attracted $18.3 billion and China saw $9 billion.

Closing the funding gap: the future for climate tech investment

PwC found there’s huge untapped potential to shift capital to areas that would have a greater impact on mitigating the climate crisis.

Of the 15 areas of climate tech analysed, the five representing the vast majority of future emissions reduction potential (80%) received just a quarter of the investment between 2013 and H1 2021.

As the chart below shows, Mobility & Transport received 61% of all investment funding, while representing just 16% of global emissions.

The Built Environment, meanwhile, receives just 4% of funding while its contribution to emissions is 21%.

A chart showing how global climate tech investment compares to global emissions across sectors. First Movers Coalition
How investment compares to emissions.
Image: PwC

PwC says more funding is needed “across all challenge areas to enable breakthrough innovations and trigger sectoral tipping points, whilst also supporting commercially ready technologies to scale up over the next decade”.

Early-stage venture capital investors need to be more patient with capital to deliver future breakthroughs, while more targeted policies from governments will kickstart investment in hard-to-abate sectors, such as building materials, as well as carbon removal technologies.

And that’s just what the First Movers Coalition is hoping to achieve.