7 Climate Trends To Watch In 2023

In 2022, our team at G2 Venture Partners shared our predictions of top climate-tech trends to watch. We found the exercise fruitful so repeated it for 2023. Below is our summary:

1. Mobility will continue to be a core interest area, especially around automation and electrification. See here for our more detailed predictions in the sector.
2. Natural disaster planning and recovery will become increasingly important as the rise of extreme weather events show that mitigation alone is insufficient and adaptation must be part of our plan to address climate change. Companies focused on early warning and detection of everything from wildfires to storms, scenario planning, and post-disaster recovery will gain traction.
3. Reliability of renewable energy will be top of mind for regulators as they become a larger percentage of electricity generation, and have the potential to cause grid instability if not managed properly. Effective Load Carrying Capability (ELCC) will become an increasingly important metric when new generation capacity is evaluated.
4. How we work will continue to change as automation impacts a growing set of jobs. This, combined with recent mass layoffs, is shifting the balance of power back from employees to employers. Workplaces are equilibrating to a new normal that is not as remote-first as some expected at the height of the pandemic.
5. Government has become a major player, with more businesses in our sectors selling to government customers, and over a trillion dollars of government funding (from grants to loans to subsidies) accelerating the development and rollout of climate tech.
6. ESG regulations will start to crystallize, as regulators get more involved. Voluntary carbon accounting as we know it today will become commoditized, and focus will shift toward helping companies take the next step, creating and tracking their emissions reduction roadmaps. During this transition, companies that made overly ambitious ESG commitments may pull back on targets or push out deadlines.
7. The macro-environment will be a key driver of everything we (and others) do this year. Many of our predictions centered around inflation, interest rates, valuations, the “SPAC-lash”, crypto, China / foreign policy, and other non-climate-tech topics that will inevitably impact our business.

Finally, like last year, ending with a topic that sparks endless heated debates but where we are far from reaching a consensus: ChatGPT. We know language models (and AI more broadly) will continue to become rapidly more mainstream, impacting everything from robotics to electricity grids to supply chains, for better or for worse.

Let us know what you think — where you agree, what we missed, and why we’re wrong. And of course, we are always eager to hear from anyone building in these spaces. Our team can be reached at https://www.g2vp.com/people.