At first glance, it may seem that climate tech investment has slowed, but experts warn that right now is the ideal time to step in, as policy, technology and market conditions are converging in a uniquely favorable way. According to the International Energy Agency (IEA), if countries meet their climate commitments, global emissions by 2040 could fall to levels that, just a decade ago, were considered among the least optimistic scenarios. This signals that real-world climate trajectories are increasingly aligning with previous forecasts and that climate technologies will be crucial for meeting global goals.

On one hand, the investment landscape is indeed challenging: according to Net Zero Insights, climate tech funding in the first half of 2025 dropped by 19% compared with the same period last year. However, that decline has been accompanied by a rise in non-dilutive capital (such as loans and grants), demonstrating that investors still have confidence in the long-term viability of these technologies.

Another reason for optimism comes from Europe, where investments are concentrated on decarbonization and artificial intelligence. Europe views climate tech not only as an environmental necessity but also as an industrial opportunity, with domestic start-ups developing AI-based solutions for energy management, grid optimization and demand forecasting.

Key technological trends show capital flowing into energy innovation. According to an analysis by Esinli Capital, investment in the energy segment of climate tech has grown in recent years, while AI’s role in optimizing generation, storage and consumption continues to expand. This convergence of clean energy and digital technologies is making climate tech increasingly attractive and financially sustainable.

Additional momentum is coming from early-stage investors: as Forbes reports, some of the most active climate tech investors see opportunity in areas such as carbon aggregation, clean energy and advanced materials. Although these projects carry higher risk, investors recognize the potential for strong returns coupled with meaningful climate impact.

Despite the current market slowdown, now is actually a strategically advantageous time to invest in climate tech. The market is consolidating, policy incentives are strengthening and technological progress, especially in AI and renewable energy, is opening up new possibilities. Investors who act today not only stand to gain financially, but also to play a role in shaping solutions to climate change. Climate tech is no longer just a “green ideal”, it is a long-term, sustainable pathway for transforming both the economy and the planet.