A major new funding initiative promises a breakthrough for climate-tech startups. A group of top venture capital and private equity firms, called “All Aboard Coalition”, managing $60 billion in assets, has started a $300 million fund. This fund will help climate-tech companies grow from pilot stages to commercial operations. This is the time when many firms encounter the “missing middle.””
Led by TED Conferences curator Chris Anderson, the group aims to bridge the critical funding gap in clean tech—often called the “valley of death.” Anderson stated:
“One of the biggest threats to the world’s future is that the companies capable of building a healthy low-emissions global economy are simply not getting the funding they urgently need. The only way to fix that is through collective action. By acting as a community, we can help propel these exciting vanguard companies to true global scale.”
Closing the “Valley of Death” for Climate Innovations
The “missing middle” refers to a familiar but frustrating gap in climate-tech funding. Early-stage seed rounds usually get enough funding to test ideas in labs. But moving to full deployment needs big infrastructure investments. Traditional venture investors often avoid this type of capital.
This new fund aims to close the gap. It targets rounds of $100–200 million. This money will help companies build manufacturing facilities, test prototypes, or develop commercial systems.
Leading firms backing the fund include recognizable names such as:
- Breakthrough Energy Ventures,
- Khosla Ventures,
- DCVC,
- Clean Energy Ventures,
- Energy Impact Partners.
Their participation signals confidence in the climate solutions market and hopes to bring in generalist capital by reducing risk. The All Aboard Coalition brings both capital and credibility into a sector needing institutional support.
Ramp-Up Amidst Funding Declines
Global venture capital investment in climate tech has fallen for three straight years, according to PitchBook. Funding declined from $25.9 billion in 2022 to $19.7 billion in 2023, and slipped again to $17 billion in 2024—a total drop of about 34% in just two years.
Over the past two years, venture funding in climate technologies has dipped sharply. In early 2025, funding for technologies such as direct air capture fell by over 60% compared to the previous year.
Broadly speaking, global investment in climate tech fell 19% in H1 2025 compared to the same period in 2024, signaling ongoing funding challenges. Non-dilutive funding, like debt and grants, hit record levels. This shows confidence in scalable, infrastructure-focused solutions, even with fewer deals.
The U.S. market led the global share with 51% of funding (around $21.4 billion), and it may end the year 12% higher overall. In contrast, Europe’s equity investments declined, though a rebound is expected later in the year.
A report by Sightline Climate shows that global climate tech funding fell to $5.9 billion in Q2 2025, the lowest quarterly level since 2020. Although the sector is still expanding, growth has slowed to 7%, a pace the report describes as typical for a maturing market.
For the climate tech community, however, this shift from rapid acceleration to steadier progress may require a period of adjustment. Moreover, without scalable capital, many startups hit a pause. This delays or stops their work on important technologies.
This new fund directly addresses the problem. By offering a vehicle for later-stage funding, it intends to keep innovations moving forward. One industry analyst said, “You can have great lab-scale solutions. But without funding to build factories or test them in the field, those solutions go nowhere.”
This new fund comes at a key time. It brings fresh energy to a sector facing slow commercialization. This is true even with strong policy support, especially in Europe and North America.
Why Climate-Tech Needs Big, Patient Capital
Climate technologies, such as green hydrogen and advanced battery storage, require different funding. This is unlike the software and service startups that VCs typically back. Building a green hydrogen plant or modular carbon capture equipment can require hundreds of millions in initial investment. This happens before any revenue comes in.
Institutional impact investors or infrastructure funds can provide capital. But this happens only after a concept is proven viable, operations are scaled, and revenue starts flowing.
Many climate companies fail to reach that stage due to capital constraints. This new fund provides flexible capital, using equity and convertible terms. It helps overcome the commercialization hurdle.
Coalition Power: Who’s Onboard and Why It Matters
The coalition gathers firms that manage $60 billion in assets. This gives them strong financial power and expertise in green technology. They have strong capital behind them. Their goal is to invest in later-stage rounds. They want to create a strong market signal. This signal will attract more generalist investors.
Key strategic opportunities this coalition unlocks:
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Market validation: Their backing signals to other investors that climate tech is viable.
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Network leverage: Members can share technical and operational support with portfolio companies.
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Standard-setting: The fund could define benchmarks for due diligence and standards in climate-tech investing.
According to one venture partner, “This is not about gimmicks. It’s about building infrastructure to scale solutions that are already proven technically.”
A Window into the Future
As the fund deploys capital, it will ramp up in three stages:
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Investment into expansion-stage companies with proven prototypes.
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Deployment into building manufacturing capacity or first-of-a-kind facilities.
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Financial returns and impact tracking, demonstrating investment viability.
If it succeeds, the fund could spark a climate-tech ecosystem. This would make delivering solutions faster, less risky, and more appealing to mainstream investors.
Road to Scale: What Drives Impact Forward
This fund arrives amidst promising developments in climate policy and corporate net-zero commitments. The U.S. Inflation Reduction Act and the EU’s Green Deal are reducing risks for clean tech investments.
This is especially true when they team up with private capital. Corporations looking for verified offset credits or ways to decarbonize their operations now have more tools. To maximize impact, the coalition aims to:
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Invest in technologies fulfilling Tier 4 removals or real-world emissions reductions.
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Support companies with strong go-to-market plans and partnerships with utilities or industrial firms.
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Provide supplementary technical advisory support, alongside capital.
A Balanced Path Forward
While optimism is high, risks remain. The fund’s success hinges on:
- Demonstrating real-world returns on large climate investments.
- Ensuring measurement and verification of climate impact.
- Balancing financial ROI with societal and environmental goals.
The launch of this $300 million fund by a coalition managing $60 billion in assets represents a turning point for climate-tech. Targeting the “missing middle” fills a long-standing funding gap. This move could speed up the journey from innovation to real impact.
If capital flows as planned, this fund could spark a wave of climate solutions. These solutions might generate billions in revenue and cut emissions by gigatons by 2030. This initiative provides a financial boost and shows how private capital can support real climate progress.
The post $60B Venture Capital Alliance Backs $300M Fund for Climate-Tech Startups appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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