Over the past year, banks have been scaling back high‑profile ESG and climate mandates by exiting net‑zero alliances, Environmental, Social, and Governance (ESG) Drives, and any politically motivated restrictions on investments in fossil fuels.
Now, Axios, a publication not known for its hot right takes, has just posted an article on “The World’s Great Climate Collapse.” The piece emphasizes how quickly climate policy and investment momentum have eroded, declining by “nearly 50%” from the peak climate cult insanity of 2021.
By the numbers: Global venture capital investments in climate and clean tech deals have dropped nearly 50% since their high of 2021, according to PitchBook data compiled for Axios, but even this fall is far higher than earlier periods.
- The roughly $40 billion in investments last year still represents a roughly 450% increase since 2015, when the Paris Agreement was signed.
The numbers show the collapse began picking up steam in 2024. This move corresponds to the era when the Trump administration gutted Biden’s “Green New Deal,” when more questions arose about the practicalities of “green technology,” and when the need for inexpensive, reliable energy in the wake of artificial intelligence data centers became apparent.
2021 was a momentous year for venture capital [VC] investment in climate technology. 2836 deals were announced that year, collectively valued at over $60bn. Up from 1827 deals valued at $27.8bn the year prior. Exits were at a peak too – 123 exits worth over $100bn in total. Since then, however, VC deals in this space have slowed.Data from PitchBook, a Morningstar company, suggests 2024 was the third consecutive year when both deal value and deal count for climate tech venture capital investments fell. Deal value is down 21% and deal count is lower by 11%….The decline in VC climate tech deal activity is in its third year, but the 2024 slowdown is the largest by comparison. “At least some of this trend is related to wider VC trends, rather than just the climate tech space, though some climate tech-specific headwinds are certainly present”, says John MacDonagh, PitchBook’s senior analyst for emerging technology.The decline is evident even in the two largest market segments – mobility and grids. At its peak, in 2021, nearly half of VC climate tech investment was attributable to these two segments says MacDonagh.
Another firm showed similar trends in 2025. Sightline Climate’s 2025 investment analysis notes that total climate VC and growth deals fell to 1,545 in 2025, down 18% from 2024. And while overall investment rose 8%, the trend shows consolidation into a smaller set of favored companies rather than broad-based enthusiasm.
The analysis included one interesting tidbit about fossil fuel companies, which were encouraged by current administrative policies to return to focus on gas, oil, and coal.
Oil majors made no startup acquisitions in 2025, signaling a pullback as renewed fossil support pushed capital back toward core businesses. M&A shifted to smaller bolt-ons, led by NextPower with three solar optimization deals, while incumbents like Schneider Electric, Blink Charging, and Xpansiv focused on targeted add-ons to expand digital and operational capabilities.
I will simply note that we covered Shell Oil’s return to focusing on fossil fuels in 2023, which is consistent with the findings cited above. Given the soaring number of drilling permits issued, I expect this trend to continue.
The piece also notes that investments in early-stage ventures are shrinking sharply, creating a new “valley of death” as many investors avoid riskier climate startups.
It is transparently clear that investor enthusiasm for green energy has gone sub-zero. I look forward to the return of more abundant energy and more reliable technology. As a Californian, I can only dream of lower energy costs…but you all can enjoy that for me!
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