Empowering Female Leadership in Climate Techs

The dawn of climate tech innovation is on us, with remarkable efforts being poured into amplifying technology to tackle the challenges brought on by and associated with climate change.

This surge in technological advancement calls for a diversified push in leadership, crossing boundaries of gender, race and academic background to enact significant transformation.

Leading the charge in fostering a sector ripe with ground-breaking technologies and inclusive solutions is Sustainable Ventures, with its Investment Lead Stuart Ferguson championing the critical role diversity plays in propelling innovation.

Stuart believes in the power of diverse teams, saying they inspire a plethora of perspectives and inventive solutions. Thus, Sustainable Ventures places a significant emphasis on female-founded startups, investing at a rate 12 times higher than the industry's average.

Situated at the heart of the burgeoning climate tech revolution, Sustainable Ventures reigns as Europe’s premier hub for supporting more than 500 businesses in their journey from startup to triumph. Notable successes under its belt include 2022 Earthshot Prize victor Notpla, AirEx and Depop.

Doubling down on women in climate tech

In a commendable pledge, Sustainable Ventures has dedicated 23% of its investments to startups entirely founded by women, overshadowing the 1.8% industry average. This vigorous support has culminated in their 50th investment milestone, a testament to their comprehensive model in steering portfolio successes.

Stuart articulates his excitement for the climate tech realm, underlined by the exceptional teams behind the technology. Supporting about 700 startups, Sustainable Ventures celebrates a near-balanced gender representation among founders, marking a significant stride in the industry.

“Climate tech’s a really exciting space to be in at the minute, not just because of the technologies coming through but thanks to the brilliant founder teams,” Stuart told sister title Energy Digital. “It’s ultimately those guys who are driving success. 

“We support people in a number of different ways, working with around  700 startups. It’s great to see the gender split of the founders there is roughly 50/50.

“When we first started, we were choosing from 100 different climate tech opportunities. We’re now choosing from about 1,500. It’s pretty clear to see that a huge amount of time and money has been invested in supporting people from diverse backgrounds to come through and become entrepreneurs.”

Unlocking the potential of female leadership

The correlation between diverse leadership and startup success is undeniable. Diverse teams mirror diverse customer bases, leading to more reflective solutions.

Stuart critiques the homogeneity often found within teams, advocating for the immense value of varied perspectives in generating superior returns and performance.

“That’s not going to happen if it’s a team of white men from the same university course, which we still unfortunately still see too often,” Stuart said. “It is really critical that we can have that diverse viewpoint across the team, which also does translate into better returns and better performance.”

According to Boston Consulting Group (BCG), female-led teams potentially offer double the returns of all-male teams, highlighting the financial advantages of diversity. Regrettably, venture capital flow into female-founded companies has stagnated over the decade, with the climate tech sector slightly outperforming the dismal averages.

“Climate tech is slightly better, around double, but even that’s depressing as it comes in at around 6% to 7%,” Stuart explained. This is partly driven by the top end of the funnel with more mature companies raising hundreds of millions where there’s not a huge amount of diversity. 

“This reflects some of the work that’s been done to encourage diverse founders but also encourage diverse decision makers within VC.” 

Path to a more diverse future

The journey towards gender inclusivity in climate tech is progressing, albeit slowly. Initiatives aimed at inviting diverse founders into STEM fields are crucial for expanding the industry's capacity for innovation needed to achieve net zero.

Stuart stresses the importance of collaboration and openness in addressing the hurdles faced by diverse founders. By leveraging a collective approach, the flow of capital towards climate tech and diverse leadership can be enhanced, fostering more effective partnerships among startups.

“The key thing is being open and accepting that the space is by no means perfect,” Stuart added. “This is a hugely collaborative market, we don't invest on our own. We invest alongside other investors so we need everyone working together to increase the flow of capital into climate tech and diverse founders.

“If we can talk and be open about some of the challenges diverse founders are facing, we can get startups working together more effectively.”

Sustainable Ventures envisions female-founded climate techs attaining long-term success through resilience, effective fundraising and clear strategic visions. This supportive ecosystem, combined with strategic guidance, paves the way for startups to navigate their growth trajectories confidently.

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