Tenity: Women are Breaking Through in Climate Fintech
Climate fintech is making a change in the sector with a shift towards female leadership.
Tenity's 2024 Global Climate Fintech Report says companies that have at least one woman in the role of founder or CEO have gained more than half of all early-stage funding reported in the years 2022-2023.
This stark contrast is highlighted even more when compared to the general fintech sector where women-led initiatives typically secure only 3.4% of venture funding.
In 2023 alone, women have co-founded or held leadership roles in a third of all climate fintech companies, a figure which increased to 45% in 2023.
Women face a "triple glass ceiling" and sexist culture in fintech according to research conducted by the University of Manchester and National University of Singapore.
Andreas Iten, Co-Founder and CEO at Tenity, says: “One notable development is the rise of female founders in Climate Fintech.
“While less startups were founded in 2023 compared to the previous year, the percentage of companies with at least one female founder has increased significantly, reaching 45%, marking a promising shift toward gender balance in the sector.”
Understanding climate fintech
Climate fintech refers to the financial technology aimed at tackling and adapting to climate change.
This sector boosts the move towards a low-carbon economy, managing risks, enhancing efficiency and informing decision-making through applications such as ESG data reporting, green investing and carbon footprint tracking.
Against a backdrop where both consumers and financial institutions are striding towards diminishing sustainability-related risks, climate fintech solutions are emerging as essential tools globally.
Additionally, they play an important role in supporting companies to comply with new regulations that demand reporting on climate-related risks.
Insights from Tenity's 2024 Global Climate Fintech Report
Tenity's analysis of 750 start-ups shows Europe's progressive climate legislation as a catalyst for the rapid proliferation of ESG data and analytics solutions, required for regulatory reporting.
Of 106 companies offering regulatory reporting tools, 90% are ESG data providers. Europe dominates the market, accounting for 70% of integrated reporting solutions, driven by strict EU climate disclosure rules like CSRD and SFDR.
Despite an overall 38% plunge in the broader venture capital fintech scene, Europe remains resilient with a minuscule decline of 2.2%.
The region, led by the UK, Germany and France, dubbed the "power triangle," commands 65% of the total capital in the EMEA region and is home to 50% of the companies.
Although the European climate fintech landscape is establishing a sturdy foundation, it continues to lag in maturity compared to US counterparts.
Only 17 companies across Europe have raised more than US$50m of total capital, as opposed to 23 in the US.
Andrea Fritschi, Chief Investment Officer at Tenity, says: "Climate fintech is not just showing remarkable resilience - it's setting new standards for inclusion in venture funding.
“With blockchain technology applied to ensure accountability in carbon markets and AI tapped for real-time climate risk assessment, the sector proves that innovation and gender equality can go hand-in-hand.
“While Europe leads in diversity and early-stage innovation, the challenge now is matching US capabilities in scaling these solutions globally."
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