Axios Pro: Climate Deals

March 20, 2023

Axios Pro Exclusive Content

☕ Happy Monday! We're back at it, so let's get started.

🌳 Situational awareness: Mercuria, the energy and commodities group with hubs in Geneva, Houston and Singapore, announced plans this morning to make $500 million in nature-based investments, including carbon sequestration projects with small landowners in North America.

1 big thing: Private investors accelerate climate push

Chart: McKinsey & Company

Private investments in climate sectors are surging amid a broader equity pullback in other sectors, a new McKinsey report finds.

Why it matters: Private equity firms see short-term gains in areas like building decarbonization, agriculture, hydrogen and industrial decarbonization, Megan writes.

By the numbers: Private investors increased their commitments more than 2.5 times to about $196 billion in 2022 from about $75 billion in 2019, per PitchBook.

  • That represents average annual growth of roughly 40%.
  • In 2021, investment reached $183 billion, an increase of almost 90% from the previous year. From 2021 to 2022, the level of investments grew by 7%.

Meanwhile, overall private-market equity-deal volume declined by roughly 24% from its 2021 levels.

Yes, but: The data in the McKinsey report ends at 2022 and doesn't reflect funding trends from early 2023.

  • Investors and founders have told Axios that the funding environment has become more difficult in the first few months of 2023 than it was in 2022.

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