While major tech companies have announced mass layoffs in the last several months, those that focus on climate change are proving more resistant to recession.
- Recently laid-off tech workers are turning to tech startups, many of which focus on climate initiatives and making the world a better place.
- Climate startups have successfully raised billions of dollars in funding in the two years. In 2022, startups collectively raised $20 billion compared to $18 billion in 2021.
- These climate-conscious companies are growing more successful and more lucrative. Approximately 83 climate-focused companies globally are worth more than $1 billion, The New York Times reports.
- Though recession worries have increased layoffs in the tech industry, increased interest in climate-driven businesses somewhat shields these tech companies.
Why it’s news
Climate-driven businesses may be one of the few industries somewhat insulated from the potential recession. Businesses are more focused on climate initiatives—meaning they will need the support climate-oriented tech companies can provide.
Additionally, governments have increasingly focused on promoting climate initiatives and supporting climate-driven businesses to reach their goals.
Since 2021, more than 135 funds dedicated to climate investment have been created. Together, these funds have nearly $94 billion under their management, The New York Times reports.
Businesses have faced more pressure to either offset their own climate emissions or find solutions for other environmental concerns. Around the world, people are increasingly looking to businesses to find solutions for societal problems. If companies want to keep customer loyalty, they must continue climate investment.
Climate-focused tech companies are also getting a boost as more tech workers want to find companies that more closely align with their values. Climate Draft, a company that helps climate startups find advisers, investors, and employees, found that over 3,000 laid-off tech workers were looking to find a climate-oriented company, The Times reports.
Backing up a bit
In the last several years, more companies have focused on climate investment—and it looks like that will not change in the economic downturn.
For the first time, the U.S. has committed more to Europe in climate-policy initiatives by providing incentives for companies through the inflation reduction act. World governments aren’t the only ones making climate investment a part of their agendas. Business leaders continue to emphasize company focus on climate issues, despite the economic downturn and likely recession.
“This has been the discussion all week. If there is an economic slowdown, is this going to change the commitment that CEOs have made to decarbonization? It hasn’t yet. I don’t even think it has changed the pace … I think there’s a recognition that time is critical, and there is a lot to get done,” Johnson Controls CEO George Oliver tells Fortune.
Companies have increasingly become more involved in climate initiatives, whether that be a focus on reducing the company’s own carbon footprint or investing in causes to reduce global emissions.
In the face of an economic downturn, one might assume that climate initiatives would be among the first programs cut when businesses look to save money. However, comments from CEOs indicate that this won’t necessarily be the case. Many initiatives—investments into clean energy, for example—will be cost-saving endeavors.