A Critical Juncture for Climate Innovation

We are at a turning point. Global investment in environmental innovation has slowed sharply since its 2021–2022 peak. Venture capital flows have contracted, concentrating mostly on later-stage deals and the power and transport sectors (PwC, State of Climate Tech 2024). Only about 15 percent of clean energy investment reaches emerging economies—home to three-quarters of the world’s population (IEA, World Energy Investment 2024/2025).

The trust gap between generations, institutions, and communities is widening, as international cooperation falters (UNCTAD, World Investment Report 2024; Edelman Trust Barometer 2024).

As highlighted in UNEP’s Emissions Gap Report 2024, we are running out of time. We’re currently tracking toward around 3.1 °C of warming, which is far above the critical 1.5 °C limit we need to aim for. To keep this goal within reach, we must cut emissions by 42 percent by 2030.

Momentum from Local Solutions

Despite the challenges, 2023 brought a wave of hope and progress! We saw the largest increase in renewable energy capacity ever, and over 14 million electric vehicles hit the roads worldwide. Cities are also stepping up, with more than 13,000 joining the Global Covenant of Mayors to boost sustainability efforts. Together, we’re making significant strides toward a cleaner, greener future—let’s keep this momentum going!

Emerging markets—often hardest hit by climate change—are also becoming centers of innovation. Clean energy investment outside China surpassed $300 billion for the first time in 2023, led by India and Brazil (IEA, 2024). In Africa and South and Southeast Asia, climate solutions are expected to be worth $500 billion by 2031 (Reuters). With 70 percent of Sub-Saharan Africa’s population under the age of 30 (UN OHRLLS), the talent and ambition to lead this transformation is already here.

Unlocking the Green Innovation Value Chain

But potential is not enough. Global climate finance reached $1.9 trillion in 2023, still far short of the $5–9 trillion needed annually to meet the Paris Agreement (Climate Policy Initiative). High costs of capital keep investment from flowing to where it is most needed. A blended finance approach—uniting grants, concessional capital, and commercial investment—offers a path forward.

Generation Innovation demonstrated what this alignment looks like in practice. Through a gamified marketplace, participants mapped out the “green innovation value chain”—from prototype to pilot to scale—and identified where philanthropists, corporates, accelerators, and investors could best intervene to support youth-led innovation.

The Role of Collaborative Platforms

The DO School Fellowships have already shown what cross-sector collaboration can achieve: more than 10,000 innovators, corporates, and funders have tackled over 40 sustainability challenges, from circular fashion with H&M to regenerative food systems with Be the Earth. With beVisioneers: The Mercedes-Benz Fellowship, this approach is scaling further—upskilling 1,000 young innovators from over 55 countries and equipping them to launch sustainability ventures in their communities.

But no single actor can solve the challenge alone. Building a thriving ecosystem requires all players—corporates to mentor, philanthropists to seed early pilots, accelerators to refine business models, and investors to scale solutions.