Europe’s climate tech investing has been dealt a setback with the rise of ‘deepwashing’, as certain startups falsely position themselves as transformative deep tech companies. While the influx of capital into deep tech startups in Europe is encouraging, there is a concerning trend of climate-focused startups misrepresenting their products as more innovative than they actually are.
What is ‘deepwashing’?
‘Deepwashing’ refers to the practice of climate-focused startups exaggerating their technological advancements and scientific research to attract funding. These companies present themselves as transformative deep tech companies when, in reality, they lack evidence of meaningful R&D or any significant scientific breakthroughs.
The problem with ‘deepwashing’
The rise of ‘deepwashing’ is problematic because it diverts essential funding away from startups that have the potential to make a substantial impact on decarbonizing the global economy. Instead, these funds are directed towards startups that will not significantly shift the dial in addressing pressing global challenges.
True climate deep techs
True climate deep tech startups are focused on raising funds to develop technologies that can effectively decarbonize the global economy. According to the International Energy Agency (IEA), nearly half of the necessary emissions reduction solutions in 2050 will come from technologies that are currently in the demonstration or prototype phase. As such, major innovation efforts are required in this decade to bring these new technologies to market in time.
The European advantage
Europe is ready to take on the mammoth task of driving innovation in climate tech. In 2022, 42% of all climate tech funding was raised on the continent, and investment in the sector is growing 26% faster than in the United States. Europe’s climate tech companies are a crucial part of the deep tech sector, and increasing investor interest is a positive development.
Identifying ‘deepwashing’ startups
Specialist European climate tech investors have reported receiving ‘deepwashing’ pitches from solar, heat pump, micromobility, and food tech startups. These pitches often rely on verbose descriptions of their technology but lack any fundamental technological innovation. The products offered by these startups are often slight improvements on existing market technologies or a series of minor changes packaged together to create the illusion of innovation.
As Europe invests more in climate-focused deep tech startups, it is crucial to discern between genuine technological advancements and ‘deepwashing’. Funding must be directed towards startups that genuinely have the potential to transform industries and address global challenges. By supporting true climate deep techs, Europe can contribute significantly to decarbonizing the global economy and driving innovation in the sector.