3. A solid commercial strategy requires a robust, secure supply chain

The COVID-19 pandemic, increasing global geopolitical tensions and ongoing pressure to decarbonize have brought supply chain security into increasing focus. Early stage climate technology companies are at particular risk given their ever-evolving needs, emerging commercial relationship, and limited market power. Investors typically expect a thoughtful supply chain de-risking strategy with substantive, measurable milestones that are consistently met on time and as expected.

A credible upstream and downstream supply chain derisking strategy may include:

• Ensuring that there are multiple accredited suppliers for identified services and materials
• Developing both primary and alternative logistics strategies in key geographies
• Confirming that a reliable, well-supported workforce exists across supply chains
• Developing access to low carbon power supplies, as necessary

Companies that secure a reliable, affordable and green supply chain are more attractive to prospective investors.

Although investment in climate technology supporting the energy transition has grown rapidly, investor expectations have also evolved. Climate technology innovators should carefully identify, evaluate and mitigate key technological and commercial risks to attract necessary capital including project financing at a compelling cost.