Britain’s climate tech ecosystem is one of the best-funded in the world, underscoring the sector’s growing importance.
In 2023, investor appetite for British climate tech surged, with climate tech startups receiving around 29% of total UK VC investments received in 2023.
London in particular has shined globally in recent years, with its climate tech startups raising £2.75bn, the second most in the world behind Stockholm, in 2023.
Research from PwC found that in 2024, though global climate tech funding dipped, UK firms in the sector saw investments boost by 24%.
However, these companies face “unique challenges scaling” according to Eleanor Cox, Head of SME Banking for Tech at Lloyds in London, “due to high costs, long development cycles and they often require hardware and software”.
“They need a lot of money upfront to develop and scale tech,” Eleanor said, “for things like building infrastructure, purchasing specialised materials, and for testing their solutions. There can also be lengthy regulatory approval processes.”
“This is made even harder because, the path to profitability is generally slower than other areas of tech, which can be off-putting to more risk-averse investors,” Eleanor said.
Despite the challenges, both the public and private sectors must maintain their momentum to establish Britain as a leading hub for climate technology worldwide.
Supporting a diverse range of solutions will be essential to achieve the environmental goals that humanity needs.
Below are just some of the hundreds of ways British tech companies are innovating to combat climate change and other environmental issues.
Power Roll
One standout innovation from the UK comes from Power Roll, a North East-based company innovating solar energy with its patented photovoltaic (PV) film.
Unlike traditional silicon solar panels, Power Roll’s film is ultra-lightweight, flexible, and can be deployed on almost any surface, from rooftops to campervans. Using microgroove technology, the film offers a low-cost alternative that has the potential to democratise solar energy access.
The company is working towards establishing a commercial-scale factory in the North East capable of producing over a million square meters of solar film annually — enough to power 32,000 homes.
“We are incredibly proud of the patented technology we have created at Power Roll and are looking forward to taking this next, important step in the business’ journey to be able to bring our unique and low-cost solar film to market,” said CEO Neil Spann.
Spann described how as a small business in this space, managing the finances was a significant challenge and how the support it received from its bank, Lloyds, through treasury services and assistance in maximising the return of funding rounds was essential to its success.
Notpla
London–based Notpla is tackling the environmental scourge of single-use plastics with a sustainable alternative: packaging made from seaweed.
The startup has gained global recognition for its biodegradable and even edible solutions, such as drink pods used at the London Marathon. The company has partnered with brands including Just Eat to further its research and reach, leading to the development of seaweed-coated takeaway boxes.
“Seaweed is an incredible resource,” says Notpla’s chief revenue officer, Lise Honsinger. “The more we grow of it, the better the effect.” Unlike land-based crops, seaweed cultivation doesn’t compete with food production, requires no fresh water, and actively contributes to marine biodiversity.
Notpla grew through a combination of early crowdfunding rounds, a series of grants and eventually a £20m Series A investment in late 2024 from United Bankers and Catalytic Capital.
The firm’s chief revenue officer Lise Honsinger said that as a startup in a novel category, finding reliable financial services was a difficult task, made easier when it was given 12 months of free banking by Lloyds.
Honsinger noted that for novel startups, being attached to a well-known institution provided a certain legitimacy for its investors and clients.
Sorted
Founded in 2022, London-based startup Sorted is supporting efficient waste management with AI and laser technology. The company aims to reduce landfill and incineration by enabling waste facilities to recover recyclable materials with unprecedented precision.
Sorted’s system is installed above conveyor belts in waste facilities, where advanced cameras and AI-powered computer vision identify valuable recyclables among the waste stream. Using spectroscopy, Sorted can detect materials that traditional methods often miss. When recyclable items are spotted, lasers guide human pickers to extract them efficiently.
Sorted reports that one application of its technology reduced residual waste by over 50%, significantly lowering carbon emissions.
“We use AI to augment and better enable human pickers. Our UK pilots show increased revenue and performance as well as reduced costs through using Sorted’s technology,” explained Arthur Goujon, co-founder and CTO of Sorted.
Upp
Founded in Shropshire in 2022, Upp is transforming agricultural waste into a sustainable and nutritious plant-based protein. The startup focuses on optimising broccoli harvesting while repurposing the often overlooked 70% of the plant that typically goes to waste.
With its innovative approach, Upp is addressing critical issues in agriculture, including food waste, carbon-intensive protein production, and labour shortages.
Upp’s automated selective harvester uses machine learning and 3D cameras to identify broccoli crops ready for harvest. This system not only reduces the cost of manual labour but also increases efficiency, making broccoli farming more profitable for farmers.
Once the broccoli heads are sent to market, the company upcycles the stems and other byproducts into high-protein products suitable for various food applications.
“Upcycled broccoli is much more than a more environmentally friendly alternative to pea-protein; it is packed with health-promoting nutrients, and fibre, and is entirely natural,” said David Whitewood, CEO of Upp.
The economic potential of climate tech
Investors aren’t simply supporting the technology for the sake of altruism, leading in this space can also provide massive economic benefits and support businesses across all sectors.
As Chris Morris, founder of the investment firm Sustainable Ventures told UKTN: “The only way you drive change…is by providing a solution that is economically attractive.”
Oxford Economics projected that the green economy – which includes but is not limited to climate tech – will contribute $10.3tn to the global GDP by 2050.
Companies like Power Roll aren’t simply offering eco-friendly energy alternatives, they’re empowering consumers and businesses alike to save resources with cheaper and more efficient energy.
Upp’s automated harvester technology doesn’t just reduce waste, it allows agricultural businesses to extract more value from their crops and provides a cost-effective source of protein.
When British climate tech is truly thriving, numerous industries can in effect have their low-carbon cake and eat it too.
The UK’s climate tech sector is building capacity to become an important contributor to the global transition to a sustainable future, but it requires sustained investment, regulatory support, and a willingness to embrace risk.
As mentioned, there are plenty of investors who have seen the economic potential of the space, and there are also various private sector measures accelerating sustainable business growth.
Lloyds, for example, offers discounted sustainable finance to businesses when used specifically to improve a business’ environmental impact.
Examples include Clean Growth Financing Initiative and Green Asset Finance, which can help businesses fund green technologies such as solar photovoltaics, heat pumps, LED lighting, electric vehicles and many more.
And the support from the private sector in the space has laid a promising groundwork for Britain to play a role in climate tech worldwide, which can bring benefits beyond the obvious and pressing need to protect the planet.
Lloyds’ relationship managers are experienced in the tech sector and are keen to support further growth of this vibrant industry. Please get in touch today to discuss how they might help your business.
For more information about how Lloyds supports British tech businesses, click here.
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