Women in ClimateTech: Driving Economic Growth Through Innovation and Equity
By Eshita
The ClimateTech sector stands at the intersection of technological innovation and environmental sustainability, offering solutions to mitigate and adapt to climate change. Despite its critical role, the industry remains starkly gender-imbalanced. Women face systemic barriers in funding, leadership representation, and workforce participation. Even so, women entrepreneurs and leaders are reshaping the sector, demonstrating that gender equity is not just a moral imperative but an economic necessity. This blog explores the economic impact of women in ClimateTech, highlighting their contributions, challenges, and the transformative potential of inclusive investment.
The Gender Gap in ClimateTech: Challenges and Resilience
Underrepresentation in Funding and Leadership: Women remain significantly underrepresented in ClimateTech. Globally, they constitute only 32% of the energy workforce and face even starker disparities in leadership roles and venture capital (VC) funding. In 2024, solo female founders secured just 5.28% of total ClimateTech deals, while women-only teams received a mere 1.14% of funding in the sector. This reflects broader VC trends, where women-led startups globally receive only 2% of total investments.
The disparity is particularly pronounced in the United States, where female-founded ClimateTech startups raised just $135.8 million in the first three quarters of 2024—a fraction of the $33.5 billion invested in the sector during the same period. Mixed-gender teams fared slightly better, securing $2.45 billion across 159 deals, underscoring the persistent bias toward male involvement in fundraising.
Breaking Barriers Through Innovation: Despite these challenges, women-led ventures are proving their resilience. Studies show that female-founded startups deliver higher returns on investment and exit faster than male-led counterparts. This economic outperformance highlights the untapped potential of women entrepreneurs in driving ClimateTech innovation.
Economic Contributions of Women-Led ClimateTech Ventures
Focus on Adaptation and Dual-Impact Solutions: Women entrepreneurs are prioritizing climate adaptation and solutions that address both mitigation (reducing emissions) and adaptation (managing climate impacts). Over 41.8% of funding for female-led ClimateTech startups supports "cross-cutting" businesses that tackle both areas, compared to 13% for male-only teams. This dual focus is evident in sectors like:
Food, Agriculture, and Land Use: This accounts for 31% of deals involving solo female founders, with innovations in regenerative agriculture and sustainable supply chains.
Adaptation & Resilience (A&R): Female-led startups dominate in areas like climate insurance, urban cooling systems, and flood-resistant infrastructure, which help communities manage extreme weather risks.
For instance, initiatives like Oorja Development Solutions—a female-led startup providing clean energy to low-income farmers—exemplify how women entrepreneurs integrate social equity into climate solutions.
Driving Profitability and Market Opportunities
The economic case for investing in women-led ClimateTech is robust. Companies with diverse leadership teams achieve 34% higher returns on equity and 42% higher returns on invested capital than male-dominated counterparts. Female founders also excel in early-stage funding rounds, outperforming male peers in securing initial investments.
Programs like She Wins Climate—a global initiative by the International Finance Corporation (IFC)—are bridging funding gaps by accelerating women-led startups in emerging markets. Launched at COP28, the program provides regional acceleration support, connects VCs with gender-lens strategies, and raises awareness about the value of women-led innovation.
Systemic Barriers and the Path to Inclusion
The Funding Disparity: The gender investment gap persists due to systemic biases. Women-led ClimateTech ventures are often perceived as "riskier" by predominantly male investors, despite evidence of their profitability. This bias is compounded by limited access to networks, as women entrepreneurs often lack connections to high-impact mentors and investors. ClimateTech is viewed as male-dominated, discouraging women from entering the field.
Policy and Ecosystem Interventions: Addressing these challenges requires systemic change. Initiatives like Canada’s Centre for Innovation and Clean Energy (CICE) are investing $3 million in non-dilutive funding for women-led ClimateTech ventures, aiming to correct gender imbalances and drive decarbonization. Similarly, communities like Women in Climate Tech provide networking, mentorship, and collaboration opportunities to empower female founders and investors.
Policy reforms are equally critical. Governments must prioritize gender-responsive policies in STEM education, workforce development, and funding access. For example, mandating gender diversity in corporate leadership and emission disclosure requirements could incentivize companies to partner with women-led ClimateTech startups.
The Future of ClimateTech: Why Gender Equity Matters
Unlocking Economic Potential: Investing in women-led ClimateTech is not just about equity—it’s a strategic economic decision. Diverse teams drive innovation by bringing fresh perspectives to complex problems, while women’s emphasis on social responsibility aligns with the growing demand for sustainable business practices.
A Call to Action
To fully harness the economic potential of women in ClimateTech, stakeholders must:
Increase funding for women-led ventures: Investors should adopt gender-lens strategies.
Amplify visibility: Highlighting success stories through awards and media coverage can challenge stereotypes and inspire future generations.
Support policy reforms: Governments should incentivize gender diversity in ClimateTech through grants, tax breaks, and corporate mandates.
Conclusion
Women in ClimateTech are proving that inclusive leadership drives both environmental and economic gains. Despite systemic barriers, their ventures deliver higher returns, prioritize adaptation, and address social inequities—key ingredients for a sustainable future. By investing in women entrepreneurs, reforming biased systems, and fostering collaborative ecosystems, the ClimateTech sector can unlock its full potential.
Eshita is a lawyer and public policy professional pursuing her MALD '25, who explores the intersection of tech policy, business, governance, and climate resilience.