How We Picked Promising Climate Tech Companies in an Especially Unsettling Year
Estimated Reading Time: 5 minutes
- MIT Technology Review implemented a rigorous, globally-focused methodology to identify top climate tech companies amidst geopolitical tensions and policy shifts.
- The selection prioritized demonstrable impact on greenhouse gas emissions or community resilience over pure market speculation, favoring companies with established track records.
- Due to US policy uncertainties, the review significantly expanded its global search, highlighting innovators from China (e.g., HiNa, Envision) and the EU (e.g., Traton, Cemvision).
- Identified companies with inherent resilience, such as domestic recyclers benefiting from tariffs (Redwood Materials), and those capitalizing on new demands like AI data center energy needs (Fervo Energy, Kairos Power).
- The final list was narrowed to 10 companies, chosen for their real strides in sustainable solutions despite a challenging year, offering a confident outlook on climate innovation.
- Navigating the Murky Waters: Our Core Dilemma
- Actionable Step 1: For Investors and Innovators
- Shifting Our Gaze: Global Solutions in a Challenging Landscape
- Actionable Step 2: For Climate Tech Entrepreneurs
- Identifying Resilience and Emerging Opportunities
- Actionable Step 3: For Policymakers and Industry Leaders
- Conclusion: A Confident Look Ahead
- Discover the Future of Climate Innovation
- Frequently Asked Questions
In a world grappling with the escalating impacts of climate change, the search for innovative solutions has never been more urgent. Yet, the path for climate technology companies is far from smooth. Geopolitical tensions, fluctuating economic landscapes, and shifting policy priorities create a complex, often unsettling, environment for innovation. This year, the challenge of identifying truly promising climate tech companies required a deeper dive, a broader lens, and a steadfast commitment to impact over pure market speculation. Here’s how our team at MIT Technology Review navigated these turbulent waters.
Navigating the Murky Waters: Our Core Dilemma
The process of selecting the most impactful climate tech companies annually is always rigorous, but this year presented unique hurdles. We faced a profound dilemma that forced us to re-evaluate our traditional approach. The landscape was particularly challenging, demanding a thoughtful recalibration of our criteria and a careful consideration of external forces.
“MIT Technology Review’s reporters and editors faced a dilemma as we began to mull nominees for this year’s list of Climate Tech Companies to Watch. How do you pick companies poised to succeed in a moment of such deep uncertainty, at a time when the new Trump administration is downplaying the dangers of climate change, unraveling supportive policies for clean technologies, and enacting tariffs that will boost costs and disrupt supply chains for numerous industries?
We as a publication are focused more on identifying companies developing technologies that can address the escalating threats of climate change, than on businesses positioned purely for market success. We don’t fancy ourselves as stock pickers or financial analysts. But we still don’t want to lead our readers astray by highlighting a startup that winds up filing for bankruptcy six months later, even if its demise is due to a policy whiplash outside of its control. So we had to shift our thinking some.
As a basic principle, we look for companies with the potential to substantially drive down greenhouse gas emissions or deliver products that could help communities meaningfully reduce the dangers of heatwaves, droughts, or other extreme weather. We prefer to feature businesses that have established a track record, by raising capital, building plants, or delivering products. We generally exclude companies where the core business involves extracting and combusting fossil fuels, even if they have a side business in renewables, as well as those tied to forced labor or other problematic practices.
Our reporters and contributors add their initial ideas to a spreadsheet. We ask academics, investors, and other sources we trust for more nominees. We research and debate the various contenders, add or subtract from our list, then research and debate them all some more. Starting with our first climate tech list in 2023, we have strived to produce a final mix of companies that’s geographically diverse. But given the particular challenges for the climate tech space in the US these days, one decision we made early on was to look harder and more widely for companies making strides elsewhere. Thankfully, numerous other nations continue to believe in the need to confront rising threats and the economic opportunities in doing so.
China, in particular, has seized on the energy transition as a pathway for expanding its economy and global influence, giving rise to some of the world’s largest and most innovative clean tech companies. That includes two on this year’s list: the sodium-ion battery company HiNa and the wind-turbine giant Envision.
Similarly, the European Union’s increasingly strict emissions mandates and cap-and-trade system are accelerating efforts to clean up the energy, heavy-industry, and transportation sectors across that continent. We highlighted two promising companies there, including the German electric truck company Traton and the Swedish clean-cement maker Cemvision.
We also determined that certain businesses could emerge relatively unscathed from the shifting conditions in the US, or perhaps even benefit from them. Notably, the fact that heightened tariffs will boost the cost of importing critical minerals could create an advantage for a company like Redwood Materials, one of the US’s biggest recyclers of battery materials.
Finally, the boom in AI data center development is opening some promising opportunities, as it spawns vast demands for new electricity generation. Several of our picks are well positioned to help meet those needs through carbon-free energy sources, including geothermal company Fervo Energy and next-generation nuclear startup Kairos Power. Plus, Redwood Materials has launched a new microgrid business line to help address those demands as well.
Still, it was especially challenging this year to produce a list we felt confident enough to put out into the world, which is a key reason why we decided to narrow it down from 15 companies to 10. But we believe we’ve identified a solid slate of firms around the world that are making real strides in cleaning up the way we do business and go about our lives, and which are poised to help us meet the rising climate challenges ahead. We hope you think so too.”
This candid assessment underscores the profound responsibility we feel towards our readers. It’s not enough to simply identify groundbreaking technology; we must also consider its viability and resilience in a volatile environment. Our focus remains resolutely on technologies that can genuinely reduce greenhouse gas emissions or build community resilience against extreme weather events. This means a preference for companies with established track records – those who have secured funding, built infrastructure, or delivered tangible products, rather than just concepts.
Actionable Step 1: For Investors and Innovators
When evaluating climate tech, prioritize demonstrable impact over speculative potential. Look for a clear, measurable pathway to reducing emissions or enhancing resilience, backed by early-stage success metrics like secured funding, pilot projects, or initial product deployments. Companies with a robust foundation are better positioned to weather economic and policy shifts.
Shifting Our Gaze: Global Solutions in a Challenging Landscape
Recognizing the unique pressures within the United States this year, particularly with policy headwinds impacting clean technology, we made a strategic decision to cast our net wider. While we’ve strived for geographic diversity since our first climate tech list in 2023, this year necessitated a deliberate and intensified search for innovation beyond US borders. This expanded global perspective proved invaluable.
Many other nations, undeterred by some of the political shifts seen elsewhere, continue to vigorously pursue climate action and recognize the immense economic opportunities embedded in the energy transition. China, for instance, has strategically positioned itself as a leader in clean energy, fostering an environment where giants like sodium-ion battery innovator HiNa and wind-turbine powerhouse Envision can thrive. Their significant government and private sector investment has catalyzed rapid advancements, making them crucial players in the global climate tech ecosystem.
Similarly, the European Union’s ambitious emissions mandates and a mature cap-and-trade system are driving significant transformations across its energy, industrial, and transportation sectors. This policy push creates a fertile ground for companies like Germany’s electric truck developer Traton and Sweden’s Cemvision, which is pioneering clean cement production. These companies are not just responding to regulations; they are actively shaping the future of their respective industries with sustainable alternatives.
Actionable Step 2: For Climate Tech Entrepreneurs
Don’t limit your market or strategic thinking to a single national context. Understand the global policy landscape, identify regions with strong supportive frameworks (like the EU’s mandates or China’s clean energy investments), and consider how your technology can scale and adapt to diverse international markets. Global partnerships can also provide essential resilience against localized policy shifts.
Identifying Resilience and Emerging Opportunities
Even within challenging markets, certain business models possess inherent resilience. We also identified emerging trends that are creating new, significant demands for carbon-free solutions. These were crucial considerations in our selection process, helping us pinpoint companies poised for success despite, or even because of, the prevailing conditions.
For example, the threat of heightened tariffs on critical mineral imports, while generally a concern, can paradoxically benefit domestic recycling operations. This scenario could provide a distinct advantage for companies like Redwood Materials, a leading US-based recycler of battery materials. By processing materials closer to home, they reduce reliance on potentially tariff-affected supply chains, turning a challenge into an opportunity.
Furthermore, the explosive growth of AI data centers, which require vast amounts of electricity, is creating a parallel boom in demand for new energy generation. This presents a unique and timely opportunity for carbon-free energy providers. Companies such as geothermal innovator Fervo Energy and next-generation nuclear startup Kairos Power are perfectly positioned to help meet these massive energy needs with sustainable sources. Redwood Materials has also smartly diversified, launching a new microgrid business line to address the localized, reliable power demands of such facilities.
Actionable Step 3: For Policymakers and Industry Leaders
Recognize and strategically leverage new demands created by technological advancements (like AI’s energy needs) to accelerate the adoption of clean energy. Develop policies that reward domestic innovation and resilience, turning potential economic headwinds (like tariffs) into catalysts for sustainable local industries. Fostering a dynamic regulatory environment that responds to evolving challenges and opportunities is key.
Conclusion: A Confident Look Ahead
Crafting this year’s list was undoubtedly one of our most challenging undertakings, leading us to narrow our final selection from 15 to 10 companies to ensure every pick met our stringent, re-evaluated criteria. Yet, we emerge from this process with strong confidence in the chosen firms.
The companies we’ve highlighted are not merely surviving; they are actively driving change, cleaning up industries, and building a more sustainable future across the globe. They represent the ingenuity and perseverance required to tackle the immense climate challenges that lie ahead. Their innovations offer a beacon of hope, demonstrating that even in unsettling times, progress is not only possible but actively being forged.
We invite you to explore the full list of these inspiring climate tech companies. We believe they offer a powerful glimpse into the technologies that will shape our collective future.
Discover the Future of Climate Innovation
Ready to dive deeper? Explore our complete list of this year’s Climate Tech Companies to Watch and see how these innovators are making a difference. Share your thoughts and join the conversation on building a more resilient planet.
Frequently Asked Questions
Q1: What was the main challenge in picking climate tech companies this year?
A1: The main challenge was navigating a period of deep uncertainty, including geopolitical tensions, fluctuating economic landscapes, and shifting policy priorities (like those in the US) that could impact clean technologies.
Q2: How did MIT Technology Review adapt its methodology for this year’s selection?
A2: The methodology was recalibrated to prioritize companies with the potential to substantially drive down greenhouse gas emissions or build community resilience, focusing on established track records rather than pure market speculation, and by expanding the search globally.
Q3: Why was there a greater focus on non-US companies in this year’s list?
A3: Due to particular challenges and policy shifts impacting the climate tech space in the US, the team deliberately looked harder and more widely for companies making strides in other nations, which continue to actively pursue climate action and economic opportunities in the energy transition.
Q4: Which countries were highlighted for their climate tech innovation this year?
A4: China was highlighted for its leadership in the energy transition with companies like HiNa and Envision, and the European Union for its strict emissions mandates fostering companies like Traton and Cemvision.
Q5: What emerging opportunities did the review identify for climate tech companies?
A5: The review identified opportunities in domestic recycling of critical materials (potentially benefiting from tariffs) and the massive demand for new electricity generation created by the boom in AI data centers, which favors carbon-free energy providers like Fervo Energy and Kairos Power.
Q6: What specific criteria were used for company selection?
A6: Criteria included potential to substantially drive down greenhouse gas emissions or enhance community resilience, an established track record (capital raised, plants built, products delivered), and exclusion of companies tied to fossil fuel extraction or problematic labor practices.
