Large funds are too invested in the energy transition to turn back now

The results of the U.S. presidential election has left many worried about the future of climate tech, but the energy transition has enough financial momentum that experts aren’t expecting investment trends to change anytime soon. Limited partners like pension funds and endowments have committed $892 billion over the last decade to the energy transition, according to PitchBook. That’s 80% of all capital committed in the sector.

For some LPs, the investments come at the behest of beneficiaries, who are hoping their money will be put to work tackling climate change. For others, “it is simply good risk management and opportunity analysis,” Anikka Villegas and Sara Good write in their note. Whatever the case, the magnitude and durability of these investments over the past decade suggests that some of the largest investors in the U.S. are still expecting climate friendly technologies, many being commercialized by startups today, to deliver outsize returns in the coming years.