Australia is at a critical juncture. The global transition to a net-zero economy is no longer speculative, it’s underway and accelerating.
The nation has everything it needs to lead: world-class research, abundant natural resources, and strong research institutions, but Charlotte Connell, head of impact at Greenhouse, said the issue is how funding is being deployed
“We don’t have a climate innovation problem, nor do we have a climate capital problem, we have a climate capital deployment problem. And we risk squandering our comparative advantage if we don’t act fast,” she said.
The Catalysing Climate Capital report, produced by Greenhouse with the support of the City of Sydney, offers the first in-depth playbook for accelerating climate innovation and investment across Australia and the often-overlooked Southeast Asia region.
Drawing on insights gained from hosting Australia’s leading climate innovation and investment summits, deep research and, over 20 interviews with leading investors, founders, policymakers and ecosystem builders, the report maps out how we can bridge critical funding gaps, unlock private and institutional investment, and scale world-class climate solutions.
Greenhouse’s research indicates that the primary challenge is not a scarcity of funds or solutions, but rather a fragmented ecosystem, risk aversion, and misalignment of incentives across various capital providers.
Principal Ben Lindsay believes it ultimately comes down to risk versus reward.
“We’re seeing a lot of former infrastructure and investment banking professionals leading the charge in venture capital. The challenge is they’re applying a conservative, project-finance risk lens while expecting venture-scale returns, and that’s where the mismatch lies, ” he said.
“Venture investing is a different game entirely, uses different decision-making muscles, and prior track records in other asset classes don’t always translate into the kind of judgment early-stage VC demands.”
Amanda Goodman, partner from the recently launched Planet Fund argues there needs to be a new playbook when it comes to climate.
“We need to rethink how we finance climate solutions and how we approach risk,” she said.
“I urge those with capital and those committed to the space to set aside traditional playbooks and return to first principles: what are we trying to achieve, and how can we structure deals to get there? We’re facing fundamentally different challenges, and that demands a fundamentally different approach.”
Rather than dwelling on the multiple valleys of death, this report highlights the innovative funding pathways and innovative funding structures that can scale climate and nature. How it can be done! A new innovative approach to funding climate
The report features Australian case studies of innovative funding models and alternative pathways, including NRN which recently secured $67.2 million to scale climate tech hardware with a blended approach including $50m in debt and $17m in equity; early-stage VC Investible and the federally funded TRaCE program sharing early-stage risk through a blended funding model that recycles returns; and Wedgetail Ventures and Wedgetail Foundation combining concessional grants alongside equity investments to fund regenerative nature and climate projects.
Charlotte Connell
“Catalysing climate capital is no longer a theoretical exercise. It is happening through blended finance, new taxonomy alignment, and early signs of institutional appetite shifting toward climate-aligned assets,” Connell said.
“Yet the system remains incomplete. The greatest barrier is not invention, nor investor will but the absence of a trusted institutional bridge: a mechanism to de-risk, translate, and sequence finance across the stack. We need ecosystem stewards to build the connective tissue between government ambition and an investable pipeline.”
The Greenhouse head of impact said the next decade is one of deployment.
“That means embracing complexity, backing FOAK infrastructure, and embedding demand-pull into industrial strategy. It means designing finance to fit technology, not the other way around,” Connell said
“And it means unlocking the latent power of philanthropy and superannuation, not as passive checkbooks, but as active shapers of climate outcomes. We can shift from laggard to architect, from capital-rich but deployment-poor to a benchmark of catalytic climate investment. The task is urgent and the opportunity is real. What we do in the next five years will shape not just emissions trajectories, but the economic architecture of a net-zero future.”
Download the Catalysing Climate Capital report here.
