HSBC has pledged $1bn of financing for early-stage climate tech companies after saying that support for the sector has “plunged” this year.

The British multinational investment bank will support start-ups working on tech including EV charging, battery storage and carbon removal technologies, it announced today (Wednesday).

Barry O’Byrne, CEO of global commercial banking at HSBC said: “Access to finance is critical for early-stage climate tech companies to create and scale real-world solutions.”

“We are already working with some of the most exciting companies at the forefront of climate tech, from seed to global scale-up,” he said.

“With HSBC’s global reach, in-house climate tech expertise, and newly launched Innovation Banking proposition, we can offer these pioneer companies unrivalled support.”

HSBC said it is deepening its support for green tech after recent data showed that, following years of rapid growth, venture capital funding for climate start-ups “plunged” by 40% in the first half of 2023.

This was as “market conditions in the venture capital space put downward pressure on nascent tech valuations.”

HSBC said its climate tech funding “aims to enable these critical technologies to reach the market more quickly at scale."

It continued that, while most global early and growth stage climate tech investment has focused on the US and Europe, its funding plans to focus on companies “wherever they are in the world.”

Estimates suggest almost half the emissions reductions required to reach net zero in 2050 will come from technologies that are currently at the demonstration or prototype phase, it said.

Last year, HSBC invested $100m in Microsoft founder Bill Gates’ Breakthrough Energy Catalyst, a private-public capital-based initiative to accelerate the development of clean-energy technologies in line with global net-zero emissions targets.