Scaling regional industrial strengths is becoming central to the UK’s climate tech ambitions, according to a report from Barclays and Sustainable Ventures. The findings point to strong foundations across the country, from Scotland’s renewables to the North East’s offshore wind and the Midlands’ electric vehicle batteries and clean transport expertise. These regional clusters are backed by academic and industrial capabilities, but widening gaps between London and other parts of the UK risk slowing the growth of promising companies.
Across all regions the climate tech industry already supports more than 72,000 jobs and received £15.5 billion in investment between 2020 and 2024 alone. Yet investment remains heavily concentrated in the capital, and in 2024, London captured 66% of all UK climate tech funding. This imbalance is restricting growth of early-stage climate tech companies, and nearly half in the North West, Yorkshire and the West Midlands fail to progress beyond their first funding round. The report calls for nationally consistent but regionally tailored climate tech plans tied to Industrial Strategy Zones and Local Growth Plans, with support from the British Business Bank, GB Energy, and the National Wealth Fund. It also recommends simpler grant processes and faster integration of the UK Business Climate Hub into the Business Growth Service to improve capital flows to early-stage firms.
The report also identifies uneven access to accelerators as a barrier to scale. Climate tech companies participating in accelerators have higher average valuations of up to 10% (£13.2 million versus £12 million), but participation is inconsistent across the UK. Scotland and Northern Ireland lead with 46% and 47%, but this drops to 24% in the North West and 21% in Yorkshire and the Humber. Some non academic founders also face difficulties navigating university-linked programmes. A connected national network of climate tech accelerators and hubs, with stronger commercial support, is presented as a way to close that gap.
Artificial Intelligence is emerging as another source of regional inequality. In 2024 Artificial Intelligence-enabled climate tech accounted for 36% of the UK’s total climate tech investment, 96% of which was in software-led ventures typically clustering around London, the South East, and the East of England. The report argues that hardware-led climate tech companies need better access to Artificial Intelligence education and support, including dedicated “Artificial Intelligence for hardware” modules within accelerator programmes, so regional businesses are not left behind as investment patterns shift.
