Corporate net zero strategy—Opportunities in start‐up driven climate innovation

Abstract During the era of industrialization, over the period 1850–2019, the total anthropogenic emissions, caused by human activities, have been around 2390 billion tons of carbon dioxide. These concentrations are now higher than any time during the past 2 million years. Mitigating climate change is on top of the strategic agenda of most global leading enterprises. Climate change solutions demand unprecedented levels of innovation in technology, policy, finance, and business models. In this respect, the global innovation ecosystem is highly reliant on large corporations, research institutions, and academia. However, start‐ups are also in the core of innovation, and new start‐up businesses can accelerate and drive climate innovation. In this article, we discuss the role of start‐ups in corporate innovation and sustainability strategies, for mitigating climate change. We analyze the progress of start‐up businesses in driving decarbonization, identified as climate innovation. In addition to studying start‐up companies' deal counts, capital investments, and pre‐ and post‐valuations, we studied the industrial sectors in which the start‐ups in climate innovation businesses operate. The results show that the total combined 2000–2022 post‐valuation of climate innovation start‐ups was 27 billion EUR, and the share of these start‐ups and financial investments or deals grew by 2000% and 2811%, respectively. Our research highlights the importance of start‐up companies specifically in corporate innovation and sustainability strategies while implementing their highly ambitious corporate carbon zero targets and commitments.