In the United States, less than 3% of venture capital (VC) funding is allocated to Black and Latinx founders, and funding to Black founders has decreased year over year since 2020. Additionally, Black investors constitute only 3% of the VC industry. These disparities are even more pronounced in the emerging field of climate tech investing, where data on diversity is even scarcer, making it difficult to assess representation and the distribution of capital to founders of color.

In entrepreneur support and investment spaces, specific and high-quality diversity data for the climate tech sector has been elusive. Conversations with professionals in climate tech venture capital reveal much anecdotal evidence that the investment space is predominantly white. However, anecdotal evidence is not a substitute for data. Gathering comprehensive data could pave the way for more inclusive outcomes across the sector by establishing a baseline of where we currently stand and developing shared metrics to track progress, not only in programmatic outcomes but also in overall ecosystem growth. Kayla Economou, portfolio manager at Elemental Excelerator, reinforces this point: “It’s important that we know what our baseline is as an industry. Finding disaggregated data in climate tech is especially difficult. We need to know where we’re starting from so we can move the needle accordingly.”

The role of data in advancing diversity and inclusion

Before joining Browning the Green Space — a nonprofit dedicated to advancing diversity, equity, and inclusion in the clean energy and climate tech sectors—I worked in energy analytics, where data served as a crucial decision-making tool. Data had the power to drive informed decisions, influencing everything from day-to-day operations to critical investment choices, such as COVID-19 mitigation strategies. Now, as the business development lead for Browning the Green Space, I leverage data not only to build a case for funding but also to evaluate the impact of our programming.

Image courtesy of Education Design Lab via Autodesk Foundation

Developing climate tech-specific diversity metrics has the potential to unlock funding and commitments aimed at advancing diversity within the sector. In 2023, the Barr Foundation, in partnership with Emerald Cities Collaborative, Browning the Green Space, nomada Consulting, and Ponder Analytics, conducted an assessment of the clean energy workforce development ecosystem in New England. This research aimed to engage other foundations on the topic and inspire additional philanthropy. One of the key insights was that more capital can be catalyzed by making opportunities more visible. The assessment revealed that “funding high-quality clean energy jobs and increasing access to those jobs for people of color is a priority for many funders surveyed,” but only a select few funders provide most of the resources for equitable workforce goals within climate and clean energy. This research highlighted the abundant opportunities for philanthropy to engage in climate and clean energy workforce development. Could similar research in the climate tech investing sector support inclusive climate startups and nonprofits in securing additional resources?

Students from FAME USA. Image courtesy of FAME USA via Autodesk Foundation

As an entrepreneur support organization, Browning the Green Space relies on data to develop relevant, high-impact programming. We ask ourselves critical questions: Where in the startup lifecycle are climate entrepreneurs of color most underrepresented? What can this reveal about key points for intervention? Are there characteristics unique to climate technologies that exacerbate or lessen the challenges entrepreneurs face?

The Women in the Workplace research initiative by McKinsey & Company and LeanIn.Org, now in its ninth year, which collects data from 27,000 employees at 276 organizations has not only highlighted the “leaky pipeline” trend in women’s careers but also uncovered important nuancesFor instance, the biggest hurdle isn’t reaching the C-suite but getting promoted to manager — the first rung of the career ladder. These insights were gathered through identity gaps in research and data around women in the workplace. Since gathering this data the insights collected have informed responses at the individual, company, and systems levels to address and mitigate these trends. Similarly, what might we learn from data and insights into the entrepreneurial journey of climate entrepreneurs of color if we filled data gaps?

Kameale & Evette from ChargerHelp!. Image courtesy of ChargerHelp! via Autodesk Foundation

Where is the climate tech diversity data and how much do we need?

Just how underrepresented and undercapitalized are diverse funders and founders in the climate tech sector? No one knows for certain. Within the climate tech innovation ecosystem, anecdotal evidence suggests that the investment disparity is at least as significant as in the broader innovation ecosystem. However, there is little data available to substantiate this.

Where in the startup lifecycle are climate entrepreneurs of color most underrepresented? What can this reveal about key points for intervention?

One of the challenges is the lack of consistent taxonomy and definitions. Companies in the climate tech space may be spread across various sectors, such as utilities or construction, making data collection difficult. This challenge is further compounded by the inconsistent definitions of diverse businesses. For example, the National Minority Supplier Development Council (NMSDC) certification standard focuses on ownership (at least 51% of the business) and who holds the highest officer position, whereas Crunchbase defines Black-led firms as those with at least one Black founder or leader.

However, as the climate tech sector matures, these challenges, though significant, are not insurmountable.

Image Courtesy of Education Design Lab via Autodesk Foundation

Perhaps the more pressing question is, “How will we know when we have enough data?” At what point does the persistent demand for more data become a barrier to actual progress? Julianne Zimmerman, managing director at Adasina Social Capital and General Partner at Malaika Ventures, believes we already have sufficient data to rethink preconceptions about risk and opportunity, and revise investment theses and lending criteria accordingly. “Over the past decade or so, I’ve seen this persistent demand for more data serve as a barrier against actual progress.” warns Zimmerman.

Let’s work together to harness data for equitable decisions

Data is a powerful decision-making tool. When collected, analyzed, disseminated, and used equitably, it can drive informed decisions and foster more inclusive outcomes across the climate tech sector. This requires ensuring that data collection methods are inclusive and representative of all communities, geographies, and technologies, enabling us to understand and address disparities effectively.

Achieving this is within our reach. Here are some actions we can take to bring more visibility, nuance, and understanding to the climate tech sector. These recommendations align with Browning the Green Space’s core values of Community First, Climate Justice, Trust, Transparency, and Collaboration that guide our approach to decision making. We acknowledge the existing asymmetry in access to information for the Black and Brown communities we seek to support, and strive to operate authentically and develop relationships founded in mutual respect. We believe in getting the work done together, not in competition with one another, and to serve and center Black and Brown communities in all elements of our work.

• Analyze with equity in mind. Ensure an equitable approach to data collection and analysis by actively including diverse perspectives and experiences. This means drawing on the work already done by underrepresented groups and having organizations led by these groups take the lead in gathering, analyzing, publishing, and disseminating the data.
• Define the vision. Focus data collection efforts on what truly matters. Clearly articulate the decisions that the data will inform and the barriers we seek to address.
• Establish a shared vocabulary. Develop common terms and definitions to ensure all stakeholders have a mutual understanding of key concepts and metrics. This involves updating classifications and categories to better capture the nuances of both technologies and communities.
• Earn community trust. Build trust and accountability through open and transparent data processes — allowing stakeholders to see how data is collected, analyzed, and used. Provide opportunities for feedback on data processes and findings.
• Commit to transparency and protect privacy. Make anonymized data publicly available in accessible and secure formats. Provide detailed documentation on data collection methods, analysis techniques, and any assumptions or limitations.

As organizations like Browning the Green Space, the Autodesk Foundation, and other stakeholders — including philanthropic foundations, entrepreneur support organizations, financial institutions, venture capital firms, and nonprofits — work to build the pipeline of climate tech entrepreneurs and investors of color, baseline and ongoing data will be crucial for tracking the impact of our support models, investments, and ecosystem-building efforts. Resolving the identified data gaps is urgently needed to more effectively advance equitable investment in climate tech and truly promote climate justice.

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This article is part of series of insights on emergent topics in inclusive climate innovation from Entrepreneur Support Organizations (ESOs) that are part of the Autodesk Foundation’s Inclusive Climate Innovation Initiative (ICII). ICII pieces highlight barriers and provide actionable insights to foster a more inclusive funding ecosystem. Through this initiative, the Autodesk Foundation awarded grant funding to four ESOs addressing capital and resource inequities for climate tech founders: Browning the Green Space, Elemental Excelerator, New Energy Nexus, and LabStart Innovations.