Climate Solutions at an Inflection Point
How commercial realities, technology, policy, and rising demand are reshaping sustainability sectors
If you've been following sustainability news this year, it's easy to wonder whether momentum is slowing down. Our view is different: sustainability is not retreating; it's becoming more practical. Companies are looking for solutions that address operational challenges, whether that's scaling, mitigating climate risk, reducing waste, managing energy use, meeting reporting requirements, or increasing efficiency.
James Gerber, Ph.D. at Project Drawdown, describes the big picture well: global greenhouse gas emissions have risen nearly every year for the past half-century, with over 61% still coming from fossil fuels, even as many economies, including advanced ones, have begun decoupling economic growth from emissions.
Source: https://ourworldindata.org/grapher/co2-emissions-and-gdp-per-capita
The urgent need for sustainability hasn't changed. What has changed is how organizations are responding to it. A few years ago, the conversation centered on ambitious targets and long-term roadmaps. At London Climate Action Week, UN Secretary-General António Guterres emphasized that climate and energy challenges are now intertwined and require faster deployment of practical solutions. While greenhushing is real, and more common now than the greenwashing of the past, impact reports increasingly announce what organizations are doing rather than what they hope to achieve. Walmart's ESG Report notes that Project Gigaton helped its suppliers avoid, reduce, or sequester 1.2 billion metric tons of CO₂e by the end of 2025, ahead of schedule.
Organizations increasingly recognize that adaptation and mitigation are complementary. Companies are investing in decarbonization while also making operations more resilient, as shown by Microsoft matching 100% of its global electricity consumption with renewable energy, and Consolidated Edison's $3.9 billion investment to protect its grid against extreme heat. McKinsey projects climate resilience will be a $1 trillion industry by 2030.
At a high level, decarbonization and electrification are experiencing a tale of two realities, with structural and political headwinds in the US while picking up momentum globally. This creates an opportunity for investors and operators alike to identify where policy support and commercial demand remain aligned. At Tuck Advisors, we focus on mission-driven companies in high-potential sectors where scale, geographic expansion, complementary capabilities, or strategic combinations can accelerate positive environmental impact. Our current areas of focus include sustainable food systems, climate education and certification, heating and cooling, clean energy, and climate technology. Here's where we see the most interesting opportunities for growth and M&A in these sectors.
Food Systems
Food systems remain a key area of innovation and investment as companies and governments respond to the need for supply chain resilience, resource efficiency, and productivity. Population growth, resource constraints, and climate impacts are driving activity across alternative proteins, regenerative agriculture (including livestock and ranching), food waste, and biotechnology. Just the regenerative agriculture market is estimated to grow nearly 16% to $16.8 billion in 2026.
Alternative proteins have entered a more mature phase focused on cost competitiveness, consumer adoption, and integration into the food supply chain, following several years of strong investment and experimentation. Traditional food and beverage companies have emerged alongside ingredient buyers as some of the most active acquirers, targeting plant-based meat and dairy alternatives. We expect continued consolidation.
Food waste is also attracting investment, as companies look to cut costs and strengthen supply-chain resilience. Accounting for an estimated 8-10% of global greenhouse gas emissions, the food-waste market in 2025 is projected to reach $101.2 billion by 2030. Key trends include AI-driven waste prevention, scaled circular-economy solutions, measurement and reporting software, and larger retail partnerships. The most compelling opportunities combine environmental impact with a clear economic return. Solutions embedded in food supply chains are now favored over standalone applications.
Climate Education, Training and Certification
Climate education, training and certification are shifting from science-based content toward interdisciplinary, systems-based learning that leads to action, reflecting a broader understanding of climate change as a social, economic, and justice issue rather than solely a scientific one. This space has been reshaped by changes in corporate learning, workforce upskilling, and Testing, Inspection, Certification, and Compliance (TICC). The global sustainability certification market alone is valued at around $3.1 billion and is expected to double by 2035.
Several structural trends are shaping this sector: tech-enabled verification of net-zero claims, more sector-specific standards, greater integration of sustainability requirements into regulation, and building certifications that now address resilience, equity, and human health. Although total dollar volume in corporate learning and workforce upskilling declined from 2024 to 2025, M&A activity continues, particularly for smaller transactions, with buyers focused on AI-enabled platforms, recurring revenue, and scale. We see the greatest M&A activity today in TICC, where certification and compliance capabilities grow more valuable as sustainability requirements become more complex.
HVAC Market
The global HVAC market is expected to grow to $408 billion in 2030. A transition to all-electric heat pumps would provide a significant climate benefit, especially when powered with clean energy. Continued investment is expected as building electrification accelerates, with the global market projected to exceed $200 billion by 2033.
The HVAC services market, large, fragmented, recurring, and essential, is the most attractive part of the HVAC market for M&A, including heat pump installations. Buyers and sellers can still capture the rewards of an energy transition in its early-to-middle stages, though we're past the stage of high premiums. Now is the time for strategic and financial partners who can help sometimes fragmented local owners scale.
Sustainable Energy
Sustainable energy had a record year in 2025. Amid conflicts in the Middle East, sky-high fossil prices have delivered a boost for renewables worldwide, and many of today's fastest-growing industries, from AI to advanced manufacturing, face the same question: where will the energy come from? The Renewable Energy Institute tracked $690 billion invested in renewable energy and $2.3 trillion invested across the broader clean energy transition, including power grids and electrified transport. This contrasts sharply with fossil-fuel investment, which fell for the first time since 2020, as clean energy investment surpassed it for the second year in a row.
Source: IEA, World Energy Investment 2025, International Energy Agency, 2025. https://www.iea.org/reports/world-energy-investment-2025
As electricity demand grows, organizations are looking to expand and optimize renewable energy solutions while improving reliability and affordability at scale. Despite policy uncertainty, investment has continued in battery storage, grid infrastructure, and energy-efficiency technologies.
These trends are also influencing M&A. Renewable projects continue to attract large private capital, while strategic buyers increasingly look beyond power-purchase agreements to secure energy supply directly. The NextEra-Dominion merger and Alphabet's acquisition of Intersect Power illustrate the broader trend toward consolidation and vertical integration.
Climate Tech
Climate tech is a broad and rapidly evolving sector, with batteries and energy storage among the most important technologies for the energy transition, spanning grid-scale storage, electric vehicles, manufacturing, recycling, and second-life applications. As energy demand rises with AI expansion, so does battery demand.
Global lithium-ion battery demand has grown sixfold since 2020, with battery investment reaching $66 billion in 2025. Batteries remain crucial for the energy transition, but their production requires pollutant-heavy mining and emissions-intensive manufacturing. Extending lifecycles through reuse and recycling can help reduce these impacts. The battery recycling market is projected to grow to $91.7 billion by 2034 (a CAGR of 14%), and companies are developing alternatives to conventional lithium-ion technology, including sodium-ion, solid-state, redox-flow, lithium-sulfur, and zinc-based batteries.
We're particularly interested in businesses that can extend battery lifecycles, recover valuable materials, or improve the performance and economics of renewable energy storage. Take long-duration energy storage (LDES) batteries like iron-air, or "rust," batteries. Form Energy has attracted attention because its lithium-free, iron-air batteries store energy at less than 1/10 the cost of lithium-ion. As the sector matures, we expect M&A to favor technologies with demonstrated commercial applications, differentiated IP, and clear pathways to scale.
Another high-growth segment is sustainability software, valued at approximately $1.2 billion in 2025 and projected to see a 20.1% CAGR from 2026 to 2033, driven by demand for carbon accounting, ESG reporting, and compliance platforms. It's consolidating and drawing increased investor interest. Blackstone's exploration of a $3 billion sale of sustainability software provider Sphera in 2025 reflects continued private equity appetite for environmental compliance platforms. Profitability has become more of a priority among corporate strategic acquirers, who have driven over 80% of climate tech M&A since 2021.
Climate Trends and Solutions on Future-Watch
Climate volatility. More frequent and severe climate events are likely, and the biggest phenomenon to watch may be the predicted El Niño in the Pacific, expected to unleash its force in late 2026 or 2027, bringing temperatures on Earth like never before. The World Economic Forum describes this as a "systemic shock" to global markets, though some sectors are poised to profit, including climate-risk analytics, resilience consulting, cooling technologies, and climate-adapted agtech.
Nature-based solutions. An increasingly important investment theme as companies move from pilot projects toward portfolio-scale investments in natural assets. Private investment in nature exceeded $14 billion in 2025, a fivefold increase from 2016, with investors earmarking more than $180 billion for future nature-related investments.
Carbon credits. Evolving: after years of controversy over low-quality credits, buyers are increasingly realizing the value of high-integrity credits. At the start of 2026, Microsoft signed a record 2.85 million-credit soil carbon removal agreement with Indigo Carbon, showing corporate demand still exists for large-scale, high-quality removal. Organizations like the Integrity Council for the Voluntary Carbon Market (ICVCM) and the International Emissions Trading Association (IETA) have prioritized higher quality standards and transparency.
Looking ahead, we expect the focus on practical climate solutions to continue. Across sustainability sectors, M&A is increasingly favoring businesses that combine environmental impact with clear operational or economic value. We're privileged to learn from the entrepreneurs and operators building these businesses and to connect them with the capital and strategic opportunities that can accelerate their impact, a vision that motivates our work every day.
— Lisa Bowers, Jack Ryan, and Maple Siu
Note: The content and thoughts above are our own, although we relied heavily on industry research and thought leaders linked throughout. ChatGPT was consulted for help with taxonomy, organization, and framing select concepts for clarity.