If you needed a metaphor for this year’s London Climate Action Week (LCAW), the weather provided one free of charge. Record temperatures pressed down on the capital throughout the week – the kind of heat that, not long ago, would have been described as exceptional. Today, it is simply summer. That shift in baseline is precisely what LCAW 2026 was grappling with: not the question of whether climate change is real, but how fast capital can move to do something about it.
From ambition to execution and about time, too
For years, sustainability events have been long on aspiration and short on specifics. LCAW 2026 felt meaningfully different, examining where the credible, structured, transaction-ready opportunities actually are.
That shift has been building for some time, and the numbers from the broader private markets’ context underpin it. PE deal value in clean energy reached a record $63.8 billion[1] in Q1 2026, with the three largest quarters on record all occurring since the start of 2025. Meanwhile, grid infrastructure ranked as the second largest clean energy PE segment at $5.7 billion[1], reflecting the growing need for transmission capacity and storage to manage the intermittency introduced by rising renewable energy adoption.
Globally, 81% of institutional investors plan to increase their private market allocations over the next five years, with the proportion of institutions holding more than 20% of their portfolio in private investments projected to nearly double, rising from 29% today to 51% . Private infrastructure, private credit and private equity now occupy the top three positions for planned allocation increases, a ranking they have held for five consecutive years. [2]
Climate and clean energy sit squarely inside that trend. 64% [2] of institutional investors surveyed agree that projections of rapid growth in energy demand over the next decade are strengthening the investment opportunity set for clean energy. The AI infrastructure build-out is part of that story, too: data centres and the energy systems required to power them are driving demand in ways that were barely on the agenda five years ago.
The heatwave in the room
The sweltering week was more than symbolism. It brought into sharp focus what physical climate risk actually looks like when it lands on balance sheets. UK flood-related insurance losses reached £585 million in 2024. More than 38,000 claims were filed following severe storms. Agricultural revenue fell by nearly £900 million year on year, with close to 5% of UK crops lost to extreme weather events. These are not distant projections. They are last year’s figures. [3]
Key events
LCAW featured numerous events across the capital, bringing together investors, policymakers, businesses and innovators. Some of the standout events included Reset Connect, The Climate Innovation Forum, the Nature Hub, the Net Zero Delivery Summit, the Sustainable Finance Summit, Finance Live and numerous roundtables focused on climate finance, biodiversity, clean energy and resilience.
Among these, Reset Connect and the Climate Innovation Forum were particularly notable for their focus on mobilising capital and scaling climate solutions. At Reset Connect, Robert Timms, Director at Earth Capital, served on one of the Pitch & Invest judging panels, highlighting the importance of investment-ready businesses. As he noted: “There is an incredible range of businesses out there using innovative technologies to tackle different aspects of the climate challenge. The question is whether they can get the funding they need to successfully apply those technologies at scale.”
Meanwhile, the Climate Innovation Forum also focused on scaling proven technologies, with former US Vice President Al Gore concluding that while the transition to renewable energy is inevitable, the defining challenge is whether it will happen quickly enough. His message reflected the week’s central theme: the challenge is no longer innovation, but execution, scale and capital deployment.
The honest constraint
For all the momentum, LCAW 2026 did not shy away from the difficult reality of the moment. Dry powder for private market drawdown funds has been declining for nearly two years, on the back of four consecutive years of fundraising drops. Until GPs better align their interests with those of LPs by returning capital through truly exiting portfolio investments and providing a genuine value-add model, managers will continue to struggle to raise drawdown fund capital.
In the clean energy and climate context, that translates into a specific challenge: deals need to reach the exit stage to recycle capital into the next wave of investment. The pipeline of exits is building. Forgent Power Solutions’ $7.8 billion IPO in February 2026 was the standout transaction of the quarter, but the broader market needs more of these.
The other constraint, heard repeatedly through the week, is the mismatch between where climate capital wants to go, early-stage nature solutions, adaptation infrastructure, the Global South, and where the risk-return frameworks of institutional investors currently allow it to travel. Blended finance, derisking mechanisms and transition-focused credit instruments are all part of the answer, but scaling them remains slow work.
The bottom line
LCAW 2026 was the most commercially serious edition yet. The conversation has moved on. Climate and nature are no longer competing with financial returns for a seat at the table; they are shaping the investment thesis across infrastructure, private equity, credit and real assets.
Sources:
- PitchBook Q1 2026 Clean Energy Report, published 15 June 2026;
- PitchBook Q1 2026 Global Private Market Fundraising Report;
- UK flood and agricultural impact data from the Green Finance Institute report on business investment in nature.
