Innovation Meets Climate: The New Risk Landscape for Startups

Australia’s climate innovation ecosystem is broader and more dynamic than ever. A new generation of ventures is tackling problems at every level of the economy, from how energy is generated to how consumers live and move. 

Some are applying artificial intelligence to detect inefficiencies and cut waste, as seen in the work of Machine Vision AI. Others, like Refilled, are making reuse practical with smart refill stations designed to reduce single use plastics. In mobility, Turo is experimenting with shared access models that shift how communities think about vehicles, while firms such as Vincents are giving early ventures the support needed to scale responsibly. 

The innovation extends into energy. Flow Power is rethinking how businesses buy renewable power, while Amber is changing how households access it. On the measurement side, Avarni is developing tools that help organisations track and report emissions, and 100 Percent Renewables is guiding companies on their path to decarbonisation. 

Together, these ventures illustrate the sheer diversity of climate innovation in Australia and the speed at which ambition is turning into action. 

For many climate tech ventures, intellectual property is their single most valuable asset. Algorithms, data sets, or unique processes often hold more value than physical assets. Yet disputes are increasing worldwide ~ a well known US case saw two battery startups locked in years of litigation over trade secrets, delaying the market itself. 

If a competitor challenged your technology tomorrow, how quickly could you defend your edge and would you have the resources to do so? 

Climate tech is global by design, but that creates fragility. Lithium, rare earth minerals, and semiconductors are all concentrated in a handful of regions. When supply chains stall, startups without bargaining power feel the shock first. 

For hardware ventures like refill stations or battery-enabled solutions, a missing component can mean missed contracts or lost funding milestones. For digital platforms, dependency on third-party cloud providers or data sources can create similar risks. 

Have you considered how a disruption in critical materials or in the services your tech relies on would impact your delivery obligations and contracts? 

The ACCC has already taken action against greenwashing, and in 2023 found more than half of environmental claims it reviewed to be potentially misleading. Climate tech companies face the pressure of proving impact with credible data. 

Beyond scrutiny, contracts themselves create liability. Entering partnerships or serving large enterprise clients can push risk onto the startup, sometimes beyond what founders realise. Cross-border deals may even expose liability under overseas laws. 

When you sign a new contract, are you clear on whether the obligations expose you to risks that your current protections would not cover? 

Every climate tech venture depends on a small, committed team. That concentration of knowledge is both a strength and a vulnerability. Australia has fewer than 10,000 advanced climate tech workers, and competition for skills is intense. Losing a single hire, or facing founder burnout, can delay delivery at critical stages. 

Investors increasingly look at governance, culture, and resilience alongside the technology itself. A brilliant platform will struggle to scale if the team cannot sustain growth. 

If one key hire left tomorrow, would your business still be able to deliver on promises to investors and clients? 

Climate tech founders often see insurance as something operational like a box to tick. Investors see it differently. To them, resilience is valuation. 

A brilliant platform will not attract funding if it collapses after a cyber incident. A novel emissions tool will not win enterprise clients if its data cannot withstand scrutiny. A mobility app will not scale globally if its contracts expose it to liabilities it cannot afford. 

The investor question is not only “What is your solution?” but “Can your business withstand shocks long enough to deliver it?” 

That shift from ambition to resilience is reshaping how climate tech companies are judged in due diligence. 

For climate tech companies, exposures rarely sit in neat silos. An emissions modelling tool is at once providing professional advice, managing sensitive data, and exposing itself to liability if errors ripple through a client’s operations. A mobility app might face regulatory challenges for its claims at the same time as cybercriminals target its customer base. 

This overlap is why tech liability is becoming central for climate tech ventures. Instead of treating risks separately, it blends protection across three fronts: 

• Professional Indemnity: When algorithms, analytics, or advisory outputs are relied on for investment or compliance, a single error can spark claims of negligence. Could your venture defend its reputation if your work was challenged? 
• Cyber: Digital-first startups are prime targets for ransomware and data breaches. A platform outage or data leak can damage both operations and trust. If your system went offline tomorrow, would you have the resources to recover? 
• General Liability: Even in digital businesses, real-world exposure exists. From client site visits to product demonstrations, third-party injury or property damage can still derail growth. If your tech failure caused harm, who would carry the liability? 

The benefit of combining these into one framework is simplicity. Instead of wondering which policy responds when multiple risks overlap, IT Liability removes ambiguity: one insurer, one response. It also delivers pricing efficiencies compared to managing three standalone policies. 

For founders, having these protections in place creates breathing space to innovate boldly. For investors, it signals foresight and governance maturity, proof that resilience is embedded in the business model. The question every climate tech leader should ask is: How confident are you that your company could withstand these pressures without the right protections in place? 

Climate innovation is one of the most exciting frontiers of entrepreneurship. Australian ventures like Machine Vision AI, Refilled, Turo, and Avarni illustrate the diversity of ideas being built right now. 

But the reality is clear. Growth and exposure always travel together. The climate crisis demands bold ideas, but bold ideas demand foresight. The companies that succeed will not be those who ignore risk, but those who integrate resilience into their DNA. 

The question is not whether risks exist, they always will. The question is whether your business is prepared to sustain them and keep moving forward with confidence. 

_{DISCLAIMER: This information is provided to assist you in understanding the risks, implications, and common considerations for your industry.  It does not constitute advice and is not complete. Please contact Knightcorp Insurance Brokers for further information.} 

_{DISCLAIMER: Third-Party Links: This article may contain links to external websites or content operated by third parties. These links are provided for your convenience and information only. Knightcorp Insurance Brokers does not endorse, approve, or accept responsibility for the content, accuracy, or security of any externally linked site.} 

_{Please note that any third-party websites are not covered by Knightcorp Insurance Brokers’ policies or procedures. We make no representations about the suitability of any information, product, or service contained on those sites for your needs. Use of third-party links is at your own risk, and we recommend reviewing their terms, conditions, and privacy policies.} 

_{For advice specific to your insurance needs, please contact your Knightcorp Insurance Brokers directly.}