By Julie Manley, Founder, Guiding Green LLC
The Sustainable Chemistry Investment Report Q4 2025, developed in partnership between Guiding Green LLC and the ACS Green Chemistry Institute, highlights a positive rebound in total capital but a challenging trend for early-stage investments.
Could 2025 be an early indication of a shift in the capital slide?
Annually, capital investment in sustainable chemistry has been steadily declining since 2021, yet 2025 was the strongest year in recent history with total investment on par with the year prior. This is a significant finding on its own, but, in the context that this report only evaluates 5 years dating back to 2021, it’s uncertain how long this downward trend has been occurring.
Are investors favoring safer, faster returns?
Deals exceeding $100M represented about half of the total capital in Q4 2025, helping North America outpace other regions for the first time since 2021. This investment trend is not unique to sustainable chemistry and may illustrate the bias toward prioritizing more advanced, less risky investments. These large deals represent a very small portion of the total deal count, meaning plenty of more modest deals are being made.
What is the impact on early-stage investments?
Funding to support early-stage innovation is crucial for long-term impact, yet 2025 data show a decline in deal count and capital associated with grants, accelerators, incubators, and even seed stage funds. Although this general trend is not unique to sustainable chemistry, growth segments such as artificial intelligence (AI) tend not to be subjected to the same outcome, and improvements should be seen as markets conditions stabilize. For early stage startups, vying for funding will continue to be a challenge. From an investor perspective, is this an opportunity to increase support for accelerators and incubators to expand their reach during this vital formation stage?
What can we learn?
A recent report commissioned by the Gordon & Betty Moore Foundation found that innovation and competitive advantage were the primary drivers for businesses willing to invest in green chemistry. Demonstrating performance, economics, and other competitive attributes, in concert with sustainability characteristics, are essential to increase investment potential.
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