Turning Innovation into Climate Impact: A Playbook for Engineering Startups

Climate change is one of the defining challenges of our time. In 2024, Earth recorded its hottest year on record. The UK exceeded 40°C for the first time, with researchers from Imperial College London showing this was made 100 times more likely by climate change. 

NASA data confirms that global temperatures have now risen by 1.28°C above 20th century averages. The Paris Agreement, signed by 196 countries, calls on all of us to keep global warming well below 2°C, ideally 1.5°C. The need for practical and urgent climate action has never been more evident. Yet this crisis also brings a powerful opportunity to create a more just, healthy and resilient society, and to move decisively toward the UK’s net zero target by 2050. Engineers and entrepreneurs have a crucial role to play in shaping this transition. 

Engineering solutions at the centre of climate action

Reaching net zero will require a transformation across all areas of our economy from energy and transport to construction, manufacturing and agriculture.  

The world is changing rapidly and at the Royal Academy of Engineering we believe that engineers and innovators are uniquely placed to respond to that change and develop  solutions to the challenges it presents. The UK’s success in this transition will depend on how effectively it nurtures innovation alongside a systems approach. Through our Enterprise Hub, we have supported over 600 entrepreneurs who are developing deeptech innovations and many of those have the potential to contribute towards decarbonisation or create solutions that address these challenges.  

But we know innovation must be responsible. Our aim is to support these businesses to grow sustainably, align with long-term climate goals and respond to future challenges. 

Early-Stage Companies Need Better Climate Tools 

Startups often want to understand and communicate the environmental value of their work. However, limited time, small teams and a fast-moving regulatory environment can make this difficult. Many do not yet have the tools or frameworks to approach sustainability in a meaningful way. 

That is why we developed the Climate Impact Playbook: a practical Playbook for engineering and technology startups, created in partnership with Systemiq. 

The Climate Impact Playbook – a free resource to help Hub Members tackle decarbonisation and drive long-term value 

The playbook offers a structured approach that helps early-stage businesses assess and describearticulate the climate impact of their innovation. Rather than focusing on emissions reduction directly, it equips startups to better understand their place in the climate ecosystem and share that insight clearly with investors, customers and partners. 

It is built around four key pillars 

1. Global Challenge – Understanding the wider climate crisis and the scale of transformation needed across systems. 
2. Climate Solution – Examining emissions reduction potential, how the innovation contributes to decarbonisation, and opportunities for scaling its impact. 
3. Sustained Impact – Exploring how a business can grow without increasing its environmental footprint and address long-term risks. 
4. Externalities – Assessing both the positive and negative outcomes that may arise as the business expands.

Why understanding your climate impact is crucial

Sustainability regulation is evolving quickly. The UK’s Sustainability Disclosure Requirements (SDR) and the EU’s Corporate Sustainability Reporting Directive (CSRD) are reshaping expectations. The importance of environmental performance can be seen elsewhere too in the actions of regulators, for example, in 2024, Ofwat fined water companies over £150 million for missing pollution and leakage targets 

At the same time, investors and consumers are demanding credible, sustainable innovation. Startups that understand and can clearly communicate their environmental contribution are more likely to secure funding, build partnerships and earn trust. 

This shift presents a major opportunity for the UK’s innovation ecosystem. The Climate Impact Playbook helps founders integrate sustainability into their business model, not just as a compliance measure, but as a driver of long-term value. 

A systems approach to net zero 

The journey to net zero will not be achieved through individual actions alone. It requires a systems-level response across technologies, industries and behaviours. The Royal Academy of Engineering and the National Engineering Policy Centre highlight the importance of a whole systems approach. This involves recognising the interconnected nature of infrastructure, policies, commercial models and the behaviours these shape. 

Engineers bring the thinking and technical ability needed to respond to this challenge and to realise  the shift decarbonised and sustainability futures. Whether designing electric freight systems, retrofitting buildings or scaling carbon capture, engineering-led innovation will be central to delivering climate solutions that work in the real world. 

Supporting the climate leaders of the future 

The Climate Impact Playbook is one of several ways the Academy is working to strengthen climate-focused innovation. It supports founders across sectors to align with evolving policies, embed sustainability into research and development, and think systemically about scale and impact. 

It also helps connect the work of entrepreneurs with the broader aims and efforts of the National Engineering Policy Centre and the UK's net zero strategy. As engineers and innovators adapt to global sustainability goals, this kind of structured guidance becomes increasingly vital. 

By using the playbook, startups can build stronger reporting capabilities, navigate complex climate regulations and create businesses that are both impactful and resilient. In doing so, they contribute to a wider movement of responsible innovation that is essential for achieving the UK’s climate ambitions. 

"The challenge for many sustainability founders is quantifying the impact of their solutions, especially when the Carbon footprint savings may be from the supply chain or indirect. The climate impact playbook enabled us to get third party provided quantitative measures of the CO2 saving, massively speeding up the sustainability due diligence during a venture fundraise. We used it to fast track the process for being SFDR article 9 fund compatible and speed up the ESG product related due diligence, culminating in a £16.9m Series A fundraise."- Henrik Hagemann, CEO and Co-Founder of Puraffinity