From Hunch To Hard Science: Why Smart Clean Tech Investing Starts With Good Data

Forbes

11-07-2025

Michele Demers, Founder & CEO of Boundless Impact Research & Analytics.
Clean tech investing has matured well beyond the early days of intuition-driven bets. I've seen firsthand that even the most seasoned investors can fall into the trap of relying on optimistic forecasts and surface-level emissions data. Most serious investors recognize that we've moved beyond gut instincts. But while environmental data is more available than ever, much of it is still used to support a good story instead of validating whether that story holds up to scrutiny.
To separate promise from proof, venture capitalists should rely on two science-based tools: Life Cycle Assessment (LCA) and Techno-Economic Analysis (TEA). These are not nice-to-haves. They are essential if you want to understand whether a technology can actually compete in the real world.
Life Cycle Assessment: More Than Just A Carbon Number
Life Cycle Assessment measures the environmental footprint of a product or technology across its entire life cycle—from raw material extraction to production and delivery. It's the only method that offers a statistically rigorous, cradle-to-gate analysis of environmental performance. It evaluates emissions, toxicity, resource use and other critical indicators that self-reported data almost always overlooks.
Unlike estimation-based reporting, LCA follows internationally accepted ISO standards and is widely used by federal agencies, including the Department of Energy and the Department of Agriculture. Most sophisticated investors and institutions now insist on this level of rigor. They rely on LCA to validate technology claims and reduce exposure to unproven or underperforming products.
At Boundless, we work with both investors and innovators to provide third-party validation. Our process includes benchmark comparisons, expert review and comprehensive analysis of multiple environmental indicators. There are times when companies are genuinely surprised by the results—like the biopesticide company we assessed that had great toxicity performance but a poor GHG footprint because no one had thought through the logistics of their supply chain. LCA caught what conventional diligence didn't.
Techno-Economic Analysis: The Business Reality Check
While LCA clarifies environmental impact, TEA focuses on cost and scalability. In other words, TEA is about whether the economics make sense once you move past the pilot phase. It breaks down capital and operational expenses to a granular level. Investors often have to consider the theoretical performance of new tech. TEA helps move theory to reality.
TEA is especially useful in identifying gaps or inefficiencies in production processes, energy usage or sourcing decisions. I can't tell you how many times we've seen a company with an impressive emissions reduction per unit but costs that skyrocket because they're flying materials or integrating parts of their supply chain halfway across the globe. These considerations are easy to overlook, but they can undermine a company's long-term competitiveness.
Both assessments serve as reality checks. They protect investors from the reputational, regulatory and financial risks of greenwashing. They provide the level of clarity needed to guide investment decisions in a space filled with novel ideas and technical complexity.
Avoiding The 'Valley Of Death'
The funding gap between early seed capital and commercialization is commonly called the 'valley of death.' This stress-filled stretch of go/no-go is difficult for new companies to navigate. It used to take six weeks to raise a Series B; now it can take six months or longer.
Without strong data to support claims, even promising companies can stall during this critical phase. A credible LCA helps bridge that gap by offering the robust third-party validation investors increasingly require. In my experience, the companies that invest in a serious LCA are the ones that get funding faster because investors trust the numbers. It accelerates trust, unlocks funding and prevents companies from being stranded just short of scale.
For startups, investing in a quality LCA often proves less costly than the months lost chasing capital without it.
What Investors Should Expect
A clear view of a company's environmental footprint also sheds light on its supply chain resilience and technical feasibility. If you're looking at a battery startup, for example, you have to ask: Are they dependent on minerals sourced from regions with geopolitical risks? What happens to their margins if the price of lithium doubles overnight?
If you're investing in clean tech, here are five things to look for in a reliable LCA:
Quality matters. Weak or self-produced assessments can look fine on a spreadsheet but fall apart when regulators or customers start asking questions. They can mislead investors and backfire on companies when challenged.
Evidence-Driven Investing
Environmental data should be treated with the same rigor as financial data. Yet too often, it's still used to support narratives rather than drive decisions. If you're an investor, you have to insist on proper third-party LCAs, because shortcuts here can lead to big losses later.
Investors need to educate themselves on what makes environmental analysis credible and insist on third-party assessments as a baseline for due diligence. Done right, LCA and TEA can identify risk while simultaneously revealing opportunity.
Clean tech is too important—and too complex—to rely on instinct alone. If we want to scale the solutions that can truly move the needle, we have to start with good data, not just good intentions.
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