India’s green ambitions: A growing role for family offices

India will require an estimated $22.7 trillion to achieve its net-zero target by 2070. That breaks down to roughly $500 billion annually, a far cry from the $135 billion being invested in 2024, according to a February 2026 NITI Aayog report. Traditional financing models and public funding alone are unlikely to close this gap.

This creates an opportunity for family offices, which manage the wealth of ultra-high net-worth families, to position themselves as a source of patient, flexible, mission-aligned capital that could accelerate India’s shift to clean energy. This is because they can take a longer view, stay invested through uncertainty, and back projects with longer gestation periods having significant environmental impact.

Family office participation in funding scalable climate solutions has become all the more urgent in the current global context. The ongoing conflicts in the Middle East, including risks to key energy routes like the Strait of Hormuz, have driven up oil prices and added volatility to markets. In such a scenario, mobilising private, patient capital into renewable energy, storage and resilient infrastructure is not only vital for climate goals but also helps reduce exposure to geopolitical risks and strengthens long-term energy security.

The Scale of the Problem

India’s green finance flow stood at $50 billion in 2021-22, covering only 30% of the required investment to meet its Nationally Determined Contributions (NDC) goals. According to a CEEW report, to achieve 2035 targets, private finance from domestic and external sources needs to jump ninefold and sixteenfold respectively.

The startup pipeline reflects this strain. A report published by the Observer Research Foundation (ORF) in 2024 pointed out that of the over 2,600 climate tech startups that were registered in India over the past decade, only around 800 remain active. In the first half of 2025, Indian climate companies raised $1.28 billion across 65 deals, but over 60% of that went to just five companies. The seed-to-Series A gap is widening precisely where intervention is most needed.

Why Family Offices Fit the Climate Tech Profile

Traditional venture capital and private equity funds often struggle with climate-tech. Performance pressures, investor expectations and defined fund lifespans, make them wary of early-stage hardware, carbon capture, or industrial decarbonisation, areas where impact is highest but the timeline to profit is longer.

However, family offices have a different approach. Unlike institutional funds tied to short-term performance benchmarks, family offices have a structural advantage that allows them to hold positions for a decade or more, investing in high-risk climate breakthroughs such as carbon capture and storage, sustainable agriculture, alternative proteins, enhanced mobility and circular economy platforms.

Climate change is a cumulative problem: the sooner we act, the lower the eventual cost. With India’s cleantech funding surging 43% in 2024 to $2.6 billion in 2025, and success stories such as Ather Energy’s IPO, it is clear that long-term backing can generate market-rate returns. Family offices, freed from quarterly fund cycles, are uniquely positioned to capture this.

Four Levers for Meaningful Participation

Family offices looking to move beyond token-level engagement in climate can work four levers.

The first is direct early-stage investment. Plugging the seed-to-Series A gap is among the most critical interventions available. Many promising ventures fail not for lack of merit but for lack of early capital. Family offices with longer time horizons can fill this role where institutional VCs will not and help de-risk the path for much larger institutional flows.

The second is collaborative platforms and blended finance. Pooling capital with impact-aligned peers, development finance institutions, and structured impact funds enables risk-sharing and track record-building that draws subsequent capital. Blended finance instruments, where concessional or philanthropic capital de-risks commercial investment, are increasingly proving value in hard-to-abate industries.

The third is long-term investment in hard-to-abate sectors like carbon-intensive industry decarbonisation and regenerative agriculture, rather than pursuing quick exits.

Finally, ecosystem advocacy. Using their influence and networks, family offices can lobby for regulatory reforms, stronger credit support mechanisms and clearer climate taxonomy. In 2024, India released a draft climate finance taxonomy to channel resources toward green technologies and prevent greenwashing.

A Maturing Opportunity

India is fast becoming a destination for climate-tech capital emerging as the second-largest funding hub for climate-related companies in 2024, attracting $5.1 billion and surpassing China, a report by EY noted. Policy-driven decarbonisation through Sebi’s BRSR framework and India’s evolving carbon credit trading scheme are adding further momentum. The conditions that once gave family offices pause—limited impact measurement infrastructure, regulatory ambiguity, and unclear exit pathways—are gradually improving.

Indian-origin family offices bring deep sectoral networks, regulatory familiarity and the operational intelligence to navigate India's complex environment. International family offices and family-backed funds see India as a promising climate-tech frontier due to its enormous addressable markets and policy-driven decarbonisation efforts. Both groups want trusted intermediaries and structured possibilities, such as impact-aligned funds, blended-finance instruments, and credible on-ground advisors, to translate their climate objectives into actual capital deployment.

As India’s green objectives and financial deficit clash, family offices are becoming crucial enablers of the country's climate-tech shift. This role becomes even more vital in the context of ongoing instability in global energy markets. Risks to key supply routes and volatile fossil fuel prices highlight the urgency of reducing India’s dependence on external energy sources.

Investing in patient capital, collaborative frameworks and long-term conviction may make India's net-zero journey a financially viable reality, rather than just a policy goal.

(The author is Principal, Spectrum Impact and Head of Corporate Strategy, Aarti Industries. Views are personal.)