“This climate solutions framework is one of the “unlocks” we need at this moment in order to scale climate solutions and displace high carbon emission products and services with these climate solutions.” -Lucy Shea, CEO, Futerra
Hosted by Lucy Shea, CEO of Futerra, this Solutions House session from Climate Week NYC, set the stage for transformative discussions on climate action. Shea, a veteran in sustainability, emphasised that a climate solutions framework is the “unlock” needed to escalate climate action and transition away from high-carbon products and services.
Joined by Johan Falk, CEO and co-founder of Exponential Roadmap Initiative and a panel of sustainability leaders from organisations: Oatly, Stegra and Oxford Net Zero, this panel discussion explored practical ways to leverage solutions that reduce emissions drastically, paving the way for a sustainable, fossil-free economy.
A framework for identifying climate solutions and climate solution companies
The Climate Solutions Framework, developed by the Exponential Roadmap Initiative and Oxford Net Zero aims to drive the rapid shift from high- to low-emission activities by establishing clear criteria for what qualifies as a climate solution or climate solutions company. Developed to meet the urgent need for decarbonisation, the framework provides science-based guidelines that financial institutions can use to identify and direct investments toward low- or zero-emission products and services. Johan Falk:
To be able to qualify as a climate solution, you need to have a significant lower carbon footprint through the life cycle, compared to the market average solutions. We put the threshold as more than 50%, preferably 80% or 90% to be able to to define such a solution, as a climate solution. In addition, it needs to follow strict guardrails and companies also need to have net zero targets, intermediate targets and other basic principles in place. It’s important to keep it firm, but also with the idea of simplicity. The basic principle is that you have to stay under this particular curve. So, if you introduce a solution let’s say with 60% less carbon footprint over the complete life cycle, you still need to have reduction targets to stay under the curve, continuously.
Recognising that existing corporate sustainability pledges and reports lack specificity, the framework fills this gap by defining criteria that are both straightforward and scalable. The ultimate goal is to help accelerate climate transformation across sectors while preventing greenwashing.
Strengthening credibility and committing to sustainability
Caroline Reid, Sustainability Director at Oatly, shared the company’s recent certification as a climate solution’s company, which not only strengthens Oatly’s credibility, but also aligns with their commitment to scaling their products rapidly to help achieve net zero emissions. Caroline Reid:
We believe that our product, our oat milk, is a mechanism of change, changing the food system for the better. But having now been assessed by the Exponential Roadmap Initiative against this criteria, and having that stamp of approval that our products, our oat milk, are climate solutions in the category of milk, it really brings us this good credibility. So, what it actually means is, depending on the market, and where we are selling our oat milk, our oat milk is between, 51% to 73% less impactful than the market. The milk market. So, it’s not compared to cow’s milk, it’s comparing ourselves to cow’s milk and other plant based alternatives in the market today.
Lina Håkansdotter, Chief Sustainability and Corporate Affairs Officer at Stegra, formally H2 Green Steel, are constructing the world’s first green steel mill and looking for ways to provide investors with tangible evidence of their commitment to sustainability. Lina Håkansdotter:
We are starting the first green steel mill in the world, we’re actually building it right now, up in the northern part of Sweden. This mill will produce 2.5 million tonnes of green steel, which has 95% lower emissions compared to the traditional steelmaking route. So that’s a lot less emissions. Of course, it’s really important for us to be able to advocate this and also get the investments needed to be able to build this factory. Our investors, they have raised concerns. They say, why don’t you have targets? Well, we have a 95% lower emissions. That’s a target. But this stamp, being a climate solution company, registered with the Exponential Roadmap Initiative, it’s clear evidence for investors that we are contributing in a substantial way.
As both companies strive for substantial environmental impact, they also recognise the critical role of credible frameworks in securing investments and fostering consumer interest in their innovative solutions.
The need for definitions
Kaya Axelsson, Research Fellow and Head of Policy and Partnerships at Oxford Net Zero argues that defining climate solutions is crucial for fostering identity, aligning finance and enabling a just transition to net zero. Kaya Axelsson:
There is some evidence that shows when you name something, you can actually create an identity. There are examples of times when a census names a group of people and then a previously, not known identity was created as a result of that in the population. What we’re trying to do is create the identity of a climate solutions provider so that companies can live that, as part of their wholesale business model strategy.
Piera Patrizio, Head of Research at the Science Based Targets initiative (SBTi), emphasises the importance of climate solution definitions in the context of financial institutions. Piera Patrizio:
The fact that SBTi is now in the consultation draft of the Financial Institutions Net Zero (FINZ) standard, now will ask financial institutions to green their portfolio by investing in climate solutions, it’s very powerful and so I think the framework is going to be very important. I’m really looking forward to see how this will evolve over time, because I think it’s going to be crucial also to take into account the ecosystems where all of these different climate solutions operate.
Defining climate solutions also plays an essential role in achieving equity in climate finance, particularly for the Global South. Zainab Bie, Regional Campaign Manager for Asia-Pacific at Equal Right, highlights the challenges of mobilising climate finance in developing regions, where inequalities intersect with environmental vulnerabilities. Zainab Bie:
A lot of our work goes into mobilising climate finance for the global South. Now the issue arises, even though the money is coming with a lot of difficulty, even if we mobilise it, how do we make sure that we are funding the right project? And here the [definition of] climate solutions come into play. The more you define something, the better you will be able to solve it.
Developing a comprehensive climate solutions framework will require ongoing dialogue and adaptation, as standards will need to evolve alongside technological advancements and policy innovations.
Watch the session (44 minutes):
