The conversation about tackling climate change has traditionally revolved around burdens and sacrifices. But what if we turned it into a conversation of solutions and opportunities?
That was the perspective an Exponential Race to the Top session at Climate Week NYC took, hosted by Exponential Roadmap Initiative (ERI) at the We Don’t Have Time Climate Hub.
The importance of scaling up climate solutions
Evidence shows that as climate solutions scale, such as renewable energy and electric vehicles, they naturally reduce and eventually surpass the market share of fossil fuel products and services. This demonstrates that concentrating on the ‘do’s’ can effectively help phase out the ‘don’ts’. ERI founder and CEO Johan Falk, pointed out that certain solutions have already reached this tipping point but that this transition must accelerate across more domains to achieve a green economy. Falk:
Solutions follow a so-called exponential trajectory S-curve. They are perceived as progressing slowly in the beginning before reaching a particular tipping point, which could be around 10-15%. At this point, they enter self-sustaining feedback loops. This is a natural process, after which they take off and ultimately phase out the old solutions.
We have essentially passed these tipping points in two areas. The first is renewable energy, which is now the cheapest form of energy compared to fossil fuels and other alternatives, and it is scaling very rapidly. The second is electric vehicles. However, we do encounter bumps in the curve due to slow permitting processes and obstructive policies, which unfortunately hinder growth.
There are also a number of solutions that are still in early stages, such as near-zero steel, regenerative agriculture, and sustainable forestry. While these may appear to be progressing slowly, it is absolutely essential to accelerate these solutions in order to phase out the fossil-dominant alternatives.
The proportion of climate solutions compared to fossil products and services across various industries.
Key actions:
Falk identified three key actions needed to reach these tipping points sooner:
Accelerate the value chain transformation
Companies should expedite their transition away from fossil fuels by scaling climate solutions. This entails optimising sourcing, production, and logistics to significantly reduce carbon footprints.
Implement enabling policies
Policymakers need to create a supportive framework that facilitates the rapid scaling of emerging solutions. This includes ensuring fair pricing between fossil fuels and climate alternatives while eliminating distortions created by fossil fuel subsidies.
Shift the competitive narrative
The focus should shift from burden-sharing to fostering competition for leadership in the emerging green economy. This change in narrative will encourage countries to adopt a more competitive posture in the global clean economy.
Practical examples from our member companies
These actions are already being implemented by leading companies such as IKEA, Unilever, and Stegra, who also participated in the session. Sriram Rajagopal, Head of Climate and Air Pollution at Inter IKEA Group, shared how a comprehensive analysis of IKEA’s emissions and the challenges of reducing carbon emissions across various segments of their value chain have enabled them to establish compensatory targets. These targets focus on significant reductions in areas like manufacturing, allowing for a slower transition in more challenging segments such as materials. Overall, this approach supports their mission of halving total emissions while ensuring realistic implementation.
Maria Persson Gulda, Chief Technology Officer at Stegra, represents a pioneering climate solutions company focused on producing green steel—an essential product for reducing value chain emissions in the vehicle industry. Companies like Stegra experience firsthand how proactive policies are crucial for scaling these solutions. Persson Gulda highlighted mechanisms such as the Carbon Border Adjustment Mechanism (CBAM) in the European Union (EU), which has already generated significant industry interest in green steel. She emphasised the need for these mechanisms to expand globally to further accelerate the transition to a sustainable economy.
The private sector’s influence on governmental actions
From an alternative perspective, the panel also discussed the positive influence the private sector could exert on governments and nations, emphasising the vital role corporations play in showcasing how value chain transformation is possible and presents many opportunities. Fiona Duggan, Global Sustainability Senior Manager at Unilever highlighted the broader impact—and responsibility— of corporations. When asked how corporations can contribute to the development of Nationally Determined Contributions (NDCs), she shared:
I’ll give you some examples. So, number one, Unilever has written a report with [former UNFCCC Executive Secretary] Patricia Espinosa showing what a good and effective NDC looks like. Number two, we are demonstrating where our actions will align with an NDC through the outcomes of our actions and investments. Number three, we’re talking to our trade associations and industry bodies. We want to make sure that the policies we are talking about are also the policies they are talking about. They need to be 1.5°C aligned. And, you know, governments welcome that dialogue between businesses, corporations, and governments, and we are there to say we support that.
Rajagopal further elaborated on the responsibilities and impact of the private sector:
Transition plans act as an excellent demand signal to governments that we have skin in the game. This will enable a virtuous cycle, with the private sector stepping in and clearly demonstrating intent. Hopefully, that will give governments the confidence to make their NDCs more ambitious—not only ambitious but also translating into proper policies and legislation, which will lead to implementation and investment from governments over the next five years. This will set the virtuous cycle in motion, with companies contributing to national targets.
To illustrate the intersection of business and government efforts, he cited IKEA’s goal of using only renewable and recycled materials by 2030 to cut material emissions, which currently account for nearly half of their total emissions. However, achieving this goal requires substantial amounts of recycled materials, which depend on a robust circular infrastructure supported and enabled by government initiatives.
Watch the session (40 minutes):
