PIKE ORIGIN

Welcome to Origin Report #4

This report covers:

• Earth Appreciation Photo of the Month
• Article: Challenges to Climate Solutions
• Climate Tool Box

Earth Appreciation Photo of the Month

Beautiful hike with views of Half dome in the distance. – Yosemite National Park

Challenges to Climate Solutions

If there is such a demand for climate solutions then why are they not being implemented all over?

There are four major challenges* (and seemingly infinite minor challenges) to implementing climate solutions:

1. Leadership and coordination
2. Business challenges
3. Determining the best solutions
4. Time

Leadership and Coordination

Effective climate action requires committed leaders prioritizing sustainability and pursuing climate solutions and opportunities. However, since the impacts of climate change are unevenly distributed which historically has led to varying investments across countries, sectors, regions, and businesses.

In business, leaders can champion sustainability within their organizations by promoting environmental stewardship and programmatic changes that promote sustainable operations. Additionally, leaders can use their networks to advocate for industry-wide changes at conferences, trade shows, and other public events.

To establish sustainability initiatives within your organization, it’s best to voluntarily adopt sustainable practices and establish communication networks for internal information sharing. This can promote a sustainable culture and help further relationships around a common goal. Companies can also align their operations with global, statewide, and local sustainability goals and support partnerships and initiatives focused on climate solutions. By becoming proactive contributors to the sustainability agenda, businesses can influence policy frameworks, infrastructure development.

Business Challenges

The upfront costs associated with climate solutions, coupled with concerns about short-term economic impacts, can deter both nations and businesses from taking bold action. To overcome this, innovative economic models are needed, which means getting creative on revenue streams and capital management. For example, strategic public and private partnerships that create compensation for public goods, such as cleaner air, soil, or water, through mechanisms like carbon pricing or payments for ecosystem services, can incentivize sustainable practices and provide economic benefits to communities. Alternatively, businesses themselves can look to their banking and financial partners to restructure debt or refinance in alignment to meeting various ESG metrics.

From a business standpoint, integrating environmental and social benefits into economic models is not only a moral imperative but also a strategic move. Companies can explore business models that incorporate sustainability as a core value, leading to long-term cost savings and improved brand reputation.

Determining Best Solutions

OK – Now let’s assume you have strong leadership buy-in and have a strategy to overcome various business challenges (Wahoo!). The next challenge is determining what solutions will produce the best results. In other words, it is hard to choose whether it is better to pursue electrification and renewable energy, or is it zero-waste and a circular economy, or is it partnerships and capital allocations? The truth is that it’s likely a combination of many solutions, implemented in a series over time.

There are two effective ways to overcome this challenge, first is teaming and second is research and development.

Teaming is essential to understanding the business needs of various units and identifying what will work in their operations and prioritization of solutions. It could be helpful to use your network of environmental stewards leaders to build coalitions, define metrics, and ultimately deliver results. Further, collaboration with research institutions and consultancies can provide insights, solutions, and strategies that align with your unique needs.

Research and development is needed since implementation of climate solutions requires a creative and unique approach for each application, research and development can result in multiple areas for returns on investment. For example, sustainable practices such as circular economies and sustainable supply chains offer tangible pathways for resources to be reused, minimize waste, which further optimize supply chains, and can simultaneously reduce costs and environmental impacts.

Time

The final biggest challenge facing climate solutions is time. Most climate solutions can take months or years to receive their value so sustainable cash flow and management of finance is incredibly important. A business that survives must be able to execute on the highs and maintain resilience through the lows. One way to accomplish this is through sustainability-linked or Environmental, Social, Governance (ESG) loans which can help save on interest costs (I’m working on a future Origin Journal that will take a deep dive into this topic).  

Another consideration here relates business decision-making and strategy. Sustainability objectives require long-term planning opposed to short-term cost and benefit. Transitioning reactive business operations and culture of climate focused decision-making will be an ongoing challenge. Here it is paramount to integrate sustainability into decision making structures and link results to quality data and metrics.

*Note: These challenges are not mutually exclusive or collectively exhaustive, but are essential to broadly understand the climate transition.

The Climate Toolbox

• Shared language: Definition of Sustainability
• Guidance: The White House in 2021 issued the Roadmap to Build an Economy Resilient to Climate Change Impacts. This roadmap lays out strategies that the US government is pursuing to protect against the real life risks of climate change, which from a business perspective could be useful to align growth strategies and investments with the US government’s plan.
• Tool: The Exponential Roadmap Initiative is a leading community of innovators that are seeking to half carbon emissions by 2030. They have an abundance of resources, news, and events.

Cheers,

Chris