Why Decarbonization Isn’t Enough

Why Decarbonization Isn’t Enough


Decarbonization is one of the most popular terms du jour in sustainability right now. We’re seeing it everywhere. The SEC's proposed climate disclosure rule will require large businesses to report greenhouse gas emissions. Many businesses have already pledged to reach net-zero emissions in coming years. A new wave of cleantech startups has emerged to help enterprises reduce carbon footprints and achieve their sustainability goals, as 2024 is shaping up to be a big year for VC investment in the space. We’re seeing a broad set of decarbonization methods being implemented, from new carbon capture technology, electrification, and renewable energy to tactics like carbon credits and carbon offsets. And behind the momentum, it’s consumers leading the charge — demanding more transparency and accountability when it comes to corporations’ carbon footprints. 

 

But while reducing carbon emissions is crucial — it’s not a silver bullet. And the myopic emphasis on decarbonization is leading to what’s known as carbon tunnel vision, which is when we overlook other critical sustainability measures, such as biodiversity, water conservation, and resource scarcity.

Widening the aperture

At Third Nature Investments, we apply a wider aperture in assessing the myriad ways we can work to protect the planet. We’re particularly inspired and informed by two works: Johan Rockström’s Planetary Boundaries and Kate Raworth's Doughnut Economics.

In 2009, Johan Rockström and a group of scientists developed the nine planetary boundaries, which outline a set of parameters within which humanity can continue to develop for generations. The boundaries represent “interrelated processes within the complex biophysical Earth system,” according to the Stockholm Resilience Centre. They are as follows: 1) Climate change, 2) Change in biosphere integrity (biodiversity loss and species extinction), 3) Stratospheric ozone depletion, 4) Ocean acidification, 5) Biogeochemical flows (phosphorus and nitrogen cycles), 6) Land-system change (for example deforestation), 7) Freshwater use, 8) Atmospheric aerosol loading (microscopic particles in the atmosphere that affect climate and living organisms), and 9) Introduction of novel entities. As of 2015, we had transgressed four boundaries, and as of last year, we've transgressed six of the boundaries, showing just how dynamic and rapidly changing this is. Every boundary crossed  increases our risk of irreversible environmental change. 

Doughnut economics combines the concept of the planetary boundaries with a set of social boundaries, as the framework is designed to illustrate the importance of balancing the needs of people without overshooting earth’s ecological ceiling.

Both of these foundational works reflect the fact that carbon is but one piece of the puzzle. There’s a broader set of interconnected, related systems that all contribute to the health of our planet. Over the past century, humanity has accelerated its effect on this broad set of planetary systems, and we’re seeing the negative impacts all around us — everything from the Great Barrier Reef suffering historic bleaching to global ocean temperatures hitting record highs for a full year to our freshwater cycle reaching a breaking point to the biodiversity in the Galapagos being under intense threat.

Global growth and resource demand has widely depleted finite natural resources at a rate that’s not sustainable and is essentially stealing from our future. Getting to net zero carbon by 2050 (as scientists recommend in order to limit global warming to 1.5°C) is an ambitious goal, but it doesn’t go far enough. There are no silver bullets. We need to go beyond decarbonization and look hard at the effects that business has on oceans, terrestrial health, biodiversity, climate stability, and more. We must detoxify all Earth’s natural systems. 

We have the opportunity to build new business models that allow highly scalable solutions to a vast number of environmental and human health challenges across every earth system. By transforming human behavior and activities — how we design, produce, distribute, and consume — we can restore, repair, and regenerate critical earth systems that humanity relies on.

How businesses can go beyond decarbonization

Around the corner, it will be expected that brands reduce and even eliminate the vast majority of their entire ecological footprint while also delivering products that are traceable, transparent, regenerative, and support an inclusive economy.

Examples of what companies can do to move beyond decarbonization to reduce their overall ecological footprint include:

  • Displace negatively impactful core ingredients or processes currently used.
  • Use low or zero input materials and ingredients, departing from ubiquitous but quite troublesome foundational materials or ingredients of the 20th century that are energy intensive, soil damaging, water polluting, and causing extensive deforestation, etc.
  • Implement more efficient, distributed, and local production and processes.
  • Become more vertically conscious, in order to reduce interruptions and build in resiliency from less transactional and more strategic relationships up- and downstream.

We take pride in investing in remarkable companies within our portfolio that embody this mindset. For instance, Keel Labs and Sway are both leveraging the highly regenerative crop of seaweed as a base material in their core products, thereby sequestering carbon, counteracting ocean acidification, and enhancing biodiversity. Through connecting food surplus to those in need, Copia not only tackles food waste and reduces emissions, but it enhances resource efficiency and improves environmental and human health in even broader ways. 

Addressing climate change demands more than just a reduction in carbon emissions; it requires a profound shift from mere pledges to tangible, transformative actions. Similar to the groundswell of support for decarbonization, we are witnessing the beginnings of momentum and action towards even more ambitious initiatives that promise to significantly enhance the health of our planet. Entrepreneurs are spearheading innovative business models that are reshaping the very essence of what constitutes a business and redefining its societal and environmental impact. What these pioneering innovators are implementing today will soon become the standard.