Is there a Business Case for Climate Transition?

Author: Markus Palzer-Khomenko

Investors and companies increasingly recognize the opportunities sustainability presents.

When it comes to the impact of the climate crisis, we are all in the same boat. Thus, it is only logical to place the solution concept for the most pressing crisis of our time, the climate transition, at the center of the Impact Days and our work at Climate Lab. But it is also important to highlight the numerous opportunities it presents.

Green 100 at the Impact Days

For the first time, the The Green 100 0, an event by the The Climate & Clean Energy Equity Fund aimed at connecting green projects with investors, was part of the Impact Days. The opening session, featuring Climate Lab Director Gebhard Ottacher and Tina Deutsch , co-initiator of the newly founded Institute for Climate Issues "KONTEXT," highlighted the significant impact the climate transition will have on our economic system. They calculated the costs of stabilizing the climate, noting that achieving climate neutrality by 2040 would require annual investments of 2.4 - 4.2% of GDP, translating to up to 16 billion euros annually.

Climate Transition - Investment with Return

If these numbers seem overwhelming, a change in perspective is recommended. The choice we face is surprisingly simple. Inaction will lead to exponentially higher costs, not only financially but also in terms of health consequences and lost lives. While the costs of the climate crisis manifest as damages and destruction, investments in the climate transition represent investments in new, modern, and better infrastructure. Investing 4% in our infrastructure will also likely result in at least a 4% growth in GDP. These figures indicate that the climate transition will become a crucial driver of jobs and economic growth in the country. The numerous investors seeking good investment opportunities at the Impact Days have already understood this.

Circularity as a Strategy

Leading Austrian companies are rethinking their strategies. "We engage in circular economy because it is a business model," stated Christian Lampl of Holcim ?sterreich (formerly Lafarge) during the Climate Lab reception at the Partner Days. The event, conducted in collaboration with CEOs FOR FUTURE , demonstrated that sustainability is increasingly becoming a part of the corporate mindset. This shift is driven not only by a sense of corporate responsibility but also by economic considerations. Due to the numerous incentives and regulations from the European Green Deal, public pressure, and growing consumer awareness, existing business models must be re-evaluated. To secure future contracts, companies must have a solid ecological balance sheet. The new dynamics in the business world reveal the significant opportunities that a circular economy offers, including greater independence, reduced resource consumption, and waste that can be traded as secondary raw materials.

Reimagining Supply Chains

Improving, rather than merely reducing, the ecological footprint of supply chains was another topic deserving its own session at the Impact Days. Transparency in supply chains is a significant challenge, where technological advancements can help. Several startups presented their approaches during the Impact Days.

Valuable information about supply chains can already be extracted from the internet, particularly from media reports. For example, a textile factory in Bangladesh collapsed a few years ago, burying over 1000 workers. There had been protests by the workforce against the unsafe building, which were reported in local media. Such reports could be analyzed using artificial intelligence to identify risks in supply chains and take appropriate actions. High-tech solutions can also aid in carbon footprint assessment. According to one startup, satellite data can provide near real-time insights into carbon emissions.

Business Case - Green Agriculture

Land use, a topic with significant impact on our economy and prosperity, was also a focal point at the Impact Days. In Austria, debates over high land consumption have persisted for years. The discussions revealed that green or sustainable agriculture is increasingly becoming a business model for practical reasons. Healthy soils have greater resilience to droughts and heavy rains. Given the increasing weather extremes due to the climate crisis, this fact is attracting the attention of investors. Investments in sustainable agriculture are also a win-win for biodiversity. Depending on how agriculture is practiced, it can either destroy or preserve ecosystems, as one panelist succinctly stated.

"Biodiversity as a Service"

The debate also focused on the sense and nonsense of "biodiversity offsetting" and the term "nature positive." The primary goals are to avoid, minimize, and restore ecosystem damage. Preserving ecosystems must finally be recognized as the public service it is. This applies not only to "natives" who advocate for the protection of rainforests and other ecosystems globally but also to local farmers who consciously practice agriculture in harmony with nature, even at the cost of lower revenues and higher efforts. The REWE Group , a new partner of the Climate Lab, was also represented on the panel. Dietrich-Huebner Tanja stated that their initiative "Blühendes ?sterreich" is just beginning in terms of being "nature positive." We look forward to the results and applications of this initiative!

The Climate Transition is the Impact Investment of Our Time

The returns benefit us not only financially but also socially and ecologically - for generations to come.