The Climate Of Business #138: Can products really be 'climate positive'?

Climate Change Reality

• Global carbon emissions reached a record high in 2023, with the UN warning that climate action is now in a worse position than the previous year (The Times )
• UN says world is now on course for warming of up to 3.1 C (Bloomberg )
• 1 in 3 Tree Species Worldwide at Risk of Extinction (BGCI )
• Mount Fuji Sets Record for Latest Time in the Year Without Snow (Ecowatch )
• Invasive species spell trouble for New York‘s tap water (Inside Climate News )
• Climate change is making temperatures deadlier and food supplies less reliable (Reuters )
• Severe flooding in Spain’s Valencia region has resulted in at least 200 deaths (AP News )
• Heat-related deaths among those over 65 have increased by 167% since the 1990s due to rising temperatures (The Times )

Business Reality

• Gucci, GSK, and Holcim have adopted science-based targets to combat biodiversity loss, focusing on protecting land and reducing freshwater usage (The Wall Street Journal )

• Australian businesses are leading in integrating sustainability into their core strategies (The Australian )
• Q&A: Can ‘carbon border adjustment mechanisms’ help tackle climate change? (Carbon Brief )
• Transition to EVs Will Lead to ‘Fundamental Transformation’ of Global Auto Industry (IMF )

• Novel Food Applications in Europe: What do the updated EFSA guidelines mean for food businesses? (Vegconomist )
• Advertising companies should address climate conflicts of interest (Sustainable Views )
• Insurer offers carbon credit fraud protection (Bloomberg )
• About?more than 1,100 giant methane clouds ?escaping from oil and gas facilities (Data links: IMEO )
• The European Union’s Deforestation Regulation will require food and beverage companies to ensure their products have not contributed to deforestation since 2020 by December 30, 2024 (Reuters )

• Nuclear energy stocks hit record highs on surging demand from AI (Financial Times )
• Global GDP severely hit by climate (Bloomberg )

Reality Check?

The concept of climate-positive products goes beyond traditional sustainability. Climate positive refers to activities that go beyond achieving net-zero carbon emissions to create an environmental benefit by removing additional carbon dioxide from the atmosphere. As climate change impacts intensify, companies are increasingly drawn to this model, hoping to meet consumer expectations while contributing positively to the planet. Accordingly, this week's newsletter will dive deep into whether these climate positive products can truly capture consumer interest.?

What do climate positive products actually look like?

Climate positive products are distinguished by actively drawing down carbon from the atmosphere. This is typically achieved through a combination of materials, manufacturing processes, and even post-consumer practices that either directly absorb carbon or offset emissions significantly beyond what is generated. Unlike products that merely neutralise their footprint, climate-positive products contribute to a net reduction in atmospheric carbon, which is quantified using rigorous life cycle assessments (LCA) as outlined by standards like the GHG Protocol’s Product Standard .

In recent years, brands across various sectors have embraced this approach, using LCA to evaluate product emissions from raw materials to disposal. For instance, the food industry has seen companies implementing regenerative agricultural practices, which restore soil health, increase biodiversity, and sequester carbon, thereby converting farms into carbon sinks. In the consumer goods sector, companies are innovating with materials such as bio-based plastics and carbon-storing construction materials, which absorb more CO? over their lifetime than they emit during production and disposal.

Read Plan A’s guide to learn what the difference is between carbon-neutral, net-zero and climate positive?

Consumer willingness to pay a premium for climate positive products

However, creating climate-positive products is often more expensive, as it involves higher material and operational costs alongside extensive carbon offset investments. The central question, then, is whether consumers are willing to absorb these costs. Research shows that while a majority of consumers express strong support for sustainable products, only a subset are prepared to pay a premium. Brands that clearly communicate the tangible benefits of climate-positive initiatives tend to resonate better with consumers. For instance, younger demographics, particularly Millennials and Gen Z, show a higher propensity to support brands they perceive as authentically committed to environmental causes.

Challenges and the future of climate-positive products

Despite consumer interest, companies face notable hurdles in making climate-positive products a mainstream choice. Beyond cost, these challenges include the complexities of tracking emissions across a product’s lifecycle and managing the environmental trade-offs that may arise. For example, climate-positive initiatives in agriculture may increase land or water usage, highlighting the need for companies to balance carbon goals with other environmental considerations.

Moving forward, several strategies can improve the viability and appeal of climate-positive products:

1. Consumer education: Educating consumers on the long-term environmental and societal benefits of climate-positive products is crucial. Brands that invest in transparent communication, detailing how each aspect of the product’s life cycle contributes to carbon reduction, are more likely to gain consumer trust and loyalty.
2. Policy implementation: Governments and institutions can play a role by incentivising climate-positive production through subsidies, tax benefits, and support for research into carbon-removing technologies. For example, policies that support regenerative agriculture and bio-based materials can make it easier for brands to implement climate-positive practices affordably.
3. Standardisation and certification: Standardising definitions and certifications for climate-positive products, aligned with global frameworks like the GHG Protocol, can clarify market claims and enable consumers to make informed choices. With consistent certification, consumers can be assured by the environmental impact of the products they purchase.
4. Corporate investment in innovation: Leading companies are investing in innovations that reduce costs while enhancing carbon absorption capabilities. As climate-positive products scale up, economies of scale will likely make these products more accessible to a broader consumer base.

As the market for climate-positive products expands, companies that build strong consumer connections around their carbon-positive goals may enjoy a first-mover advantage. Success in this arena will require a commitment not only to rigorous carbon removal but also to transparency and a customer-centric approach. Brands that can effectively integrate sustainability into their products and communicate their environmental benefits will be able to engage consumers in their sustainability journey and are poised to capture the growing demand for climate-positive products.

Ultimately, the future of climate-positive products is promising but hinges on the willingness of consumers to support premium-priced products that contribute positively to the environment. As companies design products that go beyond carbon neutrality, widespread adoption depends on clear communication, regulatory support, and technological advances that reduce costs. With these elements in place, climate-positive products have the potential to move from niche markets to mainstream acceptance, supporting broader efforts to combat climate change and reach climate goals.?

Schedule a call with Plan A. Our experts are ready to discuss how your company can effectively integrate sustainability into the core of your business.?

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