Hitting The Wall

Companies Hitting The Wall on emissions reduction need to get more inventive, here's how to do it.?

In running, "hitting the wall" is the moment when the body runs out of easy -to- process carbohydrates and stops functioning properly. Typical symptoms are extreme fatigue, disorientation and weakness.

For companies on their journey to net zero, there’s a dawning realisation that they’re running out of ‘easy to remove’ emissions and their plans are stalling. They’re hitting the wall. Symptoms include pessimism, frustration and the search for a fresh perspective.

Hitting The Wall

A huge amount of effort is going into emissions reduction. The Science Based Targets initiative reported a 29% reduction in scope 1 and 2 emissions between 2015 and 2020.

But despite all that hard work, collectively we’re not making the dent on emissions we need to hold, let alone reverse, climate breakdown.

But you know all this already…

In a business setting, what that looks like is a positive downward trend in emissions from a company’s own operations and somewhat across the value chain and yet, still, the descent isn’t steep enough to hit a net zero target in 2050, let alone 2040.

That’s The Wall.

Mind The Gap

Let me help you visualise what that looks like with an example.

The bar chart below is a format often used to show how a company (or in this case the city of Philadelphia) plans to carve up their emissions reduction over time.

What goes in the individual bars is important, sometimes it is a target for reduction rather than a practical solution. Sometimes it is a bit of a guess about what might be achievable when newer reduction mechanisms appear. Often it’s not costed properly.

Despite all those well-intentioned Net Zero pledges, only 7% of companies are on track to achieve their net zero targets for scope 1 and 2 emissions given their current rates of change, according to a 2022 Accenture report.

“Life is what happens when you're busy making other plans” - John Lennon

“Even in a scenario where companies accelerate emissions reduction to twice the current rates in the years to 2030 and then three times after that – 59% would still fail by 2050.”

Why is this happening?

It’s happening for a bunch of reasons and each firm faces a different combination. Here are some to consider:

1. Low-hanging fruit: Companies have already picked the low-hanging fruit of carbon reduction (change the lightbulbs for LEDs anyone?) and these approaches are leading to diminishing returns over time. You can keep pushing but in many cases it costs you more and more to remove increasingly small slices of emissions.
2. Growth: If you factor in a company’s growth plans, then the emissions numbers can start going the wrong way. If you’re forecasting 5% growth from products with a high carbon-intensity you’re going to have to work even harder to mitigate them. PS. That’s why at EdenLab we are so focused on developing a green clean share of market to allow businesses to have a life after carbon.
3. The death of offsetting: We’re realising that being so-called Carbon Neutral just doesn’t cut it; too few good quality carbon removal schemes, too much price-gouging, not enough absolute reduction in emissions. The biggest carbon credits certifier is on the ropes.
4. Not making tough calls. The toughest decisions in the transition to a low carbon economy are yet to be taken; companies aren’t prepared to absorb the real costs required, governments aren’t drafting the laws, citizens aren’t accepting the inconveniences. Those calls still need to be made and they’re only going to get louder and louder.
5. It’s actually really hard to decarbonise if your hands are tied by too many (seemingly) immovable constraints. Some of those are just going to have to give.

What does all this mean?

What we’re going to see in the next one to three years is a growing realisation that current approaches aren’t enough.

These reality checks this will lead to a series of corporate crises and people casting around for increasingly radical solutions.

Expect to see more of those ‘Willingness to Pay’ studies as firms explore how to share the burden of high transition costs with their customers (hint: We’re all going to have to pay one way or another).

Businesses will still be looking for technological silver-bullets to help steepen their downward trajectories but we’ll also begin to see an acceptance that social innovation will be as important as tech innovation to drive real change.

For example, we’ll see firms offering employees extra free holiday if they travel by train, we’ll see a boom in consumer electronics repair shops, we’ll see increasingly shrill calls for carbon taxation, we’ll see more new models of shared ownership, increasingly fashionable frugalism and so on...

As a recent Consumer Packaged Goods CMO said to me “I think what we need is a fresh perspective”.

“I think what we need is a fresh perspective.”

What we’re already seeing - and this is where EdenLab excels - are calls for a fresh perspective. Newer, more lateral, more inspired, more creative ways to solve the problem.

The real reason firms are hitting the wall on emissions

The real reason is that companies are trying to solve the problem without letting go of the limiting assumptions, habits and rules that got us into this mess in the first place.

If you’re sitting at the dashboard of an existing business model and pressing increasingly hard on the same old button, chances are you’re not seeing much by way of response.

What’s needed is a more fundamental rethink of how you do business, how you make money, how much money you need to make and really what it is you are in business to do.

Let me break it down for you. Really what we’re talking about is the absolute, vital need to be more inventive.

Be more inventive

It’s going to mean questioning and prodding the old business model a lot harder. And designing new ones that aren’t just good for profit but are also good for people and nature too.

Here are some examples to show you what I mean:

• Can you reduce the carbon required to make and distribute a much-loved product e.g. sourdough bread, by decentralising the production into the hands of the customer? What if you could create the most frictionless home-made fresh sourdough experience - and if you can do it for bread what other foodstuffs could be produced this way? Hints: Try Compaction and Decentralisation.
• Do people want washing powder (feedstock: Petroleum) or do they want clean clothes, or even just to feel confident? Could you shift away from chemicals entirely towards something more natural as in this example from Probiotic Craft? Hint: Try Substitution.
• Can you create a successful drinks business replacing high energy- intensity stills with new fermentation techniques to produce the alcohol? Could you use waste food products from other sectors to invent new kinds of drinks flavours? Check out the work of Empirical. Hint: Try new tech meets ancestral techniques.

• Can you give people the status hit of being fashionable without selling them any actual clothes? Epic Games’ Fortnite collaborations lets you look the part without actually manufacturing any clothing. Hint: Try Dematerialisation.

• Can you capture carbon in seaweed and then either sink it to the seabed or harvest it and turn it into biofuel? Seaweed can capture up to 20x more carbon than terrestrial trees. This is what EdenLab friends Samudra Ocean are doing, using robots and AI to scale seaweed farming. Hint: Try Automation.

Of course there are lots more important areas to focus on than the ones above, e.g. rethinking how we make concrete , where we get our energy from, how we power large vehicles and so on but the principles remains the same: Rethink the rules, get inventive.

Build the New Model

I came across this quotation recently from Buckminster Fuller, architect, visionary, systems thinker and proto-environmentalist way back in the 1960’s.

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

That the reason we called EdenLab a ‘Lab’, because we knew the only way to make change happen was to smart small and punchy, get some wins on the board and then work from there.

We find its easier to work with an empowered, progressive and passionate team who can make a small but important dent in the world. In the language of a recent HBR piece we like to "start with a small local majority."

Our first goal is to get an experiment or pilot project away. Once we've got some hard evidence of demand for net zero initiatives and innovations, we can take the rest of the business with us.

"Focusing on a keystone change allows you to get out of the business of selling an idea and into the business of selling a success."

What to do now

At EdenLab we’re laser-focused on unlocking Green and Inclusive revenue streams decoupled from carbon emissions that put nature, people and profit on equal terms.

It easy to engage with us, and our successful introductory workshops have been in real demand. If you work in a business and want to find out more, drop me a line: [email protected]

We’re also looking for analytical and stats / computation-friendly interns to join us this Summer to help with a new software product we’re developing. If that’s you, write us an email: [email protected]

Our mission is to remove or prevent 5m tonnes of CO2e entering the atmosphere by the end of 2027. If you are on a similar mission, let’s talk.

Thanks for reading!

Leo