The journey from the polar sea ice to climate finance and Climate Compensation 2.0.
Our mission is to facilitate impactful climate action, and our ambition is to give businesses the means for climbing the path of a green transformation. At ClimatePoint, we work purposefully to connect solution providers with companies in need, identifying leading investment environments for sustainability and climate while having a scientific footing.
In a nutshell, we at ClimatePoint offer the next generation climate compensation scheme. Or as we like to call it: Climate Compensation 2.0
The climate is changing, and it is changing fast. Last year was the warmest year on record, while 2021 is projected to be even warmer. The trend is clear: temperatures are rising, and already now the world is around ~1°C warmer than in pre-industrial times. It does not need much to transgress the 1.5°C target agreed on in the Paris Agreement, ratified by 195 countries.
Climate change, however, does not entail only gradual warming; there is a multitude of other consequences: longer and more frequent heatwaves, rainier winters, sea level rise, biodiversity loss… the list goes on. Co-author of this blogpost, CCO at ClimatePoint, Tobias Thorleifsson has himself witnessed the accelerated rate of change during his number of expeditions in the Canadian Arctic. However, it is no longer necessary to travel to the Arctic to illustrate the impacts of warming. Today, we can see the effects of climate change in our very own backyard.
If nature’s intrinsic value is not enough of a reason for us to step up our game, the physical and transitional risks to our economy associated with the climate crisis and ecological breakdown certainly are. That is, the greater climate change impacts and our understanding of them get, the more likely become litigation, carbon taxes, and supply chain disruptions. Companies failing to adapt to the green shift and mitigate for their impacts will increasingly face high costs – especially given the increased public interest.
Urgent action is required but hindered by slow processes and inefficient mechanisms. Businesses need to focus on both rapidly decarbonizing and meaningfully compensating unavoidable emissions. While current financial incentives try to better this situation, not all efforts have effect. What’s more, large fractions of the economy are entirely left out & behind of necessary transformations. This applies particularly to small and medium-sized enterprises, which make up more than 90% of businesses, and which cannot take part in emission trading schemes such as the EU’s cap and trade system. In addition, both the latter and offsetting initiatives certainly do have their raison d'être, but the effects of offset purchases of any sort are uncertain, and they may delay necessary investments into the green shift.
We argue that these conventional approaches are not enough. That this is not driving change. That this does not lead to the transformation of our economy that we need so urgently to avert horrendous impacts from climate change. Time is of the essence, as Mark Carney, the UN special envoy for climate action and finance, has pointed out: “investment must be accelerated at a warlike pace, to fight what John Kerry has termed ‘World War Zero.’”
While some organisations have understood their role in this crisis and the corresponding efforts to mitigate and adapt, not all of those who want can act. In addition, we also need to have those on board who have thus far not been willing to follow along. We believe that a new form of financial incentives is needed. And we believe that we provide part of the solution.
Are you ready to join the ride?