Dear reader,

Welcome to 006 of our newsletter, Demand Change. We are sharing how we, our customers and the economy as a whole is working towards full decarbonization. We'll be covering subjects within carbon accounting, climate policy, climate tech innovation and sustainable finance.

tl;dr

From 1/365 to 365/365

Climate leaders are winning

Joni Mitchell

From 1/365 to 365/365

Friday the 22nd was officially Earth Day. The history of the day reaches back to 1970, marking the beginning of modern environmental movements. Companies and brands don't miss out on the opportunity to greenwash tailor their core message around how much they care about the environment. So the awesome folks behind the Net Zero Tracker initiative started a campaign where they expose the hypocrisy of the companies tweeting about Earth Day by checking the quality of their Net Zero commitments. So many naked emperors.

Even only a few years ago, the classic trope would have gone something like this: "luckily the tide seems to be slowly turning and companies can't really ignore their stance on climate anymore. If Earth Day remains 1 day out of 365 we are ngmi, but if the majority of companies put climate on their agenda, we have a chance".

But the thing is, pursuing ambitious net zero plans, turning climate risk into opportunity and putting climate at the core strategy and operations is good business. As this recently released report from McKinsey concludes:

"Understandably, many CEOs worry that their company will get ahead of its customers, investing in new assets and incurring production-cost increases before those customers demand low-emissions offerings or are willing to pay green premiums. In that event, the company could put itself at a disadvantage to rivals that sit back and wait.

However, initial experience suggests that in many sectors, companies that are among the first to pursue net-zero opportunities enjoy greater success. First movers stand to gain the most in B2B industries in which demand for low-emissions offerings already exceeds supply, in part because incumbents with wide asset bases and thin margins have been reluctant to invest in new production capacity."

This resonates with our experience: our customers almost without exception can be characterised as climate leaders.

And the turning tide is expected by none other but Blackrock, the largest asset management firm in the World, that expects 75% of its assets to be net zero aligned by 2030. Let's make sure that this is a conservative estimate!

It's important to recognize that the duality we experience is not a dichotomy: many feel anxiety over climate change, while there has never been this much optimism, hope and action. We humans have a tendency to only act when we see the cost of inaction, but we also have an incredible capacity to cooperate and come up with ingenious solutions in the face of existential threat. Closing with the oh-so pertinent words of Joni Mitchell:

They paved paradise and put up a parking lot With a pink hotel, a boutique, and a swinging hot spot Don't it always seem to go That you don't know what you got 'til it's gone They paved paradise and put up a parking lot

As always: stay tuned, stay safe, demand change!

- Adam & The Variable Team