Understand the full climate impact on society from the company with a focus on the products the company provides and what is needed in society

Most companies still only use tools and assessments that focus on their own emissions (scope 1-3) and do not assess the actual climate emissions in society. Only if the whole society was static, and the future would be the same as today with no new companies and no new solutions, would such an approach make sense beyond a risk perspective. The major change with a full climate impact assessment is that the focus now is on the impact in society, not the company itself, from different perspectives. With a full climate impact assessment, including an understanding of the impact on human needs and dynamic feedback mechanisms, it is possible to assess the full impact of the company in society.

Initially a full impact approach can be daunting in a compliance driven culture, where external reporting and risk management, rather than actual impact in society has been the focus for a long time. However, even a rough assessment of the different impact areas often helps companies identify areas that are orders of magnitude more important than their current compliance drive work. In addition, many companies realise that the current risk/reduction climate agenda is only one part of a full impact strategy that involves many more parts of the company. A focus on the core business and the possibility to link increased sales to increased positive climate impact provides the opportunity to engage not only new parts of the company, but also opens up for new interactions with other stakeholders, far beyond reporting consultants and offsetting organisations.

Assessment focus (Steps 1, 2, 3, 4)

An initial overview of the potential positive impacts in society requires all the four assessment steps, as such an overview will provide insights into new areas that most companies do not include in their current innovation and climate strategies. To view the need for globally sustainable solutions in society as an innovation driver, a focus on human needs and the inclusion of dynamic feedback mechanisms are still new areas of inquiry for most organisations, so surprises are almost guaranteed. An initial overview also allows many different parts of the company to engage and a new generation of innovation to flourish. Based on such an overview, different ways forward can be discussed.

Identify ways to increase positive impacts in society through clusters

‍By shifting the focus from the internal emissions to the impact in society, the assessment allows for identification of potential collaborations that would increase the positive impact in society. An understanding of the clusters required to actually deliver on human needs is also established. By identifying the systems and clusters the solutions belong to when it delivered on human needs, it is also possible to explore new business areas, and new clusters of partners, that can move into new areas where positive impacts can be delivered.

A cluster including all the stakeholders relevant to deliver a solution, ranging from those with different technologies, legal advice, marketing and financing, to those on the demand side that are able to purchase and use the solution.

‍Assessment focus (Step 2)

‍The second assessment step helps the company to identify the clusters that are needed to deliver solutions in society. Rather than only comparing with other companies in the same sector, such an assessment provides insights into existing and possible new collaborations for increased positive impact in society. The second assessment step also helps to identify totally new ways to deliver on needs in society in ways that are beyond the current capacity of the company.

Demonstrate links between increased sales, profit, and positive impacts in society

‍With much climate action focused on reducing costs, avoiding regulatory and reputational risks, the need for winners in a low-carbon economy is an opportunity driven approach, based on the assumption that new solutions are needed in society. Most companies have never done an assessment of how they can contribute to a future where 11 billion people can live flourishing lives, and especially not from an opportunity for growth perspective.

For any company, and especially start-ups, the possibility to engage with investors from a cluster and human needs perspective is also valuable. Likewise, many investors also benefit from an expanded climate and innovation agenda. Investors with a risk/ESG approach to climate can explore an approach where companies are solution providers. Investors with an innovation perspective can move beyond improvement in existing systems, or transformative solutions that undermine human needs, and explore how they can assess if the innovations they invest in make the world a better or worse place.

Assessment focus (Steps 2-3)

The second and third assessment steps allow the company to understand how it affects society from the perspective of human needs, rather than just providing a better version of a product that might be part of unsustainable systems. Currently a climate leader can use scope 1-3 reporting and deliver low-carbon solutions to coal power plants that are providing energy to construct new oil platforms, or solar panels to schools and hospitals, without the current assessments indicating any difference between these.

Move from a static/incremental approach to a dynamic/transformative approach

Almost all tools and assessments today were created and designed for a world with slow and incremental changes. For most of the industrial revolution it was enough to assume that the next year would bring only gradual changes and just assume 2-5% annual changes. Today, the need for exponential uptake of sustainable solutions and a fourth industrial revolution brings disruption in many areas. The changes are not just technology driven, but business models, regulations, customer values as well as shocks to systems from pandemics, wars, ecosystem collapses, cyber warfare and social media are also accelerating disruptions in many ways. The paradox is that in our current world the safest short-term strategy is to stick to business as usual, while business as usual is also a guarantee of failure in the long term. So, with single-year budgets and initiatives, a business as usual strategy is the safest bet, but it is also the strategy that undermines the kind of innovation required for a sustainable future where 11 billion can live flourishing lives. Even a rough overview of different feedback systems and how the company contributes to those can help identify new impact opportunities and avoid static lock-in strategies.

Assessment focus (Step 4)

The fourth assessment step allows the company to understand its role in the fourth industrial revolution. By assessing the impact from the company’s products, its contribution to different infrastructures and institutions from a feedback perceptive, the company can identify ways to support accelerated uptake of sustainable solutions as well as find collaboration opportunities with likeminded stakeholders.

Delivering on human needs in a sustainable way

The full impact assessment can support the development of purpose driven strategies in two ways:

First, to provide data and strategic options to those that are already purpose driven companies. It provides hard data regarding impacts on human needs in society, impacts that can be used to communicate with investors, suppliers and companies and different enablers that are not used to working with companies with goals beyond only the economic.

Second, to help those that are interested in becoming a purpose driven company. Many start-ups are very interested in exploring a purpose driven agenda even if they initially focus only on a specific technology without much consideration for the sustainability impact. This is particularly true for companies that realise that they have solutions in areas where society needs exponential growth.

‍Assessment focus (Step 3)

‍The third assessment step focuses on human needs and allows companies to understand how they can deliver on human needs in sustainable ways. To be able to quantify and assess the ways the company supports human needs can be a transformative event in itself, as most companies have intuitive ideas about their contributions to society that often turn out to be very wrong when actual data is collected.

An opportunity driven innovation strategy for increased revenues and sustainability

In our society technological innovation is often the only innovation that is acknowledged. However, for many purpose driven companies the technological innovation is one part of a broader set of innovations needed to deliver globally sustainable solutions. A full impact assessment allows companies to expand from only technical innovation to also include areas like business model-, communication-, recruitment/HR-, and advocacy-innovation in their strategies. For many innovation driven companies the link to human needs also help guide investments and priorities in unexpected ways. Most companies still develop their strategies without actually knowing their impact in society, which is bizarre in a situation where there has never been more data available, and more need to direct our innovation towards sustainable solutions.

Assessment focus (Steps 2, 3, 4)

With a focus on the third assessment step, that focuses on how human needs are met and lifestyles are changed due to the company, it is possible to explore what is needed to accelerate the positive impacts, and avoid the negative impacts. How markets can change with communication innovation, and how business model innovation can deliver what is needed in clusters that must be built, are examples of areas where companies can explore an expanded innovation agenda. The second assessment step can help map the needs of different clusters, that can range from financial innovation to the need to attract new skills. The fourth assessment step can help companies to identify ways that they can support feedback mechanisms that support accelerated uptake of globally sustainable solutions which deliver on human needs.

Delivering what is needed, not what most see as possible

Most companies assume growth strategies based on old business models and theories. Investors and enablers such as business model and digital consultants tend in a similar way to assume gradual growth rather than exponential. For many companies this still make sense, but those with the solutions society needs should think beyond that. With an assessment that shows how different solutions from the company are making the world a better place by delivering on human needs in a sustainable way, the company can identify exponential growth strategies in support of current climate and sustainable targets.

‍Assessment focus (Steps 3–4):

By combining the insights from the human needs based assessment in step 3 with the feedback assessment in step 4, the company can identify different exponential pathways for growth that deliver positive impact in society.

A significant challenge in the area of assessments of climate impacts is the urge to identify rapid, and easy to assess, avoided emissions. These drivers often result in “high carbon lock-in”, i.e. a situation where fast and inexpensive emission reductions are achieved by investing in optimisation of fundamentally unsustainable systems. As many companies still approach climate change as a compliance, reporting risk area, it is especially important that they develop strategies that include assessment of their offerings from a human needs perspective.

For companies using the full climate impact assessment to develop a strategy for growth this is easier if investors, the board and SMT, understand the benefit of a strategy that is sustainable over the coming decades, rather than one that maximises short-term gains while locking the company into an unsustainable strategy where revenues are reduced over time. A serious assessment will show that the emission reductions achieved are part of the problem instead of the solution.

‍Assessment focus (Steps 3–4)

With a focus on human needs and an 11 billion filter, together with assessment of the feedback systems the company contribute to, a future secure strategy can be developed.

Dancing with the devil towards a sustainable future for all

Many start-ups need to scale before they can find clusters that are delivering sustainable solutions, so they find themselves in a situation where they need to find markets to help them grow and scale, even if these customers are not the most sustainable. In most areas, from energy and mobility to garments and nutrition, many of the dominating companies are unsustainable and many actively undermine sustainability, so scaling without being part of the problem is almost impossible.

By exploring exponential growth paths from a globally sustainable perspective with the full impact assessment, a springboard strategy for global sustainability can be developed. These springboard strategies focus on maximising the positive impact through a rapid scaling strategy that often includes initial collaboration and sales to unsustainable customers. A springboard strategy for global sustainability often requires sophisticated investors that focus on the impact in society rather than the often simple metrics used today to assess investments.

Assessment focus (Steps 2–3):

By using assessment step 2 and 3 it is possible for companies, in collaboration with the right investors and enablers, to map out a springboard strategy for global sustainability.

Identify and build relevant clusters for growth and impact

The first step to build tomorrows stakeholder relations, beyond existing bilateral and value chain relations, is to understand what current, and potential future, clusters that the company can belong to in order to deliver on human needs in a sustainable way. Assessment steps 2 and 3 provide a great combination to assess the clusters the company is involved in today (2) in delivering on human needs, and tomorrow (3).

‍Assessment focus (Step 2–3)

Identify, invest in, and grow intangible assets

‍Assessment steps 2 and 3 allow for many different dialogues. One relation that is often problematic today is the one between companies and investors.

The second and third steps in the assessment allow progressive companies to show traditional investors the value of a purpose driven strategy, but also for purpose driven investors to support traditional companies to move in a purpose driven direction. Instead of a simple bilateral discussion the company/investor discussions can be expanded to clusters based on delivering on human needs and possible synergies in different investor portfolios.

The second step can also provide insights into possible clusters of tomorrow with a focus on human needs, something that can help companies build strategic partnerships, and investors can build impact driven portfolios. Currently most investors are sector focused and do not assess impact in society. Hence, before a full climate impact assessments becomes truly relevant for the investor they often need to develop a strategy were the core business is linked to positive impact in society.

However, even if a specific investor is not focused on positive impacts in society, or not even interested in climate change, a full climate impact assessment, from a purpose driven company, can help to explain the economic potential to an investor that is used to only assessing based on classic sector criteria, where the product in isolation is the only factor they know how to assess.

Assessment focus (2, 3)

Support in filling in the gaps with the right network

Enablers such as management consultants, legal firms, PR agencies, etc. can use assessment steps 2 and 3 to better understand how to support purpose driven companies, or companies that might benefit from becoming purpose driven.

The full climate impact assessment was developed together with, and especially for, enabling companies providing solutions as they are needed for transformative system change. While most enablers have been start-ups the full climate impact assessment can also be used by established enabling companies, such as management consultants, legal firms, PR agencies and event organisers, to assess their impact.

As enabling companies often help shape rules, regulations, business models and values in society, the fourth step is of particular importance.

‍Assessment focus (Steps 2, 3, 4)

Finding the right markets for the right company

‍With leading strategic customers, including large companies and regions/cities, also exploring an expanded climate innovation agenda, the potential for mutual benefits are significant. But the majority of customers are still either not paying much attention to climate change, or just looking for reduction in existing systems. Step 2 and 3 assessments can identify those that are caught in high-carbon inefficient systems and low innovation agendas.

Assessment focus (Steps 2–3)

Building the company of tomorrow with the right staff

‍The potential to identify both the clusters today and the potential clusters of tomorrow allow the company to identify the skills that are relevant. By being engaged in new exciting clusters and being able to demonstrate current and future positive impact, the company also becomes a magnet for leading talent.

Assessment focus (Steps 2, 3, 4)