Climate solutions
As part of the Faith Impact Project we identified several pressing global challenges most relevant to the five major religion’s values. We subsequently chose to explore Climate as a first theme to explore in more depth.
After the most recent IPCC report, August 2021. “It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred.”
As we are investment specialists and not climate experts we chose to collaborate with reliable, third-party sources in order to identify which solutions are most effective for fighting climate change. We ultimately engaged with Project Drawdown and built our research efforts on their Drawdown Solutions Framework.
Project Drawdown offers its knowledge in various formats: the book publication Drawdown Solutions Framework (2017) - containing two pages on the Pope’s Laudata Si’ (On Care for our common home), an online platform (www.drawdown.org) podcasts, events and lectures.
We summarized the extensive work conducted in Drawdown Solutions Framework into a concise report. In addition, you will find a short overview of the solutions spread over 9 sectors. FIIND Impact Foundation’s team has also researched which of these solutions are investable. Our research aims to help institutional investors navigate the universe of effective, investable solutions to climate change.
Drawdown is the future point in time when levels of greenhouse gases in the atmosphere stop climbing and start to steadily decline. This is the point when we begin the process of stopping further climate change and averting potentially catastrophic warming. It is a critical turning point for life on Earth. The Drawdown Solutions Framework identifies 3 main categories to reach Drawdown for climate solutions:
Reduce resources
Support Sinks and
Improve Society.
Within these 3 categories there are 9 sectors:
Effective solutions
Electricity production
Electricity is an essential aspect of modern life, used in range of appliances and hardware that have become stapled into our industrialized society. Abandoning electricity as a source of energy is thus completely out of the question, despite electricity production accounting for about 25% of global GHG emissions. What are the most effective solutions to make Electricity Production more sustainable and carbon-neutral?
Wind turbines (onshore)
Solar energy consisting off: Utility scale solar photovoltaics (solar farms); distributed solar photovoltaics (rooftop solar) and concentrated solar power.
LED lighting
Read more about the most effective solutions in Energy in the full Effective solutions document available if you fill out the form below.
Food, agriculture & land use
Agriculture and forestry activities contribute to a significant share of global greenhouse gas emissions. The modernization and expansion of agriculture over the past century has transformed a significant part of our planet, considering that half of all habitable land is used for agriculture (Elllis et al. 2010). Animal agriculture such as meat and dairy production, along with crop practices like rice growth, are major contributors of GHG emissions. The main culprit in this sector is not carbon dioxide, but methane, which poses a much greater short-term threat due to its significant capacity to trap heat. “Today, agriculture and forestry activities generate 24% of the greenhouse gas emissions worldwide”. How can we reduce the pressures on ecosystems and land, while meeting the growing demands for food and fiber worldwide? The top 6 according to the Drawdown Solutions Framework:
Reduced food waste
Plant-rich diet
Peatland protection and rewetting
Regenerative agriculture
Conservation agriculture
Indigenous peoples’ forest tenure
Read more about the most effective solutions in Food, Agriculture and Land use in the full Effective solutions document available if you fill out the form below.
Industry
The industrial sector is responsible for about
21% of the global warming we are currently experiencing. This sector produces essential items to our economy such as clothing, cars, computers, and tobacco, along with iron, steel, cement, and chemicals. The production of plastics, textiles, paper, aluminum, fertilizers, and waste further contribute to the emissions which originate from this sector. Evidently, various solutions must be examined in order to reduce GHG emissions from industry and manufacturing.
What are the most effective solutions to reduce harmful (GHG) emissions from industry and manufacturing?
Refrigerant management & alternative refrigerants. Addressing refrigerants is especially important because of the use of very potent HFCs (12.000x more potent than carbon dioxide)
Alternative refrigerants
Alternative cement
Recycling
Read more about the most effective solutions in Industry in the full Effective solutions document available if you fill out the form below.
Transportation
Mobility is a crucial element to economic growth, and the demand for it is only increasing. The majority of GHG emissions from this sector relate to passenger cars and trucks, whilst the remaining quarter is split between aviation and maritime transport. With petroleum as the main source of energy for transportation vehicles, GHG emissions from this sector contribute for about 14% of global GHG emissions.
The most effective solutions in the transportation sector are:
Electric cars
Hybrid cars
Carpooling
Public transport
Efficient aviation
Read more about the most effective solutions in Transportation in the full Effective solutions document available if you fill out the form below.
Buildings
Buildings are major drivers of GHG emissions, either directly or indirectly. Many more emissions are the result of ongoing use. Fuels are burned on site, primarily to heat space or water or for cooking (In The Drawdown Solutions Framework , clean cookstoves, the most effective solutions in this sector are defined as “solar-powered or fuel-burning household stoves that reduce greenhouse gas emissions by either increasing thermal efficiency, reducing specific emissions, or increasing ventilation.”). The chemicals used for cooling and refrigeration can escape as emissions. Through these direct, on-site sources buildings produce 6% of heat-trapping emissions worldwide. Buildings also use more than half of all electricity, creating an off-site, upstream impact on electricity- generation emissions.
The most effective solutions in the Buildings sector are:
Improved clean cook stoves.
Insulation
High-performance lass
Smart thermostats
Building automation systems
District heating
Read more about the most effective solutions in Buildings in the full Effective solutions document available if you fill out the form below.
Health and education
Enabling individuals to achieve higher levels of education is one of the most powerful tools that can be used to mitigate GHG emissions. “One child, one teacher, one book and one pen, can change the world” said Malala Yousafzai, Nobel laureate and girls’ education activist. For starters, educated girls realize higher wages
and greater upward mobility, contributing to economic growth. Their rates of maternal mortality drop, directly reducing mortality rates of their babies. They are also far less likely to marry as children or be wed against their will. They have lower incidence of HIV/AIDS and malaria – a phenomenon known as “the social vaccine “effect. Their agricultural plots are more productive and their families better nourished. They are more empowered at home, at work, and in society.
The solution in this sector focuses on increasing access to voluntary reproductive healthcare, family planning resources and 12 - 13 years of schooling.
Read more about the most effective solutions in Health and education in the full Effective solutions document available if you fill out the form below.
Land sinks
Land is a powerful carbon sink, as it returns atmospheric carbon into living vegetation
and soils. Whilst the majority of heat-trapping emissions remain in the atmosphere; land sinks currently return 26% of human-caused emissions to earth.
There is significant overlap in the solutions that stop land-based sources of greenhouse emissions and those that support land-based carbon sinks, making these particular solutions incredibly valuable.
Address food waste and diet
Shift agriculture practices
Use degraded land
Read more about the most effective solutions in Land sinks in the full Effective solutions document available if you fill out the form below.
Coastal & ocean sinks
Oceans cover 71% of the Earth’s surface, enabling a variety of natural processes to remove carbon dioxide from the atmosphere. This occurs through photosynthesis and the building of calcium carbonite shells, when carbon dioxide dissolves in seawater. Oceans have absorbed at least 90% of the excess heat generated through recent climate changes and have taken up 20-30% of human- created carbon dioxide out of the atmosphere since the 1980s. Coastal and ocean sinks bring 17% of all heat-trapping emissions back to Earth.
Solutions for coastal and ocean sinks centre around ecosystem protection, restoration and improved agriculture practices.
Read more about the most effective solutions in Coastal and ocean-based sinks in the full Effective solutions document available if you fill out the form below.
How to invest in climate
A growing number of investors understands the risks and challenges climate change poses to their portfolios. Indeed, many have started to incorporate a climate lens in their portfolio, engaging with their investees to promote better environmental practices, and even divesting from companies that represent the highest polluters or emitters. Many investors also see climate change as an opportunity, to both earn returns by investing in companies and technologies that will benefit from a transition to a more sustainable economy, and to create positive change with their capital. Our research aims to help institutional investors navigate the universe of effective, investable solutions to climate change.
Our findings
As an investor who is just starting to look into climate investing, it can be difficult to navigate the various investable solutions. Hence, we would recommend that you request via the form below the full investable solutions document. The full research document summarizes various sectors through which institutional investors can contribute towards fighting climate change. In particular, these sectors have been taken from the Drawdown Solutions Framework, and include various solutions in: (1) electricity production, (2) food, agriculture, and land use, (3) industry, (4) transportation, (5) buildings, (6) land sinks, (7) coastal and ocean sinks, (8) engineered sinks and (9) health and education.
These were subsequently assessed for investability in terms of the following criteria:
Is there a viable, profitable business model?
Tested investment opportunities
Adequate expertise and track record
Scalability, or the ability to invest on a large scale, in line with the needs of large investors (fund size > USD 100 million in assets under management)
Expected returns in line with those available in the respective asset class
The findings show that, generally, effective and investable climate solutions can be found in all asset classes including:
Liquid investment (public equity and public debt)
Illiquid investments (private equity, venture capital, private debt, infrastructure (debt and equity) and real assets (farmland and forestry)
While investability varies across sectors and solutions, it is possible for institutional investors to build climate-aligned portfolios. In fact, some of the nine sectorsdiscussed throughout this document (e.g. electricity production and food and agriculture) not only provide the most effective climate solutions in terms of GHG reduction, but also a sufficient supply of institutional-quality investment opportunities. Furthermore, some under-funded sectors (e.g. buildings) present an opportunity for investors to grow the market of effective, investable solutions.
The magnitude of the transition and the financial resources needed for this is clearly tremendous and requires investors to play their part. If Drawdown Scenario 1 is to be achieved, investors globally will need to shift their approach beyond exclusion of fossil fuels and ESG integration, into actively seeking solutions that help to solve or mitigate climate change and the effects thereof.
If you would like to receive the full investable solutions document, please fill out the form below.
Solutions request form
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