The top 5 carbon reduction solutions for 2023
If you are looking for a new post on ChatGPT or the future of crypto, you might be disappointed. Far away from thinking that these hot trends will not once again pave the way in 2023, let’s focus on solutions that have the most potential to cut carbon emissions and which require the most investments to scale such as:
regenerative agriculture;
circularity approach;
low carbon infrastructure;
local economy;
sustainable freight.
#1 Regenerative agriculture
Among impact trends covered by the media in 2022, regenerative agriculture started being seen as a powerful approach to sustainable farming and this is probably not a coincidence.
We are now facing a complex equation: feeding a growing population - we are supposed to be 9.7 bn people by 2050 - without the natural resources necessary to do so and a deteriorated environment. This situation created a unique momentum, triggering a massive and record-breaking investment flow headed to agritech: $1.4 bn poured in 2022.
But what regenerative agriculture is concretely? Plenty of definitions exist. It is always about soil preservation but some also include in their definition all the social issues at stake for farmers.
We’ll choose a more holistic one, retained by the AXA climate, Unilever, and Tikehau fund: ‘Agriculture production systems that aim to regenerate soil health and life within the soil. But with a more holistic outlook on the impact that looks at environmental impact, social impact, and impact health’
If the public is not really familiar with this approach, some food industry leaders, among others, in the USA, Brazil, and India have planned to turn millions of acres into regenerative methods. In 2023, huge corporations such as General Mills or EIT Food Partner, Danone will invest multi-millions of dollars in regenerative suppliers. And famous brands can play a significant role and inspire others. Patagonia has therefore partnered with the Rodale Institute to launch the Regenerative Organic Certified, a brand new certification label for food, textile fiber, and personal care products.
These initiatives and investments from Corporates are answering to an emergency situation: without surprise, all the flags are in red regarding the agriculture field. According to the United Nations Global Land Outlook released in 2017, ‘a third of the planet’s lands was severely degraded through erosion, salinization, compaction, acidification, and chemical pollution, and fertile soil was being lost at the rate of 24bn tonnes a year’.
Companies that could move the needle
Soil Capital focused on creating a European carbon payment program to accelerate the regenerative transition of many more farmers. Their ambition is to support farmers to transition one million hectares to more profitable and regenerative agriculture by 2025.
GreenPods defines itself as ‘a fully integrated farm-to-fork developer, servicing the growing demand for sustainable and locally produced plant-based proteins and nuts.
#2 Circularity concept
Packaging, fashion, special equipment, the circular economy has been trendy for a while but in 2023, it should make bank. And legislation should well tip.
But let’s start defining what a circular economy is with the Ellen MacArthur Foundation approach (this one clearly inspired the latest laws like the “Agec” act in France) - ‘the circular economy is a systems solution framework that tackles global challenges like climate change, biodiversity, loss, waste, and pollution’. Ok, but what does it mean, like in real life?
The concept of circularity is relevant at all levels of the value chain, from the production phase with the reuse and recycling of materials to the distribution with second-hand and rental models. The objective is clear: finding the most virtuous models that create economic value while limiting negative externalities in a concrete way (e.g weight of transportation in recycling).
We believe that 2023 is the era of a certain maturity and thus allows us to sort out the sustainable models and those that are not.
Even if circularity is at the heart of carbon reduction issues, the focus must remain on challenging the use of the product itself. For instance, do we consider that continuing to recycle plastic is the right approach? Or is it not time to simply avoid the production of plastic bottles as the Castalie company does?
Companies that could move the needle
Lizee is a SaaS solution for retailers to afford them access to circular models (compléter)
Uzaje offers industrial cleaning and support solutions for the reuse of packaging in the commercial and collective catering sectors and the food industry.
#3 Low carbon construction
The majority of observers are clear: in 2023, buildings should rhythm with green. All the actors, from ‘proptech’ to traditional companies, are clearly invited to seize this ‘generational game-changer’ as the issue of housing includes both environmental and social issues.
If we need proof that low-carbon construction is now more than a trendy topic, the recent Inflation Reduction Act signed by the U.S. President Joe Biden in August 2022 gives some clues. In a country where the building sector is responsible for 40% of global greenhouse gas emissions, business as usual could make a change. An amount of US$ 391 billion will be used for climate solutions including building construction and the update of building energy codes.
Although European private equity firms not carbon-intensive construction-oriented are rare, their US sister already bet on new construction practices. This is the case of A/O Proptech, a venture capitalist firm. According to the management company, the proptech sector has recorded an 84% annual growth rate over the past five years ‘ with US$ 4.5 billion allocated globally, much of it landing in European cities. In particular, A/O predicts further innovation in the design of modular housing, citing the US$ 1.6 million invested in the prefab (aka modular construction) industry 2022, which was two-and-a-half-times more than the previous year’.
With the legislation evolving regarding construction practices and materials used in European countries, the construction industry can definitely snap up new markets.
Companies that could move the needle
Vestack designs and manufactures low-carbon buildings, pre-assembled off site and made of bio-sourced materials. With their solution being 3x better in terms of carbon footprint, and with 0 additional cost compared to traditional construction, they’re making low-carbon construction affordable for the many.
La Solive provides short and intensive trainings on energy renovations to bridge the lack of workforce in that sector, which is crucial to reduce the carbon footprint of the existing buildings.
#4 “Made in *your country*
At first sight, reindustrialization appears as an old whim but 2023 appears as a new trigger due to geopolitical evolutions. In our globalized world, things are not as simple as that. Connections between economies clearly make the process of reindustrialization complex.
Even the first global economy is asking to enter a New Industrial Age and return to the first workshop’s place in the world. A recent article published in Foreign Affairs goes in that direction: ‘Americans should embrace a new economic patriotism that calls for increasing domestic production, bringing jobs back from overseas, and promoting exports’.
In Brazil, Dilma Roussef said more or less the same thing: ‘We have oil, food, and minerals in all of Latin America; this can be strengthened, centralized, but it cannot be condemned to a third neoliberal wave and be a producer of raw materials, we must reindustrialize’.
For instance, the movement of ‘Made in France’ is becoming increasingly popular even if the huge majority of consumers cannot afford to spend too much. In 2023, will be easier to combine made in *your country* and purchase preference?
Companies that could move the needle
Le Slip Français is a DNVB fashion company whose confection is exclusively made in France. Created in 2011, the fashion label Le Slip Français works closely with 40 manufacturing partners. But the company has other ambitions: invent the factory of the future, made for highlighting the best French know-how. An objective that involves the relocation of the textile industry in our territories!
Sème is a brand-new French fashion company, the first able to create a jean made of French linen, from production to conception.
#5 Sustainable freight
It is now beyond doubt that the freight sector represents a large part of greenhouse gas emissions around the world. In France alone, 89% of goods are transported by road (compared to 34% in 1960). Multiple initiatives to reduce the environmental impact of freight transportation have been launched including the adoption of electric and hybrid vehicles and sharing of goods flows in urban areas with the development of cycling logistics.
2023 could represent the year of all changes for this industry! The International Sustainability Standards Board (ISSB) has declared a new regulation which necessitates private companies to reveal their Greenhouse Gas emissions publicly. This regulation, which is expected to be published in 2023, will mandate private companies to make Scope 3 disclosures (indirect emissions by suppliers or consumers throughout an organization’s value chain).
In their effort to reach carbon neutrality, this could lead to companies investing more in green freight solutions, such as electric trucks and ships, as well as using more efficient shipping routes and cycling logistics. This would not only reduce emissions but also increase efficiency and reduce costs. This will benefit all parties.
Companies that could move the needle
K-Ryole, is a French manufacturer of professional electric vehicles developing electric trailers for cyclo-logistics.
Everysens, based in France is decarbonising transport, one train at a time. It developed a collaborative tool specialized in the predictive planning of your rail and intermodal transport by integrating real-time visibility into your processes.
And you, what is your selection?