The forestry climate innovation guide
Delivering sustainable flourishing lives for
11 billion people with a full impact approach
Mission Innovation NCI/RISE together with leading forestry and biomass companies, current as well as potential users of biomass and biomaterials, and system change experts are co-developing this climate innovation guide. The aim is to support companies, policy makers, consultants, financial organisations, and other stakeholders to explore an expanded climate and innovation agenda. This agenda with the help of a four step full climate impact approach would have the capacity to deliver flourishing lives for all on a regenerative planet.
Moving from product substitution to delivering solutions for a future where 11 billion people can live flourishing lives on a regenerative planet in balance with nature
Product substitution: Sustainably produced renewable products
Step 1 assesses the company from product substitution perspective. This step compares two products and their impact in society. If the product that a company provides has lower impact than the product it substitutes the product substitution results in a lower negative impact. It can be described as a static problem approach.
For forestry companies a product substitution perspective focuses on substituting fossil-based materials and fuel with bio- based alternatives.
Very little business model innovation is needed, and the benchmarking for performance and climate leadership is assessed in relation to other traditional forestry companies. From a short-term incremental perspective such benchmarking, that many financial institutions and mainstream consultants do, makes sense. But it undermines innovation as it does not ask if the product is part of an unsustainable system and if there are other ways that people’s needs can be met.
In addition to product substitution on the supply-side forestry companies and experts with a product substitution focus tend to recognise the need for sustainable forestry. However, unfortunately in most cases there is no attention paid to any long-term global strategy for a future where 11 billion can live flourishing lives, but rather only try to be certified in a way that allow sthem to sell as much as possible of the current product. Hence, focus tends to be on certifications rather than to ensure that the total demand for forestry products is on a level compatible with biodiversity and a half-earth future.
Product substitution includes activities, such as:
- Investment in bio-refineries
- Investments in paper and pulp mills
- Investments in pellet production
- Investment in more sustainable forestry practices
System boundaries: Forest/bio-based products compared with current fossil-based products.
Who belongs in this category only: Classical Forestry Companies, classical forestry experts from large consulting firms, conservative investors with a narrow risk focus
Role of start-ups
In general, start-ups have a limited role as large and traditional forestry companies in this category tend to focus on well-established large-scale systems. Start-ups are in most cases limited to optimisation of non core-business parts of the value chain.
- Improvement in forestry management
- Investment in production capacity for bio-based products
- Reduction/zero-emission targets for scope 1-3 emissions
- GHG per m3 of forest product
- Number of bio-based products sold and what % that substituted existing fossil-based products
- Amount of forest under ownership and the carbon stored in that forest
System substitution: Smart bio-based buildings / paper
Step 2 assesses the company from a system substitution perspective. This step expands the focus from the product the company provides to the system that provides value for the end-customer/user. For forestry companies a system substitution approach requires an expanded focus where the systems using the bio-material to provide for human needs are also included, these include for example the systems using bio-material products to provide nutrition (e.g. food packaging), energy (e.g. biofuel), shelter and a comfortable temperature (e.g. wooden building).
In recent years there has been an increased interest in the moving up the value chain among forestry companies. A new generation of companies shift focus from only wood, paper, pulp and biofuel to more high value products such as smart packaging, wooden building design, new materials (e.g. carbon powder that can be used as anode material in electric cars).
These forestry companies collaborate with their customers to explore new areas where efficient system solutions based on bio-materials can substitute inefficient fossil-based system solutions. However, it is not enough to only compare a fossil-based packaging solution with a bio-based packaging solution. System relevant questions must be asked such as ”are unsustainable products being promoted by the bio-based solution?”, and “is the packaging contributing to overconsumption and bad health by supporting meat based ultra-processed food”?
Bio-system substitution include a wide range of activities, such as:
- Smart bio-based packaging
- Energy and resource efficient building solutions
- Integrated bio-material solutions with biodiversity support
LCA for the full bio-based system, compared with the fossil-based system.
Who belongs in this category (that also includes a product substitution approach)
In many forestry companies there are new divisions emerging that focus on system substitution. Often these divisions are small compared with the core forestry and not well understood by boards and mainstream investors. In this category we also find many start-ups that focus on bio-based solutions and progressive investors with a focus on climate impact rather than only reduced risk from a company/sector perspective.
Role of start-ups
In general, start-ups have a role in providing new bio-based solutions, often in the gaps left by large companies that explore new solutions, e.g. in the packaging area, but with so many new areas emerging there are significant opportunities.
- Forestry companies that move from basic bio-materials only to smart bio-based system solutions often collaborate with start-ups on the margins with niche solutions and data collection as most work is done on a large scale.
- Start-ups that provide new bio-based solutions can be of interest especially in rapidly growing areas such as electrification of the vehicle fleet.
- A significant shift is the expansion from an interest in only tech-companies, to also data driven start-ups and start-ups with new business models, and social science start-ups with understanding of behaviours affecting energy use.
- Demand side action for radical resource efficiency
- Business innovation with payment per service instead of m3/m2 bio-based material
- Collaboration with end-users to support smart modular design and resource efficiency
- Enable customers to understand modular design and multiple use of bio-materials over the lifecycle of the material
- Investment models based on extreme resource efficiency
- Zero carbon per m2 of affordable buildings provided and other services
- Half-earth compatible land-use per m2 of affordable buildings provided and other services
- GHG per m2 of affordable buildings provided and other services
- Land-use per m2 of affordable buildings provided and other services
- Number of start-ups supported that have expanded their sales due to the support of the forestry company
Delivering on Human Needs – enabling flourishing lives
Step 3 assesses the company based on how it delivers on human needs, with particular focus on the potential contributing to flourishing lives. This step shifts the focus from how the company operates to why the company operates from a purpose driven perspective. When the focus shifts from the operations of the company, covered by most of current ESG reporting and compliance approaches such as Scope 1-3 reporting, to how the company delivers on human needs three things tends to happen.
- The focus shifts towards people and nature and what they need to flourish. Companies that are purpose driven have an advantage as they already view their products and profit as tools to deliver a better society, rather than intrinsic values.
- It becomes obvious that a sector approach is often part of the problem and that a cluster approach where the company together with other stakeholders collaborate to deliver on human needs, not just to push more products out the door of the company.
- Introduction of new tools and KPIs that allow the company to assess its impact in relation to human needs and global sustainability. For sustainability this means a shift in focus from reporting and compliance (that targets laggards) to impact assessments and tools for strategy development (that support leaders).
From a forestry company perspective many exciting clusters exist as bio-based solutions are included in most cases when solutions are delivering on human needs. Still, bio-based clusters that are solution providers for 11 billion people living flourishing lives on regenerative planet are still not very common. Many forestry companies still lack a strategy for a future where bio-based solutions deliver a future where 11 billion people live flourishing lives while using a lot less natural resources to ensure biodiversity.
When such clusters exist they often exclude traditional forestry companies, perhaps because most stakeholders in the forestry sector still struggle to link their current business models and missions to human needs. Clusters that deliver on human needs in ways that are globally sustainable are extremely resource efficient and when bio-based materials are included it is often part of a modular design that is based on a strategy where the bio-based material is used in an optimal way. Using upcycling and resource efficiency makes it hard for traditional forestry companies to join as they still focus on selling the maximum amount of material to highest possible price, and often see resource efficiency measures, and especially dematerialisation, as a threat. With a new generation of purpose driven start-ups with a bio-based focus, and larger forestry companies exploring how human needs can help them innovate, this is probably about to change.
Delivering on human needs with a bio-based focus includes a wide range of activities, such as:
- Clusters that focus on key services needed to deliver on human needs (comfortable temperatures, nutritional and healthy living that includes both nutrition, physical and mental health, support from creative and caring people)
- Business model development and exploration of purpose driven missions with a focus on delivering on human needs
LCA for the full fossil free/bio-based and resource efficient bio-based systems delivering on key human needs, compared with existing fossil-based and resource intensive systems delivering on human needs.
Who belongs in this category (that also includes a system substitution approach)
Only a few large forestry companies have begun to explore a human need-based approach. In this category we find new clusters with focus on buildings/shelter, nutrition, health, etc. that include smart resource efficient bio-based solutions. Here start-ups are very much leading the work, often with system solutions that address multiple challenges such as water, energy and nutrition. The implementation is often on the city scale with active involvement from policy makers.
Role of start-ups
In this category start-ups are in the lead as many of the new ideas for how to deliver on human needs are found among start-ups, especially purpose driven start-ups. New clusters are usually needed and many of the new solutions are identified and implemented by start-ups.
- Build capacity to assess impact on human needs in clusters
- Ensure capacity building away from narrow engineering knowledge to system knowledge and business model innovation
- Ensure that revenues are not linked to the amount of bio-material sold, but the benefits people get while living within half-earth boundaries
- Collaborate with and support start-ups in relevant areas
- Enabling the maximum number of people living flourishing lives in a way that is compatible with a world where 11 billion people live flourishing lives on a regenerative planet
- GHG and land use per person with their human needs provided for
- Number of flourishing life-years contributed to
Marketing – advocacy for sustainable rules, values, and structures of tomorrow
The necessary exponential uptake of sustainable 1.5 °C innovations requires innovation on an unprecedented scale. Rapid emission reductions are needed on a global scale and innovations are required to ensure avoided emissions for future development to allow poor people to move out of poverty. Assessments indicate that the carbon emissions of the richest one percent are more than double the emissions of the poorest half of humanity.
As the data clearly indicates the global climate work must work on two parallel fronts.
First, large parts of the global population need transformative system innovations in order to urgently move out of poverty and towards flourishing lifestyles while avoiding emission increases.
Second, the affluent population currently contributing the bulk of emissions also need transformative system innovations to deliver the emission reductions needed. Only with feedback loops that help accelerate an exponential uptake of 1.5 °C compatible system solutions is it possible to deliver the extremely resource efficient solutions needed for a future capable of delivering flourishing lifestyles for an equitable future for 11 billion people.
Today, a product or service cannot be assumed to be an isolated phenomenon, as it will affect the surroundings when being used. Deploying innovations will affect different parts of society with some products, infrastructures and institutions being strengthened, while others weakened. Exactly how society will be affected by new solutions is determined by many factors.
Carbon feedback can be categorised into three interlinked strategic parts:
Assessing the products that will be promoted or discouraged by the company.
Assessing changes in infrastructure that promote or discourage 1.5 °C compatibility due to the company. This includes both the physical and digital infrastructure.
Assessing values and regulations and how changes in these will affect 1.5 °C compatibility due to the action by the company.
- Support for concepts like Half-Earth, Ecocide, flourishing lives for 11 billion people and all living beings
- Marketing that supports sustainable lives where the focus is on creativity and care for all living beings, not material consumption
- Invest in work that increases the understanding of flourishing lives where creativity is supported
- Collaborate in clusters to enable new structures that support global sustainability
- Rules, values and structures in support of 11 billion people living flourishing lives on a regenerative planet
Human need based data related to new rules, values and structures structures in support of 11 billion living flourishing lives on a regenerative planet