According to Hubertus Meinecke, the Managing Director for BCG’s climate practice, 800 of the Fortune 2000 have established net-zero targets. While this represents a substantial increase in global companies prioritizing climate action in the past decade, commitments to net-zero targets are not the same as achieving net zero. Not only that, the pace of adoption of low to zero carbon solutions is just not fast enough and targets for 2050 or even 2040 may be too late, even if they were to be achieved. The science and anecdotal evidence are indisputable: the climate crisis can no longer be avoided because we are already in it!

Companies need to increase their ambition with respect to climate change, not only speeding up their timelines but even consider going beyond net zero towards regeneration. While sustainability is about keeping the status quo (clearly too late for that), and net zero is about becoming a net climate-neutral actor, climate science now suggests we need to go even further, towards a regenerative approach whereby companies contribute to the removal of emissions from our economy and help regenerate ecological systems that have been destroyed or damaged by human and corporate activity over the past century.

Digital technologies, and the financial and regulatory support for their adoption, are required for us to accelerate towards a regenerative economy fast enough to improve the likelihood of extending human prosperity for our kids.

I have developed an initial framework for considering the underlying conditions, and the digital tools required, to get us on the right track.

1. Make it legal for companies to capture and report transparent data not just on their financial metrics but also on the socio-ecological impacts of their own activities and that of their supply chains.

While the economic incentives for climate innovation in a range of industries from transportation to energy, buildings, and agriculture are substantial, it is now clear that we need government intervention to force corporations and their governance models to formalize the journey to net zero and beyond. Step 1 on this journey is to remove voluntary and arbitrary sustainability reporting methods and replace them with regulated reporting standards.

Why is this important? While it is true that consumers increasingly care about sustainability, it is not reasonable for them to have to filter out greenwashing from legitimate claims of sustainability by producers. Meanwhile, it is too easy for companies today to self-report what makes them look good and sweep under the rug what doesn’t.

Last year the European Union approved a new legislation that all member countries need to enforce: the EU Corporate Sustainable Reporting Directive (CSRD). The CSRD standardizes sustainability reporting for listed companies in Europe. The CSRD also applies to foreign companies who have subsidiaries in European member countries. The CSRD is one of the first legal standards of its kind to be approved and applicable to multiple countries, across industries, and should be a force for change not only in the EU but also for other countries and regions around the world.

• Find ways to embed externalities into the prices of goods and services produced by global conglomerates and local companies.

The true cost to society and the planet for the life cycle cost of producing and disposing of things we consume must be reflected in the actual costs we pay for them. This is the only way that we can accelerate the production and consumption of more sustainable (or better yet, regenerative) products and services. The CSRD can be a good first step towards this process because only when standard guidelines are applied to the capture of impact data can we then move to credible pricing schemes whereby the real cost of products can be measured and then policy can be applied to ensure those costs are reflected in the actual costs through tools that put a price on ecosystem services (e.g., carbon, energy, land use, biodiversity, clean air, etc).

• Hire and empower an entrepreneurial Chief Sustainability, or Regeneration, Officer to become agents of change

The Chief Sustainability Officer (CSO) role has been around for a while now, but too often CSOs are not empowered with sufficient resources or governance to have enough impact on the corporations they work for. I believe that if Steps 1 and 2 above are deployed, companies, and their boards, will be forced to empower CSOs to become “agents of change.” The closer we get to tying corporate governance and reporting requirements and pricing of goods and services to climate goals, the more influence and ability CSOs will to not just experiment on the edges and be responsible for voluntary reporting, but rather to help drive profitable approaches to climate innovation. As this happens, I predict we will see more Chief Regeneration Officers for companies who are really committed to turn climate leadership into a blue ocean strategy to dominate their industries.

• Help accelerate funding into climate solutions and fast!

Governments, industry, private equity, and even retail investors need to up their game on shifting funding into the climate arena. While estimates vary, one recent study found that we currently have a $16 trillion funding gap for sustainable infrastructure.

• Experiment with new technologies like AI to accelerate your net-zero, or regenerative, journey.

Numerous initiatives have emerged in the past few years leveraging AI to help accelerate the low carbon economy. AI organizations and tools for climate include NGOs dedicated to educating climate innovators on how AI can help them accelerate impact like Climate Change AI, climate baseline tools for corporates like CO2 AI, the use of AI for predictive and prevention of deforestation and similarly, and the use of AI tools to facilitate climate resilience. We are only just beginning to understand the ways AI and machine learning can help us innovate our way towards regeneration.

• Embrace Regenerative Finance (ReFi) tools on the blockchain

ReFi has emerged as an exciting vertical from the blockchain ecosystem. Many still think blockchain is either extremely problematic for climate change or that it is a tool only for fraudulent actors.

Leveraging crypto rails to accelerate climate action is a highly promising, yet under-explored area for corporations, governments, and climate activities. Here are some key questions to ask ourselves about ReFi’s potential to accelerate climate action.

How can we layer-in ReFi elements on Web 2 and legacy systems to help accelerate adoption and impact?

For example, take PowerLedger layered crypto rails on the P2P renewable energy trading space. Klima DAO and dozens of others have layered crypto rails on the digital measurement, reporting, and verification (DMRV) space bringing in more transparency. My company, Iomob, is now working to combine two products into one to achieve this layering effect too: layer 1 in our case is a global mobility network (scooters, bikes, parking, EV charging, trains) currently built as a Web 2 platform, and layer 2 is WheelCoin, a gamification and tokenization tool to accelerate the adoption of greener mobility choices.

It is worth noting that there are obvious ways that ReFi tools could be brought to use in bringing even more transparency not just to carbon markets, but to the entire space of DMRV by companies and governments, including those forthcoming from companies reporting via the CSRD requirements.

How can ReFi help accelerate the pricing of externalities?

In order for externalities to be factored into the price of goods and services, some kind of economic value needs to be assigned to ecosystem services. While economists have spent decades trying to come up with models that estimate the value of ecosystems services (the most widely cited study from 1997 estimated the value of unpriced ecosystem services to our global economy to be between $16 and $54 trillion USD per year!), we have failed to actually put an economic value on natural systems in ways that impact the actual price of goods and services.

I am quite excited about this role for ReFi. Protocols are emerging that seek to tokenize ecosystem services. Celo, a carbon negative, mobile first, EVM layer 1, has been a launch pad for several protocols aiming to tokenize and put a price on natural resources and for encouraging regenerative agricultural practices (e.g. EthicHub). The Climate Collective was founded with the ambition of tokenizing rainforests and carbon sequestering assets. The Climate Collective is a leading force in ReFi for exploring ways to cross the divide from crypto to legacy and Web 2 ecosystems and we need more of this.

What other ways can ReFi actors accelerate change faster, perhaps outside of the current capitalist and nation state system?

I am intrigued with the ambition of the team at ReFi DAO. Aside from their directory of ReFi projects, their most ambitious endeavour to date is to create a decentralized network of local regenerative communities empowered by interconnected by locally governed regions. Importantly, John Ellison, co-founder of ReFi DAO, confirmed that roughly 80% of individuals engaged in their first local nodes come from outside crypto altogether.

Conclusion

The climate crisis is here. Humanity has failed future generations by getting caught up in the linear tendencies of capitalism to focus on short-term profitability at the cost of long-term prosperity. While it may be too late to avoid the climate crisis, there is still time to accelerate change to a new paradigm that leads us from exploitation to regeneration. But we will not get there by working in well-intentioned silos. We need to work together with industry, government, and regulators, with indigenous communities, impact founders, and sources of capital, and collaborate more, even within competitive industries, if we want any hope of averting the worst of the impending climate disaster.

About the Author

Boyd Cohen is CEO and co-founder of Iomob, which is building the Internet of Mobility network and WheelCoin Move2Earn to gamify green mobility, and is a contributor on ReFi to CoinDesk. Since obtaining his PhD in strategy and entrepreneurship at the University of Colorado in 2001, he has spent the past two decades focused on accelerating the path to a low-carbon sustainable economy. He has published three books, multiple peer-reviewed articles, and started a handful of ventures in the smart cities and sustainability arena.