by Ilan Levy
“Take urgent action to combat climate change and its impacts. Climate change is a real and undeniable threat to our entire civilization. The effects are already visible and will be catastrophic unless we act now. Through education, innovation, and adherence to our climate commitments, we can make the necessary changes to protect the planet. These changes also provide huge opportunities to modernize our infrastructure which will create new jobs and promote greater prosperity across the globe.”
United Nations (UN), Global Goal #13 Climate Action
In 2015 the UN made an urgent call to action to reach the 17 Sustainable Development Global Goals (SDGs) by the end of 2030. In 2016, the Paris Climate Agreement was open for signature. The agreement aimed to have a stronger response to the danger of climate change, 98% of the countries have signed it.
Nowadays we have already spent half of the time to achieve the SDGs, and we are very far from being at the proper pace to reach the goals. To change that, the world needs some important adjustments and innovation.
In response, the Israeli innovation ecosystem, one of the most important in the world, is taking the lead in climate action, with more than 700 startups working to solve the climate crisis.
Therefore, a wave of innovation events is happening in Israel: Planetech, From research to innovation in foodtech, Climatech, Foodtech IL, Agritech, and more. The first one took place on September 21st, last month the other two and the rest are next to come before the end of the year.
At PLANETech World 2022 there were 100 Startups of which 10 to represent the Israeli climate tech ecosystem in COP27. 60 Speakers, and an amazing organization making a world class event.
Planetech approaches the climate challenge by dividing the systems we need to empower with transformative technologies in the following: Where we live, things we make, how we impact our land, what we need to revive, and the digital space.
The system of “Things we make”(materials), includes topics related to the supply chain, in my opinion, as one of the core answers to the relationship between climate action and companies.
Almost every big corporation around the world has its sustainability strategy, and most of them are aligned with the SDGs. The United States Environmental Protection Agency (EPA), claims that more than 90% of organizations' greenhouse gas (GHG) emissions originate in the supply chain when taking into account their overall climate impacts. That is emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions, named scope 3. I anticipate that means that no company is going to succeed in reducing more than 10% of their emissions without involving their suppliers in their sustainability strategy.
The efforts of most of the big corporations for reducing their GHG footprint are now for direct emissions from company-owned and controlled resources (scope 1) and indirect emissions (scope 2 - emissions are indirect emissions from the generation of purchased energy, from a utility provider) but not related to the supply chain. However, soon that is going to change. Those corporations need the alignment of their suppliers to achieve their goals. And the suppliers need to be ready for that moment. If they aren't, the risk of losing big contracts is very high.
Additionally, another important factor to consider is legislation and taxation. As an example, in the Netherlands a carbon tax has entered into force in 2021, all the emissions above the baseline will pay 30 euros per CO2 ton in 2021 and will increase each year up to a rate of 125 euros per CO2 ton in 2030.
Even if the regulations in some countries will take longer, the nations who lead the environmental legislation will push the supply chain of every product, which in most cases is global. That means, that if the final consumer of your products lives in a country with those kinds of norms, the compliance will apply to the supplier, and if the supplier is not prepared to achieve the standards, it also can mean losing your market share. No one wants their company to be in that position.
As I see it, organizations must accelerate the adoption of new technologies for their sustainability strategies and make sure they are aligned with the SDGs, legislations, and clients' strategies. Israel, famously called the Startup Nation, is a good place to find those technologies.
