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Image caption: The Intergovernmental Panel on Climate Change predicts that the 1.5-degree limit could be reached between 2030 and 2035. That makes concrete measures and tools such as the right° model even more important. This start-up and its founder have received several prizes, including the German Sustainability Award Foundation’s Next Economy Award. Photo: right°/Farideh Diehl
Photo: right°/Farideh Diehl
Ms Helmke, you studied psychology and international business. How did you come to develop a model that calculates how far a company is contributing to global warming?
During my studies, I had the opportunity to watch award-winning documentaries. One of the films was about peak oil and the fact that we are generating too many emissions. It simply made no sense to me that we are destroying the basis of our existence on our planet. Then I came across the carbon bubble, an analysis that stated that approximately 70 percent of all the fuels priced in by the market must not be burned if we are to keep global warming below 2 degrees. I asked myself, ‘How can I make it clear that companies are dependent on emissions that cannot be generated if we are to keep the global temperature increase below 2 degrees?’
One figure that everyone understands is the °C number of a company. Our main focus was not environmental protection. Our objective was to scrutinise a system that does not work. That was what attracted me.
In the course of my work, I realised that decision-makers in the German economy are genuinely looking for ways to simply do what is right. That is also what drove Sebastian (editor’s note: Sebastian Müller, co-founder of right°) and me – the idea that you can stand by what you are doing, and that also applies to the climate.
Around 130 companies now make use of your model, and you are frequently invited to take part in discussions on various stages. Did you always believe in what you were doing? Were there ever moments where you doubted whether right° would be successful?
(laughs) As an entrepreneur, you have doubts every day, as you constantly have to question what you are doing: what can you do better, why are things not working out as well as you imagined? You can only answer these questions if you face the doubts and learn to embrace them. I never had doubts about the objective of right° or the model. Climate change will have a real impact on humanity; it will become a socio-political issue. And I believe that we also have a responsibility to continually improve and incorporate these improvements into products so that they have a tangible social and environmental effect.
EU countries are currently far away from meeting the 1.5-degree target. An evaluation conducted using the XDC Model indicates that European countries are at between 3.1 and 5.3°C of warming. This is calculated based on the emission intensity of the individual countries, i.e. the greenhouse gases emitted per head in each country, assuming that the current trends remain unchanged (known as the ‘baseline scenario’).
The topic of climate change has undoubtedly become a central issue for society. Climate activists who glue themselves to various objects, nuclear phase-out, speed limits – these issues are very emotionally charged. Why does this make it even more important to follow the facts?
Because we need to find common ground to be able to tackle the future. That offers people hope and an alternative to the issues that are currently muddying the waters of the debate in a rather aimless way. It is obvious that we will not make any progress without this common ground, as otherwise the focus will not be on the solution but on expressing one’s discontent with something, i.e. something very egotistical. We need arguments and objectivity. This is what successful creation in all its forms is based on, whether it be the economy, society or our own lives.
Accordingly, the X-Degree Compatibility (XDC) Model you developed determines the climate impact of a company and expresses it as a simple degree Celsius number. How meaningful is this figure in an environment where there are not yet any standards for reporting a company’s climate impact?
We use components that are rooted in science. For example, we use a climate model that is also used by the Intergovernmental Panel on Climate Change. In other words, we do not develop the model’s components ourselves but instead base our work on established, sound components, which we combine to create a model that helps companies to carve out a path towards alignment with the 1.5-degree target. This software is very complex. In our company, there are 15 people working exclusively on the model and our software products.
In the future, the Corporate Sustainability Reporting Directive will make companies’ data verifiable. This EU directive requires companies to make their plans for meeting the 1.5-degree target transparent. 15,000 companies in Germany will be affected. I suspect that this is a ground-breaking development that will change the market.
In the course of your work, you come into contact with important decision-makers. Does that give you even more motivation to make progress towards achieving the goal of your model?
Yes, of course, as we all want a viable future. We all want us to be able to live within the means of our planet. That requires change. And when you work on something like this, you feel very motivated to convey the value of this so that people are able to handle this change and, above all, accept it. I come into contact with decision-makers who wield considerable influence. How can I make them see that our model is a valuable tool that is worth supporting, and how can I provide them with the intrinsic motivation that is truly needed to bring about change?
What happens once you have calculated the °C number? How do companies respond?
Once we have communicated the °C number, companies become very interested in better understanding the model and exploring the various scenarios. For example, they ask what the effect would be if they were to switch to green electricity next year, use different materials or design their products differently, and whether that would take them down to the 1.5-degree threshold. They become eager to address the shortcoming. That’s obviously great to see.
Why did no one else come up with the idea to develop such a model first?
Sometimes I also ask myself why it didn’t occur to anyone else before it occurred to me (laughs). We recognised early on that this information would be important for the market. The carbon bubble was first reported on in 2013, the Paris Agreement was reached in 2015, and we founded our company in 2016. Sometimes people ask me, ‘What is the logic of calculating a °C number?’ I always explain to them that the Paris Agreement revolves around a °C number. What would be the logic of using a different unit of measure?
Turning to the future now, how should companies change if they want to minimise their impact on the climate?
I believe that the most effective course of action is to question your own business model by asking, ‘Is my business model reconcilable with a 1.5-degree world?’ It is not a case of closing factory doors, but rather thinking about how you might restructure your business model so that your company generates less emissions. This transition has a lot of exciting, wide-ranging potential, both in terms of the economy and positioning. It’s like a perfect sandbox which you can use to reinvent yourself. It involves enhancing your own business model, which is a powerful step.
Roles and responsibilities are often at the forefront of discussions about achieving our climate targets. In your opinion, who shoulders the biggest responsibility? Companies, states (policy-makers), or every single one of us?
Firstly, we are responsible for asking our managers, ‘What sort of company am I working at here?’ ‘Should I devote my manpower to the transformation towards 1.5 degrees?’ I believe that the power of actions like these is completely underestimated. The same questions can be asked of banks or insurance companies. Then every management board will be called upon to act, as the company’s future success will be on the line. Naturally, it is down to policy-makers to understand companies’ needs and remove obstacles rather than placing new ones in their paths while also helping to manage the balancing act between giving companies the space needed to be innovative and strategic and establishing the guardrails that are necessary to define the rules of the game.
This is therefore a team effort. And the target is attainable – I’m sure of that.
A biodiversity trail stretches around the WALA laboratory building, impressively demonstrating that biodiversity is not worth its weight in gold.
1.5 degrees? We are on our way there!
For WALA, caring for the environment is more than just a trend. Our history is not the only thing that compels us to protect the environment and use natural resources with care. We also have our future in mind. The target set by the Paris Agreement can only be met if CO2 emissions are drastically reduced in the near future. We at WALA are committed to taking on this challenge and responsibility and want to do our bit. By consistently avoiding greenhouse gas emissions, we have largely achieved carbon neutral status (Scopes 1 and 2) at our locations. And by that we mean true carbon neutrality that does not require compensation.
As 95 % of our energy needs are met with renewable energies, we are already playing our part in meeting the 1.5-degree target, with a temperature of 1.4°C in both Scope 1 and Scope 2.
Nevertheless, transparency is as important to us as the continual reduction of our emissions. Accordingly, we must acknowledge that we have not yet met our target. right° estimated a temperature of 2°C in Scope 3, which represents the emissions that occur in the upstream and downstream activities of an organisation along the supply chain. WALA’s overall figure is therefore 1.9°C. This drives us to keep working to reduce our emissions. We want to improve further and bring all our emissions into line with the 1.5-degree target.
For more information, please read our XDC Climate Impact Report.
TEXT: Rosa Thomas