An Overview Of Our Solution
Climate Psychologists like Per Espen Stoknes have outlined the necessity to “go with the flow of human psyche” instead of triggering natural human defense barriers when communicating climate issues. Momentum can only be gained if tools for designing climate strategies consider the way our human psyche works. It is time to understand that abstract facts, distant targets and communication focus on doom and disaster won’t mobilize action.
right. based on science has built a model, which computes a company’s contribution to global warming. It answers the question: “What would happen if everyone behaved as I do?” The so called XDC Model allows users to play with different assumptions and gives enough space to approach the climate topic at an individual pace. Functionalities and the way it interacts with users have been designed based on psychological concepts.
- Population Impacted: actually everyone
- Continent: Europe
Last name
Organization type
Context Analysis
right. operates in the context of sustainability management for companies and financial institutions. We see that climate practitioners within those institutions very often communicate the need for climate action in a way that does not lead to the desired results. We observe that the climate issue simply passes by decision makers, since it seems so distant from their priorities. As a consequence we observe rising frustration and a feeling of helplessness leading to sustainability practitioners separating themselves from core business operations. Another worrying behavior we have been observing is a certain degree of climate change denial – especially within emission-intensive companies. Sticking to Status Quo seems to be a better option for decision makers who have to deal with the climate issue in order to keep their status, rather than acknowledging climate as a true issue. Consequently we observe a concerning lack of leadership behavior in climate-relevant institutions.
Describe the technical solution you wanted the target audience to adopt
right.’s XDC Model calculates the so called X-Degree Compatibility ("XDC") of a company. If a company has e.g. a XDC of 2.7°C that means that the world would warm by 2.7°C by 2050 if every company operated as emission intensively as the one at hand. The model allows a user to compute an XDC under various macro and microeconomic assumptions, as e.g. “What XDC would I have if I reached my climate targets?” or “What XDC would I have if CO2-prices rise and I would purchase brown electricity?” By playing around with the numbers, the user understands where leverages are, how impact can be generated and thereby is able to connect his economics with the climate issue. Furthermore a user can easily compare the XDC of his company to the XDC of a sector and the XDCs of peers. All complexity is automatically managed by the XDC Model and the user can fully focus on his XDC and how it would change with different actions, such as investment in renewable energy or developing green lines of businesses.
Type of intervention
Describe your behavioral intervention
We try to change the way people communicate and design climate strategies. Current communication is too often focused on sacrifice, destruction and danger, this pushes all buttons in the human brain to prevent it from acknowledging the problem in the first place, so as a consequence no action can be triggered. Our XDC Model supports a way of communication that reframes climate messages as ones that inspire action and thus enable a next generation of climate strategies. The XDC allows a manager to emphasize concrete and company-specific options to master the transition to a <2°C-world and see this transition as a doable pathway. She/he would say “Hey, we are a 3.5°C-compatible company, but by (i) switching from fossil fuels to renewable energy, by (ii) using district heat and (iii) using low-emission transport modes instead of short-distance flights, we can become a 2.7°C compatible company. The rest is a massive opportunity for innovation, which we are ready to tackle.” By breaking global warming down to the contribution of a single company, where there is operational control for a decision maker, climate becomes part of her/his day to day processes.
We have ensured consumer adoption of our desired behavior by introducing as many people as we could into how to work with the XDC. We have held webinars, invited people to our own events, held speeches and presented our work in different groups of people.
As needed, please explain the type of intervention in more detail
Emotional appeal: it connects global warming as a distant topic to a single company as something that people are part of and thus can immediately identify with. Thereby it builds a bridge between people’s rational concerns about global warming and their more irrational day-to day concerns. Social appeal: people are becoming increasingly renitent to work in companies which evidently contribute to a changing climate which is increasingly linked to human suffering. It can be used as choice architecture: At Vattenfall GmbH (Germany), we calculated the XDC before and after their coal exit and the difference was huge. It helped them acknowledge the XDC Model and move from conversations about climate change not being real, to benefits they may have by using the Model.
Describe your implementation
The XDC Model turns abstract climate science and macro and microeconomic facts into a piece of compelling and relevant information for an individual person. Thereby it removes several barriers related to complexity without removing methodological sophistication. A user does not have to be afraid of losing his face when using the Model in front of others but can immediately jump to a field in which he feels comfortable, such as communication or strategy. We ensured this by hiring people that really enjoy working on scientific content, having conducted our own research project, which helped us understand the context sufficiently to know how action can be mobilized and spent lots of time with potential users and supported them in reducing additional barriers within their companies.
Enabling conditions:(i) collaboration with younger people, who take climate change very serious and (ii)sufficient time. A user explores the XDC Model before acknowledging its’ value for reaching personal targets, such as gaining status. This takes time and patience. A key success factor is the availability of good data from the user side as input data. If the data does not have sufficient quality, results are discarded. Furthermore it is exceptionally smart and determined people, who show interest in the XDC Model. We are delighted to give such people an instrument for framing strategies, with which to get their colleagues on board. Another key success factor is users not being afraid to ask for support when communicating the XDC Model to others.
We are currently facing the obstacle of not having enough references in order to ensure high enough credibility to those who might be sceptic. Climate change is really complex, which makes people insecure and therefore look for big brands to follow, hold on to and outsource responsibility to in case something goes wrong. What has helped tremendously was the admission into the ESA (European Space Agency) Business Incubation Centre Darmstadt.
External connections
We count the European Space Agency Business Incubation Centre Darmstadt (cesah GmbH) as our Key Partner, since it is supporting us by funding our research on how to use satellite data to compute national XDC values with the XDC Model. Furthermore the law firm Freshfields Bruckhaus Deringer is also a key partner, since it is pivotal for understanding legal requirements and raising awareness on how climate change will increasingly become a legal issue. Another key partner is the consulting company EY, which has started to use the XDC Model for own customer projects and thereby serves as a multiplier. Another key partner is the City of Frankfurt, which has awarded the XDC Model with a prize due to its innovative approach to bringing climate change to the comprehensible level of a single company. In order to promote the uptake of the XDC Model, the City of Frankfurt will organize an event with us, which shall introduce the XDC Model to mainly Frankfurt-based companies.
Who adopted the desired behaviors and to what degree?
A global online retailer uses our XDC Model to derive climate strategies. A Frankfurt-based academic institution uses the XDC Model within a large research project to highlight the role of organic wastes as raw material when it comes to transitioning from fossil resources to renewable biomass. A Major Asset Management firm is testing our tool in internal pilot projects for understanding the climate impact of their investments. A large German Bank has worked out a pilot for using the XDC Model to compute scenario-adjusted credit risk metrics. Products for managing climate-related risks at their client level shall be described and communicated via the XDC. This bank would e.g. give a company some incentive for using a credit for 2°C-compatible activities. Measuring whether an activity is 2°C-compatible can be done with the XDC Model.
How did you impact natural resource use and greenhouse gas emissions?
The XDC Model uses data for greenhouse gas emissions from different sources, such as company reports or third party providers. The XDC Model computes how many emissions have to be reduced by a certain company in order to be <2°C-compatible. The model can distinguish whether an activity of a 3.5°C-compatible company would be really <2°C-compatible or rather 3.0°C-compatible. The latter would also reduce emissions but not in the required amount to contribute to the transition to a <2°C-world. With this ability to measure reduction requirements and once its adoption by a larger group of actors within corporates and financial markets is underway, we believe it will enable radical greenhouse gas emission reductions.
What were some of the resulting co-benefits?
The XDC model computes the XDC based on gross value added (GVA). The less emissions a company spends in order to generate 1 Mio € of GVA, the lower its’ XDC is. This is why the XDC Model is a powerful tool to understand which economic development pathways really make sense for a company. We had first discussions with a German development agency to use the XDC when spurring sustainable economic development in developing countries.
We believe that by contributing to reducing emissions in line with the <2°C-target, the XDC Model will have co-benefits for other sustainability categories and thereby act as solutions multiplier. The most obvious is probably increasing biodiversity as a means to reduce XDC values of companies within the agricultural sector. Or water when reducing XDC values by increasing e.g. efficiency, closed loop solutions and renewable energy of companies within the electricity or industrial sector relying on water to cool down their plants and machinery.
Sustainability
The XDC Model relies on a mixture of grant funding for specific applications of the Model, government subsidies for further development of the Model and market based revenues. We have thoroughly analyzed the market and believe right. as the company building the model to be economically sustainable within 1-2 years. Since the model can always be improved, grants and government subsidies will always play a role without the XDC Model fully depending on them.
Return on investment
It has cost us approximately 300.000 € up to now to have implemented our activities. Our results are fully in line with our expectations and we are more than confident that with further development of the Model and its application to individual use cases from the financial and corporate world, the return on investment will be high.
How could we successfully replicate this solution elsewhere?
Since the solution is a Model that can be applied to all economic units, such as a company or a country, it does not have to be replicated. Instead access to the Model has to be created, which is technologically and easily feasible. If another party wanted to use the XDC Model, an intersection to our virtual machine would have to be installed. Depending on the complexity, this would cost minimum 20.000 €. Key stakeholders and partners would be local parties that could apply it to a certain use case, e.g. measuring the XDC of a community and designing strategies that are in line with a <2°C-world and monitor progress. Fully exploiting the potential of the XDC Model requires training by the team of right. .Training would entail how the XDC is being computed, what data is necessary, what modelling option are available, what levers exist to reduce the XDC, how it connects with climate change being of increasing legal importance and how the XDC can be used for communication purposes.