2050 is thrilled to become one of the founding members of the Climate Dividends Initiative to support their pioneering approach to tackle the funding of the ecological transformation.
Climate Dividends offers a groundbreaking metric for evaluating the climate performance of investment portfolios, aligning perfectly with our commitment to a sustainable future.
Addressing the climate crisis requires carbon reduction actions and global decarbonizing activities. Massive investment in both of those is needed but is currently hampered by, amongst other, the absence of standard measures for investments’ impact and incentives for investors to target companies developing such activities. Climate Dividends offer a solution by providing a standardised and transparent indicator of the climate positive contribution of companies, going beyond traditional carbon footprint measurements, that can be valued by financial stakeholders. This metric not only helps investors identify businesses with a strong positive carbon impact through their activities but also encourages companies to develop more sustainable solutions.
At 2050, our focus extends beyond reducing current carbon footprints to developing significant, global decarbonizing solutions, understanding their importance in the climate crisis. Thus, Climate Dividends fit perfectly with our approach. In addition, our partnership gives us the ability to provide annual climate performance feedback to our investors and participate actively in developing low-carbon ecosystems.
Overall, we believe that working together with Climate Dividends will significantly contribute to achieving our sustainability goals and fostering a more fertile future. We are excited about the prospect of collaborating with Climate Dividends, a valuable addition to our ecosystem!
A new way of measuring climate performance with Climate Dividends.
The mission of the Climate Dividend Association is to accelerate the funding of the ecological transition, firstly focused on steering equity investment in solutions contributing to carbon neutrality through the development and promotion of Climate Dividends.
Climate Dividends are an extra-financial indicator corresponding to the positive climate impact of a company that can be claimed by its shareholders. They are the mirror of financial dividends for climate!
This impact is measured by the avoided emissions or removed emissions enabled by the company’s activity : 1 Climate Dividend = 1 ton of CO2e avoided or removed.
The avoided emissions by a company are the emissions reduced by the company’s customers through the use of the company’s products or services, they correspond to the comparison between a real situation (situation with the company’s products or services) and a fictitious situation, without the company’s intervention (called baseline or reference situation). Very concretely, a company selling and installing heat pumps as a replacement for oil tanks enables its customers to reduce their carbon emissions linked to their heating and thus can claim avoided emissions.
Climate Dividends serve to measure and communicate about this positive climate impact in a standardised, reliable and compatible way but provide an indicator of climate performance that can be used and valued by financial shareholders. They account for the “climate value” generated by a company and can be used in dedicated climate performance ratios (for example, € invested vs CD received for an investor or carbon footprint of a portfolio vs CD generated) or in valuation metrics (as a way to put a price on “climate goodwill”).
They are not a financial asset they cannot be sold, they are a shareholder right. And they can’t be used to compensate or offset (they are a proof of a positive contribution, complementary to the carbon footprint).
When ecosystem asset contributes to our climate positive investment strategy
At 2050 we invest in fertile ecosystems regeneratively. 50% of the team’s net performance fee is dedicated to support valuable assets for our ecosystem. This systemic investment strategy empowers and accelerates market shifts.
Ecosystem assets are built on 3 investment pillars:
- Sustainability knowledge to identify champions by gaining a deep understanding of the current sustainability trends, conducting a thorough, data-driven analysis of critical markets to identify impactful solution providers, and sharing our learning to our broader ecosystem under a Creative Commons label.
- Alignment R&D to provide better support and value by developing open-source tools and research alignment practices to encourage new industry standards. These standards align economic interests with societal, planetary, and future generational needs. The focus is also on research impact valorization methods and risk evaluation to improve performance, valuation, risk analysis, and forecasts.
- Portfolio advantages to boost performance by understanding and addressing systemic nodes across all portfolio companies’ and ecosystems through crowd-sourcing. We also support initiatives from these companies aimed at accelerating positive changes within their ecosystems, noting that these initiatives are typically bottom-up.
Although not the primary focus, we hope this effort will inspire other investment firms’ practices. By demonstrating the importance of a standardised carbon methodology, we aim to shift the broader investment landscape towards more socially and environmentally responsible practices, prompting a ripple effect in the finance industry.
Hunting tomorrow champion to craft a fertile future.
2050 came to know of Climate Dividends from Renaud Betting, Head of Carbon at Sweep, one of our portfolio companies. There are numerous and enormous synergies with many of our portfolio companies and this helps 2050 build an aligned ecosystem by addressing the systemic nodes. By leveraging our network of startups and potential beta cases for Climate Dividends we could help build the next generation of climate focused reporting metrics.
“We are thrilled to join 2050.do’s commons and to collaborate with 2050’s passionate team ! Climate Dividends are deeply in line with 2050’s approach and alignment. We are excited to contribute to 2050’s reflection on impact evaluation and to benefit from 2050’s expertise on commons’ IP, technology development and international growth ! “ said Laura Beaulier, CEO of Climate Dividends.
