How the Planetary Boundaries can drive impactful innovation
“Love the problem, not the solution”. This mantra underpins many of today’s most disruptive and successful products and companies. When paired with a powerful environmental framework, this wisdom can drive impactful innovation either by informing VC decision-making or by leading aspiring founders to their next venture.
This article takes a closer look at the Planetary Boundaries framework, its holistic view on our Environmental Crises, and how to apply it in decision-making using practical examples from the Ananda Impact Ventures portfolio.
The Planetary Boundaries (PB) framework, which was first published in Nature, identifies nine different environmental categories and boundaries, such as Climate Change, Biosphere Integrity, and Land-System Change. The article, named “A safe operating space for humanity”, shows how overstepping these boundaries leads to tipping points followed by unpredictable, non-linear environmental changes. It demonstrates that, because the Earth’s complex ecosystems are interconnected, violating one category can have catastrophic impacts on another.
The landmark article shows why focusing on climate change and GHG emissions alone is insufficient. The consequences of nearing tipping points related to Climate Change, such as the increasing frequency of megafires, already impact us today. Multiply these tipping points by 9 and you get a glimpse of what it would mean to overshoot every boundary. Additionally, the framework quantifies the status quo and provides transparency on where we stand with regard to overshooting the boundaries clearly showing where the problems lie (we have already overshot 6 of the 9 boundaries).
Applying the PB opens up the Carbon Tunnel Vision (for example, there is a huge discrepancy between media articles on climate change and biodiversity loss that cannot be explained by scientific output in both areas). This gives great guidance on which solutions really matter in order to stay within humanity’s safe operating space and how to increase resilience with adaptation strategies.
This also rings true when we consider the startup ecosystem — to date we have rallied around “ClimateTech”, but if we want to make good on our lofty promises of changing the world for the better we need to go beyond climate change. That’s not to say that climate change is not a valuable and hugely worthy cause — of course it is — but we need to add more dimensions to how we assess solutions. To enable real, impactful change, it is essential that we look at the current environmental problems holistically.
Identifying solutions that matter
For us at Ananda Impact Ventures, the Planetary Boundaries framework has enriched our impact assessment, supported our investment decision-making and guided us to new investment areas. Our investments in Klim, NatureMetrics, OroraTech, and Resourcify are all testament to this. All of them have a “Climate Impact”, but this goes far beyond GHG emissions alone.
Agriculture is the main reason humanity has overshot four of the nine Planetary Boundaries, and is also a significant driver for a fifth one, climate change. Regenerative agriculture is the solution that addresses all five of these problems. Combine this with a strong team and a great business approach and you understand why we are so bullish on Klim, which is enabling farmers to transition to regenerative agricultural practices.
The boundary for biodiversity has been significantly overshot. It is predicted that human activity has led to a 83% loss of wild mammal biomass and 50% decline in plant biomass, yet measuring precise losses and assessing the regional and global impacts poses a huge challenge. GHG emissions have now been internalised and economic markets have been developed for them, and we believe that the same will also be true for biodiversity. But this will only be possible if we are able to quantify the biosphere, and this is where NatureMetrics comes in. NatureMetrics is forging the way in this area by providing accurate analyses that provide powerful insights into ecosystems.
In 2021, 1.76 billion tonnes of CO2 were emitted from burning forests. If wildfires were a country, it would be the 5th largest emitter globally. This is not only devastating for the climate, but also impacts the biosphere, fresh-water, land systems and ocean acidification — which shows just how interlinked the nine boundaries are. Wildfires also dramatically demonstrate what the tipping points mean: climate change leads to changed weather conditions which in turn leads to more severe fires. The resulting emissions then lead to an acceleration of climate change. This is what scientists call a “feedback loop”.
Innovative ways to combat wildfires are therefore not only important for mitigating climate change and other boundaries, but also to enable humanity to adapt to the already changing living conditions. Our portfolio company OroraTech directly combats this issue by using thermal-infrared satellite data to detect, monitor and manage wildfires on a global scale.
Creating economic value
At Ananda, we are convinced that companies addressing any of the boundaries in an impactful way also create significant economic value. The PB provides the operating system for our human living conditions which is inseparable from the economy.
We have found that pursuing solutions to the world’s — and therefore humanity’s — most urgent problems have led us to the most ambitious, scalable, and industry-defining companies. Today, our portfolio companies have an impact on seven out of the nine PBs, and have the potential to significantly influence how we track each of these categories.
Of course, using the PB framework as a part of investment decisions or finding a new venture does not guarantee success. It does, however, provide great guidance that enables VCs and founders to focus on what really matters. It certainly has for us at Ananda.
Maybe the PB framework will have a similar effect on your decision making? What we need as impact investors, founders or just humans on planet earth, is a commitment to do everything we can to stay within the boundaries and meet environmental challenges with holistic thinking, boldness and gusto.
Our purpose is to invest in companies that build stuff that matters. We invest in industry-changing companies that help us stay within or return to the safe operating space for humanity. If you are one of them and address climate change and/or any other Boundary, please get in touch.
Written by Felix Ferstl, Investment Manager at Ananda Impact Ventures
