Action Guide

Identify and Act on High Impact Innovation Opportunities 

Environmental Defense Fund

Climate innovation investments can reduce your company’s risks, help you plan for the future and showcase climate leadership. Having a deep understanding of your emissions sources and the current state of solutions available to reduce them will maximize the impact your investments have.

Once your company has committed to supporting climate innovation, it is important to ensure the investments you make and the advocacy you do has the highest impact. Mapping your emissions profile and identifying the sources that require innovation is a key step, as is understanding the current state of play in terms of whether other companies, startups or consortiums are working to accelerate technological development.  

EDF has identified three key priority areas of innovation, and a further supporting ten, but the innovation areas that will be most appropriate for your business will depend on your sector, operations and context. Regardless of which technologies your company intervenes in, environmental justice concerns should be intentionally incorporated into the process.  

Map Emissions Sources That Require Innovation

To ensure that innovation investments and advocacy efforts are effective and efficient for your business, it is important to map out the emissions sources across your operations and value chain. For each emissions source it is important to understand:  

  • The materiality of the emissions source relative to your other emissions sources  
  • The technological readiness and commercial viability of solutions to the emissions source 
  • Current innovation efforts to improve the solutions to the emissions source 

By understanding these factors, your company can make informed prioritizations of innovation areas to invest in and advocate on. These factors can also help your company determine what actions to take in the prioritized areas—whether that be actions such as trialing emerging solutions in-house, funding startups that are developing prototypes, or collaborating with others in your industry to send demand signals to the market.  

For example, your company may identify methane from livestock as a significant emissions source in your value chain. A primary emerging solution to this emissions source is methane inhibitors and digesters like feed additives. These inhibitors are not yet mature in their technological feasibility or commercial viability, but they have progressed beyond the initial experimentation and prototype phase and are on the cusp of commercialization. This suggest that actions such as co-investing with industry peers in pilot programs, as well as advocating for the USDA to make climate change mitigation a statutory priority and support this with R&D funding, are appropriate for accelerating progress in the technology. 

The ‘Big 3’ and ‘Extended 10’ Innovation Areas

Your company’s innovation priorities will depend on your specific sector, operations and context. There are however a number of innovation areas that are key leverage points for system-wide transformation. Developing technologies in these ‘Big 3’ areas will have cascading effects across the economy and will impact almost every business. ‘The Big 3’ areas are: 

  • Renewable electricity: renewable electricity solutions such as solar and wind are technologically mature and cost-effective. There are however aspects that require further innovation, such as improving installation and permitting processes, improving waste and material use and addressing the variable nature of solar and wind. Actions that companies can take to support this key area of innovation include signaling long term demand for renewables, and advocating for the government and utilities to develop recycling solutions for solar panels and wind turbines. 
  • Grid connectivity and storage: today’s electricity grid is not fully prepared for an energy mix dominated by renewables. Technology solutions to this include batteries, clean hydrogen storage, smart grids and load flexibility—which vary in their current feasibility and commercial viability. Companies can support innovation in grid connectivity and storage by working with utilities to maximize their use of demand response options and by implementing storage capacity targets along with renewable procurement targets. Advocating for policies that will support storage innovation is also important.  
  • Sustainable fuels: some modes of transport such as aviation and shipping cannot easily be electrified, and there are currently no commercially viable sustainable alternatives to fossil fuels. While low-emissions fuels like clean ammonia and biofuels are in development, current prices are too high to compete with carbon-emitting fuels (which continue to be subsidized by governments). Companies can help address this through stronger demand signals like targets and purchasing agreements, which may require collaboration across the sector to establish a critical mass. Advocacy that pushes for the phase-out of fossil fuel subsidies is also key to unlocking innovation in sustainable fuels.

Actions to accelerate progress in these areas will be critical to creating a foundational source of clean energy and will unlock the full abatement potential of other technologies. EDF has also identified ‘The Extended 10’ technologies necessary for net zero that build on the ‘The Big 3’. Scaling ‘The Big 3’ is necessary for ‘The Extended 10’ abatement technologies to achieve their maximum impact. ‘The Extended 10’ are: 

  • Concrete carbon capture use and storage (CCUS) 
  • Green steel 
  • Alternative refrigerants 
  • Building insulation 
  • Battery EVs and charging networks 
  • Alternative proteins 
  • Livestock methane inhibitors 
  • Precision agriculture 
  • Direct air capture 
  • Nuclear fission and fusion 

It is likely that some of these technologies are directly relevant to your business, while others are not. Exploring those that are relevant to you may be a place to start in the prioritization process described above for potential innovation investments. 

Manage Environmental Justice Considerations

The net zero innovation challenge presents an opportunity for first mover companies, technologists and investors to become leaders in the low carbon future. But it is crucial that the development of new technologies do not solve emissions sources at the cost of vulnerable groups in societies.  

The easiest time to mitigate the risks of a technology is in the early design and testing phases. Companies must be intentional in managing the externalities of their innovation efforts and ensure new technologies have a positive effect on environmental justice rather than worsening existing inequalities across socioeconomic, racial and geographic groups. For example, it is important to explore the implications of a nascent technology being developed at scale. Doing so may require the mining of inputs or the disposal of waste at a magnitude that will have adverse outcomes for communities already at risk of climate change related hazards and degradation.