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Problem

Problem Statement

The problem a social enterprise startup is trying to solve is the most important since it determines the market size, the minimal viable product, and the talent a startup needs. Hence, here is the introduction to the problem we are solving now.

Our Climate Ecosystem

Our society evolves by solving problems, not by escaping them. The vast majority of scientists agree that climate change is a human-made crisis, driven by 7 types of greenhouse gas emissions from global human activities. It is a growing, urgent global problem that will trigger more irreversible disasters if we don’t take action now. While stakeholders are proposing diverse solutions, our current pace is simply too slow to limit global warming below 2 degrees Celsius.

The root of the failure lies in our imperfect capital markets: external environmental costs are completely disconnected from where human value is created, exchanged, and stored.

Furthermore, the climate crisis is compounded by 3 structural layers that make it exceptionally difficult to solve:

Personal Climate Responsibility Gap
Decarbonization without Biodiversity
Climate Movements without Finance

Personal Climate Responsibility Gap

Climate change is a dynamically complex problem that requires systemic solutions. Without systemic thinking, today's climate solutions will become tomorrow's problems.

Scope 3 emissions mainly originated from stakeholders' Scope 1 and 2 emissions. When we ask businesses to take other stakeholders' Scope 1 and Scope 2 emissions as their GHG responsibilities, we indirectly allow stakeholders to have free-riding problems.

In a global capital market where competition is encouraged for efficiency and effectiveness, stakeholders' free-riding problem harms voluntary climate action. It harms the market demand for the climate solutions proposed by startup founders and slows down our climate progress.

As individuals, we are our customers and the beneficiaries. To address climate change, we must ensure that people who benefit from these activities are responsible for their external costs.

Decarbonization without Biodiversity

Why should we care about nature when the net-zero goal is our priority? Doesn’t it compete with our emission reduction goal?

Yes. When we advocate, protect, and regenerate our nature, we would inevitably discount some of our efforts on emission reduction and removals. Nonetheless, “How can we live in a net-zero world where water is polluted, food is insufficient, and there are massive conflicts between different societies?”

Ocean ecosystem holds significant potential to store greenhouse gas(GHG) emissions faster and longer than forest ecosystems. Still, it is a relatively new field where people have very limited knowledge. With further support from funding, research, and responsible consumption, our progress in protecting and regenerating nature will be fast enough to stop the speed of biodiversity loss.

Climate Movements without Finance

Without finance, climate action is unsustainable. When it comes to climate finance, oftentimes, people overemphasize the importance of investment but ignore the importance of long-term market demand.

Primary market investment is critical; however, investment is not a revenue stream. Without market demand from consumers, there are no producers or businesses, and fossil fuel pollution will never happen. Without market demand from consumers, there are no climate tech startups, and the net-zero transition will never happen. To accelerate the net-zero transition, we need long-term market demand.

People can quickly mobilize through responsible consumption and donations, but without proper planning, they remain unscalable and short-lived—especially since most human activities generate greenhouse gas emissions daily, demanding continuous, long-term climate commitments.

To support the climate movement at scale, in time, with limited resources at a higher success rate, we need systems thinking and regenerative finance to bridge the gaps in an imperfect capital market.