An interview with First Climate COO, Mike Hatert
On the occasion of our company’s anniversary, our COO Mike Hatert looks back on First Climate’s 25 years of work on ambitious climate action and sheds light on the current and future challenges. Read our exclusive interview here.
Mike, this year marks 25 years of First Climate. What is a decisive milestone that stands out to you in the company’s history?
First Climate all started as an idea in Zurich back in 1999 and has now grown into a company that throughout the years has helped thousands of clients across the world on their climate action journeys. First Climate has been a pioneer in both the voluntary and compliance sectors, and I consider it a privilege to be able to dedicate my work life to pushing for impactful climate action together with the whole First Climate team and in collaboration with so many committed companies and partners around the world.
It’s hard to pick a single milestone that stands out for me in the First Climate story. I think, what’s always been characteristic for our company is the ability to develop new effective climate solutions in a market that is still young, dynamic and developing. From the very early days of project development in the late 1990s to the latest solutions in green energy or in the field of natural or technical carbon removal technologies, it has always been our goal to provide the right tools for effective climate action. And this goal still drives me and the whole team today.
What’s always been characteristic for our company is the ability to find new effective climate solutions in a market that is still young, dynamic and developing.
At First Climate, we work together across borders and across entities, uniting our project experts out in the field, our green energy team, our climate strategy consultants and all our other employees. For us internally this has meant more unified processes, more access to one another’s expertise, and a strengthened team and sense of unity. For our clients it has meant streamlined access to all our services for more ambitious climate action. I am proud to see First Climate’s journey from a niche environmental services provider to companies’ partner for their whole climate journey.
The world is still far from reaching international climate targets. How frustrating is the reality check on climate action?
It’s true that climate action is not—or at least not yet—the great success story we’d hoped for when the Paris Agreement was signed. But if you take a closer look, you’ll also see encouraging positive developments.
A recent report from the International Energy Agency found that renewable energy capacity grew at record paces in 2023 across the world. Replacing fossil fuel energy sources with clean alternatives is a decisive contribution to global climate action. Other studies indicate that carbon emissions are falling in many countries, including in the USA and Germany. Promising carbon removal technologies like biochar are being refined and scaling significantly, giving companies an opportunity to actively remove carbon emissions from the atmosphere—a crucial element to reaching net zero.
There is no alternative to scaling up climate action. Transitioning to a carbon-efficient economy and voluntarily committing to corporate climate action is essential to driving this forward. The science and technology are all there for effective decarbonization strategies and it’s up to us to ensure that we use them in the best possible way.
So, still optimistic. What are some key developments in climate action?
My personal background is in green energy and energy efficiency, and I am certain that there is still great climate action potential for companies in this area, and that new solutions with a direct impact on reducing emissions will continue to emerge.
And a lot of exciting developments are happening in renewable energy: Power Purchase Agreements (PPAs) for example, are an interesting and mutually advantageous option to connect green energy producers with companies looking to transition to clean energy.
Additionally, new I-REC markets have been growing exponentially in more regions, especially in Asia and Latin America. Green hydrogen and biogas products are also promising solutions with great potential for the global energy transition. It is important that we continue to develop and scale these technologies.
Many companies have recently been confronted with critical media reports and allegations of “greenwashing” for supporting climate projects. Where is the line between effective climate action and greenwashing?
Criticism is important to maintain integrity and quality of project-based climate solutions. However, I personally believe that in many cases the way this criticism is expressed is more harmful than productive for climate action. In my view, sensational and inflammatory reporting shuts the door on an opportunity to conduct an honest, meaningful, constructive discussion about the possibilities and limitations of project-based climate action.
It must be acknowledged that mechanisms for market-based voluntary climate action and the voluntary carbon market are still relatively new constructs in young fields that are still continuing to grow and develop and subject to continual evolution. In my view, the growing pains and resulting possible undesirable developments cannot be completely ruled out. It is very regrettable that individual projects or developers have taken advantage of loopholes to circumvent quality standards. It is also problematic that companies have made unfounded claims or had a lack of transparency around their climate neutral promises. But the experience of recent years also demonstrates that the nexus between business and climate action is not a theory but a working concept with great potential. A lot of research continually goes into the improvement of project methodologies to ensure the integrity of the markets. Initiatives such as the Integrity Council for the Voluntary Carbon Market, and their Core Carbon Principles will be important guard rails for the voluntary market with the aim of guaranteeing quality and integrity of project-based climate action for the long-term.
One thing is certain: The clock is ticking for the climate, and we cannot let the search for perfection throw us off course.
One thing is certain: The clock is ticking for the climate, and we cannot let the search for perfection throw us off course. Time is the critical factor for climate action. Efficient and scalable solutions for impactful climate action are needed now and we need companies to commit to decarbonizing their operations and to support global climate action. This is why I find it unfair that companies that take on climate change and voluntarily support climate projects are being criticized, while those who do nothing all too often come away relatively unscathed.
What role will carbon credits play in corporate climate action in the future?
Carbon credits are a way to channel financial resources to where they are most urgently needed for climate change mitigation and adaptation, and as a complement to aggressive decarbonization measures for the biggest impact. In comparison to previous periods, we are seeing more and more companies attaching great importance on a project’s quality and real impact for the climate. I think that is a very positive trend because carbon credits will remain an essential instrument of corporate climate action for the foreseeable future.
A practical check shows us that carbon credits are better than their reputation: Studies have shown that almost 60% of companies that buy carbon credits report lower annual carbon emissions in comparison to companies that don’t. And companies that buy carbon credits are three times more likely to set science-based targets, and more likely to disclose their emissions. Carbon credits are not used as a substitute for climate action, but an additional tool for it.
Studies have shown that almost 60% of companies that buy carbon credits report lower annual carbon emissions in comparison to companies that don’t.
Climate change is here, and it’s up to us how we choose to react. Carbon credits are a tool that we cannot ignore on our way to net zero.
What do you see as the big challenge for corporate climate action in the next few years?
Supply chain decarbonization. Without a doubt. Decarbonizing a company’s operations is a challenge, but supply chain decarbonization is a whole other ball game. A CDP study found that supply chain emissions can exceed direct company emissions by a factor of 10 to 28. If companies want to reach their climate goals, it’s crucial to not only locate and manage emissions from their own operations, but also their upstream and downstream emissions.
If companies want to reach their climate goals, it’s crucial to not only locate and manage emissions from their own operations, but also their upstream and downstream emissions.
This is a challenge because supply chains are always unique and so there’s no one-size fits all approach. We have seen time and again how management of emissions along a company’s supply chain, or scope 3 emissions, require an effective stakeholder engagement strategy, experience in supply chain decarbonization and sometimes even creativity and a “think outside of the box” mindset.
This is also why climate disclosures and sustainability reporting can actually be beneficial to companies, because it can help to identify these hotspots and trigger important stakeholder conversations. And with sustainability reporting becoming mandatory for more companies with the CSRD, this will gain considerable importance in the future.
What advice do you have for companies taking climate action?
Transparency and integrity are key. One of the biggest steps we’ve taken at First Climate in this respect in the past few years is in growing our project development services: Clients have the opportunity to work closely with First Climate expert teams on developing their own climate project so that they also have direct say over a project’s direction and development and the project outcomes. This could be in additional support of global climate action, or we can find ways to integrate a project along a company’s supply chain, directly reducing their Scope 3 emissions.
Transparency and integrity are key.
Disclosing climate impacts - with both voluntary and mandatory standards – can also facilitate and encourage more transparency regarding corporate climate action. With First Climate Consulting, we offer companies competent support in meeting the challenges that come with sustainability reporting in a targeted, and efficient way.
What is your vision for First Climate and climate action for the next 25 years?
In 25 years, we will be right up against the 2050 mark, which many countries, companies and most of our own clients have set as their deadline for net zero. We have a very clear goal at First Climate: Doing anything and everything we can to help companies achieve their goals by this timeline. If we can achieve limiting global warming, then I will consider that a success for all future generations.
It’s hard to say for sure what will come, but First Climate will continue to work closely together with its clients to successfully to develop solutions to deal with these changes and to slow down climate change. The climate crisis is too important to do otherwise.
