The energy landscape is undergoing a seismic shift, with the UK now generating more energy from renewables like wind, solar, and hydro than from fossil fuels.

This isn’t an isolated trend; it’s part of a larger global transformation. Yet, many still fail to see the profound implications of this change, which extends far beyond sustainability or climate goals. It’s a market and technological revolution reshaping industries, redefining business models, and recalibrating the global economy.

What does this mean for innovation? How should businesses adapt to this emerging reality? What opportunities and challenges lie ahead in a post-carbon world?

In a recent Innov8rs Learning Lab, Leo Rayman, CEO of EdenLab, explored these questions, highlighting the urgency of innovation in this transformative era. His insights reveal how organizations can position themselves to innovate for this inevitable future.

Leo Rayman

CEO and Founder at EdenLab

The Green Economy Is Surging Ahead

The green economy is growing to the extent of outpacing legacy industries. UK data shows the net-zero economy grew at 10% last year, far exceeding growth in traditional sectors. “Green jobs are going to be really crucial,” Leo explains. Up to 30% of job postings in markets like the UK now include a green or sustainability component.

Globally, McKinsey forecasts that $275 trillion will be mobilized over the next few decades to build the new net-zero economy. China, in particular, is already dominating the clean energy space. The country is producing 70% of the world’s solar panels and scaling innovations in electric vehicles (EVs) and battery technology.

One standout example is NIO, a Chinese EV company that allows drivers to rent their batteries. Instead of waiting to recharge, drivers can visit automated stations where a robot swaps out the depleted battery for a fully charged one in minutes, creating a seamless, scalable alternative to conventional charging infrastructure. “Has the race to the new economy already been run and won by China?” Leo asks.

This rapid investment raises essential questions about the future of business. Leo points to a broader shift where global energy giants are being replaced with emerging leaders (many of them Chinese) who are scaling faster, investing more boldly, and building infrastructure that aligns with the realities of a post-carbon economy. The falling cost of solar power is a prime example. Prices have dropped by more than 99% since the 1970s. Leo believes, “We’re moving toward a world where electricity is almost free,” raising critical questions about how value will be created and captured when energy becomes ubiquitous and inexpensive. Are today’s ownership structures and business models equipped to survive in a world where energy is abundant and practically free?

This is a disruptive shift for fossil-based models. “A single solar installation can run for decades, while fossil fuels require constant resupply,” Leo notes. That makes the economic model of coal and gas inherently less competitive. “Fossil energy is dead. It’s just a question of when.”

Why Resistance Persists and How to Break Through

Despite clear signs of change, not everyone is on board. Many businesses remain stuck due to limiting assumptions and emotional or structural barriers such as complexity, compliance pressures, cost concerns, risk aversion, fear, uncertainty, and shame. “Most of humanity is undergoing the ostrich effect on climate,” Leo says, referencing the cognitive bias to ignore bad news. These challenges make the problem feel too difficult to solve, leading people to avoid action altogether.

Many companies still see sustainability as a burden rather than an opportunity. However, Leo argues that constraints like carbon limits can act as creative prompts for innovation.

Instead of framing sustainability as a sacrifice, forward-thinking businesses are seizing it as a chance to create value while reducing impact. “Carbon removal is a beautiful constraint and a powerful catalyst for innovation,” Leo explains.

Innovation as Demand Switching, Not Demand Generation

One of the most impactful shifts for businesses today is moving from demand generation to demand switching. Instead of creating more consumption, innovators are finding ways to steer existing demand toward cleaner, more sustainable alternatives.

Demand switching focuses on changing how demand is fulfilled, using six strategies: substitute, shrink, save, stick, share, and socialise. This could mean replacing high-impact products with low-impact alternatives (substitute), reducing the size or intensity of use (shrink), extending product life (save), encouraging repair or reuse (stick), enabling access through shared ownership models (share), or shifting to services that deliver the same value without material consumption (socialise).

Take IKEA’s secondhand platform, which allows customers to purchase refurbished furniture. By integrating renewable energy purchases and recycling centers into its operations, IKEA is lowering its carbon emissions while increasing revenue. Another standout is Deep Green, a company that places data servers in public swimming pools. The servers’ waste heat warms the pools, saving local governments up to $80,000 annually in energy costs. That reclaimed heat isn’t just a clever technical fix. It enables community access and frees up budget for other local priorities—a tangible win-win that cuts emissions while improving public services.

Initiatives like these minimize environmental impact whilst actively creating economic and social value. Whether it’s TUI encouraging customers to choose eco-friendly travel itineraries or Trainline promoting train usage over cars, these businesses have the power to reshape consumer behaviors for the better.

These examples prove that sustainability-driven innovation is viable and commercially compelling. So why aren’t more companies fully embracing it?

Building the Commercial Case for Sustainable Innovation

Making innovation effective means addressing the tension between short-term pressures and long-term priorities. Leo doesn’t shy away from the reality that many ESG commitments have proven fragile to date.

“The ESG movement is like a cappuccino,” he says. “A lot of what is visible is just the froth on top. And under pressure, that froth has been blown away.”

Still, structural shifts are accelerating beneath the surface, and forward-looking companies are quietly adapting.

The key, Leo argues, is to reframe the conversation. Many innovators struggle to gain internal traction because sustainability is still considered a moral or political issue.

“Frame sustainability as profit, not politics,” he advises. “Because when the business case is clear, action follows.”

The case for carbon reduction is becoming harder to ignore. “The real social cost of carbon per metric ton is over $1,000,” Leo notes, referencing data from Harvard University. To put this into perspective, companies like McDonald’s, which emitted 55 million metric tons of carbon dioxide in 2021, would see their profits wiped out if actual carbon costs were internalized. “Today, no one’s going to make you pay for that,” Leo says. “But it could be different in five years, 10 years, 12 years from now.”

This economic reality places growing pressure on businesses to future-proof against regulatory and market risks. Companies that invest in sustainable innovation today will avoid future penalties and be positioned to lead in the next economy. These future icons of industry may not even exist yet.

Leo uses the term Gigacorn to describe the future climate-positive companies capable of both commercial success and massive carbon removal. “These Gigacorns are being born now, we just don’t know who they are yet. But they will be ones that will make a billion dollars of value, but they’ll also remove a billion tons of carbon dioxide from the atmosphere per annum.” Leo believes these businesses will define the decades ahead just as the tech pioneers reshaped the digital economy.

He also pushes back on the common excuse that customers aren’t ready. “What looks like an intention-action gap is actually a market innovation failure,” Leo says.

People want cleaner, healthier, low-carbon options. They just haven’t been given products and experiences that are easy, affordable, and visible. The challenge is in design, not demand.

Tech Alone Won’t Save Us, Human Innovation Will

While product innovation is crucial for sustainability, Leo also underscores the need for social innovation. He highlights a quote that resonates deeply: “Nothing is more dangerous than an outdated idea that’s still profitable.” Therefore, shaking up entrenched systems and behaviors requires businesses to tap into deeper human insights.

“Ultimately, tech innovation alone is never going to save us. What’s really needed is human innovation: how we work with each other, what we think is important, how we engage. It’s about tech and human innovation coming together,” Leo says.

One example is Parkrun, a global charity that organizes free weekly runs in communities worldwide. It delivers health, connection, and purpose without producing new physical goods. “It’s about doubling value while halving impact,” Leo explains.

This integration of human-centered design with technological progress can unlock transformational change. “If we’re not innovating for the emerging world, what is innovation for?” he asks.

Three Strategic Levers for Sustainable Innovation

Beyond ideas and intentions, there are three practical ways for innovation leaders to take action now:

  • Explore post-carbon futures: Use foresight to identify opportunity spaces that aren’t yet on the corporate radar. For example, Leo references a project in India where the R&D team from the corporate partner had overlooked the challenge of water stress, despite being in the handwashing and laundry business. Looking ahead to how societal, environmental, and policy shifts will unfold can identify previously unseen innovation pathways.
  • Audit your portfolio through a demand switching lens: By applying AI and data tools, companies can assess which products align with long-term sustainable demand and which are vulnerable. This diagnostic can inform sharper decision-making on where to invest, pivot, or phase out.
  • Reframe sustainability as value creation: Too often, sustainability is framed purely as a cost. But it’s a strategic advantage in a world shaped by carbon constraints and resource scarcity. The shift is from compliance to competitiveness, from meeting standards to creating new forms of value.

What’s Next? Transforming Innovation for a Post-Carbon Future

The post-carbon transformation offers both challenges and unparalleled opportunities. This is an urgent call to action for innovators to rethink priorities, redefine business models, and lead with bold ideas.

What if your company halved its carbon footprint while doubling its value? What would it take to consistently align your innovation goals with the net-zero economy that’s already underway?

Leo invites us all to reflect, connect, and act: “If only we had a community of brilliant, inventive minds with the power to reshape business and society on a massive scale.”

The good news? We do.

Innovators around the world are already setting the pace. The question now is how each of us will contribute to building a thriving post-carbon future.