Project Frame was established by a group of investors who recognized the need for a new system of assessment around this core calculation, which is designed to evaluate the GHG impact of proposed climate solutions as they scale to replace a status quo technology contributing to climate change. They also recognized that early-stage solutions, which lack extensive operational data, faced particularly difficult assessment challenges.
The core of our work is the development of a standardized, robust, and transparent methodology to assess the GHG impact of emerging climate solutions. Today, we focus more on forward-looking assessment. By standardizing the way GHG impacts are assessed, Project Frame also facilitates greater transparency and comparability across investments.
In this section, we establish two essential structures driving the Project Frame methodology: standards for the scope of analysis and a classification system for climate solutions that ground most calculations.
About Project Frame
Project Frame (Frame) is a nonprofit program, convened by Prime Coalition, built to organize investors around forward-looking emissions impact methodology and reporting best practices. Our mission is to mitigate climate change by demystifying climate investing and improving Impact Measurement & Management (IMM) to drive capital towards the best possible climate solutions while galvanizing a network around transparency, accountability and collaboration.
Our goals include:
Helping investors efficiently identify investments with the highest potential to achieve GHG mitigation.
Demystifying the process to encourage consistent procedures for including forward-looking GHG impact assessment in investment decision-making, centering transparency in order to discourage bad actors and greenwashing.
Facilitating collaboration to develop common terminology and best practices to encourage a shared understanding that aligns efforts across different stakeholders, fostering a more coordinated approach to addressing climate change.
About Prime Coalition
Prime Coalition is a non-profit organization on a mission to unlock catalytic capital and change the future of climate finance.
Since 2015, Prime has mobilized over $315MM in catalytic capital with 247 partners to back 38 early-stage ventures. Through its steering capital strategy, including Prime Impact Fund, Azolla Ventures and Trellis Climate, Prime builds and implements impact-first investing teams toward acute gaps in climate finance that commercial capital cannot fill.
With its influencing capital strategy, Prime offers a range of field-building resources, including Project Frame, the open-source CRANE tool, and the Catalytic Capital Intermediation Resources Library.
I. Introduction and Scope of Analysis
At its simplest, greenhouse gas (GHG) impact is net unit impact multiplied by volumes of the solution.
The analyst identifies the difference in emissions between a solution and its incumbent at the most granular replicable unit (net unit impact); then, they multiply this difference in emissions by a total number of units of the solution in a market (volumes).
Scope of Analysis
Purpose
Project Frame’s methodology is designed to help investors assess the GHG impact of climate solutions. It is meant to align investors with solutions from pre-seed stage into growth equity that are on a path to sustainable, scalable impact. It also seeks to establish common language to help investors, entrepreneurs, and NGOs communicate transparently about the GHG impact of their solutions.
The current version of the methodology is written for investors who have moved beyond early learning in GHG impact assessment, building upon Frame’s original 2023 methodology, “Pre-Investment Considerations: Diving Deeper Into Assessing Future Greenhouse Gas Impact.”
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The Frame methodology focuses on GHG metrics alone and does not currently provide recommendations on other environmental or social metrics. However, it can accommodate other dimensions guided by the investor.
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The methodology is designed to compare GHGs of a solution and the appropriate incumbent or status quo. For example, the solution unit is the smallest replicable instance of a solution sold, such as a heat pump, while the incumbent unit is the equivalent product it would displace. This is the basis of our definition of “impact” and distinct from GHG footprinting, which typically assesses absolute amounts of past GHGs emitted by a product, solution, or company. The GHG impact formula can also meet the needs of investors assessing climate solutions that do not have an incumbent, such as in carbon removal. For more, read “Classification System for Climate Solutions.”
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The methodology is meant to help investors decide whether to invest in a proposed climate solution that achieves GHG impact by scaling, and thus taking market share away from the incumbent. However, scalable technologies can also cause rebound effects that have no or negative impact. We discuss this in “Rebound Effects."
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The current Frame methodology covers both forward and backward looking GHG impact assessment. As solutions evolve, methodologies must evolve. Frame’s methodology is meant to help investors achieve the most accurate analysis possible based on the available data for the solution stage and use historical data when it is available to inform investment decision-making and reporting.
What is and is Not Analyzed
Critical Workflows
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An analyst may encounter a material source of difference at any life cycle stage. Frame emphasizes that a cradle-to-grave system boundary is essential in qualitative analysis.
But investors in early-stage solutions must parse through dozens, if not hundreds, of solutions to deploy capital in a short period of time. How can they efficiently review all stages of the life cycle, knowing that it is unrealistic to quantify every single potential source of difference between a solution and incumbent and that some sources of difference massively outweigh others?
What sources of unit emissions are material, or “worth quantifying?”
This question forms the basis of a step in net unit impact analysis, meant to help analysts think through which sources of unit emissions are material before spending time quantifying sources that are unlikely to prevent the solution from clearing a firm’s GHG impact targets. Depending on investor feedback, we may apply the concept of materiality to other steps in the assessment process. This use of materiality is different from others often heard in the investing context, such as whether environmental or social factors are material to a company's financial performance.
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There are plenty of proposed climate solutions. Among them, fewer have a significant unit impact and far fewer of those have the realistic potential to scale. Even within that smallest pool, there are not enough investment dollars available to support all. How do investors efficiently filter—or downselect—solutions to drive capital towards solutions that have the highest probability of clearing both impact and business targets?
The Frame methodology starts with market segmentation and overall business analysis to ground impact analysis in business realities, meshing with traditional downselection processes.
Classification System for Climate Solutions
Frame describes a climate solution as an intervention, product, or service that intends to and shows evidence it can achieve GHG impact. Project Frame defines impact as a real-world change caused or enabled by an organization (based on the goods or services produced). Impact can be positive or negative; intended or unintended; direct or indirect; or incremental or systemic.
GHG impact is a change in GHG emissions caused by an organization. Frame defaults to GHG impact implying a “positive” outcome unless otherwise stated. In addition, since Frame’s focus is early-stage, an organization may represent a single solution.
Frame currently classifies climate solutions by impact and pathway types.
Impact Types
How the Solution Broadly Achieves GHG Impact
Avoiding Emissions
Avoids future emissions by replacing or taking market share over time from an incumbent responsible for higher emissions. Most climate solutions today fit within this category.
Removing Emissions
Removes carbon from the atmosphere. In this case, there might not be an incumbent to compare the solution to, but that doesn't automatically imply that its impact will be positive. All new sources of emissions must be considered, as well as potential ways in which such technologies could trigger consequences elsewhere in the system. See “Action and Reaction Across Systems” for more.
Pathway Types
How a Solution Functions Within a System of Integrated Solutions
Direct
In direct solutions, the positive GHG impact would not occur without them.
Product: Complete solutions that can be purchased and used to directly achieve GHG impact. Examples include an electric vehicle (EV), heat pump, or sustainably produced food.
Component: Critical parts of an overall solution that contribute significantly to its GHG impact. The overall impact depends on how the product containing the component is used. Examples include an EV battery, more efficient motor, or recycled materials
Facilitating
Facilitating solutions enable or improve the effectiveness of direct solutions. They do not directly achieve GHG impact on their own, but enhance direct solutions. Facilitating solutions may:
Affect the unit impact of a direct solution, such as software that significantly improves the efficiency of renewable energy technologies or reduces waste or energy use in manufacturing processes.
Affect volumes of a direct solution, such as a green marketplace that accelerates the deployment of electric vehicles by connecting consumers with suppliers or financing.
Why Does Classification Matter?
To achieve GHG impact, no solution works entirely on its own. Even direct product solutions— the solution pathway upon which the Frame methodology is built—achieve GHG impact through components and an ecosystem of suppliers, marketplaces, policies, and more. Frame’s classification system is meant to help investors systematically structure quantification for every combination of solution impact and pathway type, typically by focusing first on the most proximate source of impact: the direct product. From there, investors modulate unit impact, volumes, or adjustment factors according to the solution they may be considering for investment.
Additional Resources
