How can companies help to save the Earth?

Companies can help save the earth by adding environmental sustainability into their business strategy. The economic megatrend of climate change demands it.

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April 18, 2022

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Companies who want to help save the earth are embarking on an important mission to revise flawed logic that GDP and carbon emissions go hand in hand. Companies may assume that the environmental damage they create is a necessary sacrifice to keep our economy running. This way of looking at things is very short-sighted and out-dated. Not only do companies have the power to make business more sustainable, they’re already doing it and bringing financial returns, attracting investment, and responding to consumer demand. It can be hard to become a frontrunner in any space, but the sustainability space is likely to become mainstream in the future. Improvements in sustainability will likely disrupt existing methods. The market for sustainable products and services is growing everyday and new markets are opening up. The time is right to seize the opportunities and grow towards business models that preserve and protect the resources and conditions we depend on from our planet.   

💥 Do companies have an impact on the environment?

Of the companies that report to the CDP, only 2% (200) have received a score of A. What’s happening with the rest of them? Well, most of the companies that are failing to report their emissions are also making an outsized contribution to climate change

Thirty-two percent of the global market capitalization did not respond to requests from investors to report to the CDP. This totals 16,870 companies worth $21 trillion in market cap. You’ll find the same names of many of these businesses–Chevron and Exxon Mobil–in the next statistic, too.   

Only 100 companies are responsible for 71% of emissions since 1988, according to the Carbon Majors Report of Corporate Knights. The report points out that “a relatively small set of fossil fuel producers may hold the key to systemic change on carbon emissions.” 

What’s worse is these companies could be sitting on stranded assets. Research non-profit Carbon Tracker estimated in 2015 that $2tn in fossil fuel company investments in coal, gas, and oil projects over the next decade may lose their value with stronger international commitments unfolding.  

This level of financial and climate risk is not worth it. 

😰 Why should companies care about their environmental impact? 

Business leaders know there is an ethical reason to improve their environmental impact, but fail to link this to business strategy. Business leaders need to be able to understand the strategic value in business sustainability

75% of corporate sustainability professionals responding to a 2018 BSR/Globescan survey note that business leaders have not done enough to adapt business strategy to address climate change This is a megatrend impacting consumer behavior, financial flows, and material availability. 

Business leaders responding to the survey found ethics to be the top reason to pursue business sustainability. However, fewer than 33% of respondents said their business had adopted a sustainable strategy in their business planning. 

Business sustainability doesn’t only require an altruistic purpose. A majority of North American (64%) and European (84%) respondents said sustainability needs to influence core business activities.

Because the durability of their business models is jeopardized 💣

If we continue at today’s level of CO2 emissions, we’re on track to reach an increase in global average temperatures of about two degrees Celsius. This brings frequent and intense storms, floods, droughts, wildfires, and extreme weather. 

Not merely inconveniences, all of these impacts negatively affect business operations and weaken food and water security. Climate change is already destabilizing supply chains, natural resources, and financial markets. These impacts will continue to worsen without significant efforts to reduce CO2 emissions. 

Business leaders need to close the knowledge-action gap. While many business leaders understand the importance of environmental sustainability, not enough are taking actions in line with the science. Businesses should reduce emissions rapidly to net zero by 2050 in line with the Paris Agreement.  

Because legislation is more and more demanding with companies 📕

Given the lack of consistency and clarity on GHG emissions data, many countries are moving towards mandatory requirements to collect this data from large organizations. 

So far, the UK and EU both have climate risk disclosure regulations in place, while the US Securities and Exchange Commission is reviewing a new rule requiring large corporations to similarly disclose GHG emissions data and climate risk. 

These regulations fall in line with a growing trend to expose the financial risk associated with climate change. Regulatory pressure is likely to increase as the risks of climate change become more damaging and costly. 

Early movers to stay ahead of regulations have the advantages of keeping good relationships with regulators, maintaining a strong reputation, and avoiding fees and fines.  

Because investors are now vigilant on the sustainability of the companies they invest in 💲

2021 was the best year to date for sustainable investors, with no signs of slowing down. Environmental, social, and governance (ESG) investing in 2021 totaled $120 billion dollars, more than double that of 2020 at $51 billion. ESG investments showed a 25-fold increase from 1995 to 2020.   

Investors search for businesses with a long-term horizon for earning profits. Diverse factors from consumer demand to global policy have created a mega-trend driving investment toward businesses with proven environmental sustainability records. 

Institutional investors, in particular, are scrutinizing businesses not just for their short-term profit margins, but their low-risk operations, which can safeguard pension funds for the future.  

One of the biggest hurdles investors face is accessing consistent and comparable data on the GHG emissions of companies. The companies that are able to provide the data and show plans to reduce emissions are likely to receive favorable outcomes from investors

Because customers and employees are looking for brands that match with their values 🙋

Most consumers prefer companies which are addressing climate impacts and environmental sustainability, especially for climate change. 

A Cone Communications study shows 73% of Americans want companies to take action against climate change. The same proportion is also willing to stop shopping from companies that don’t prioritize climate change. 

American consumers are intentional about the brands they shop from. Most Americans (87%) would choose to purchase from companies that support issues they care about.

Companies are responding with more and more green campaigns, but many lack authenticity. Consumers are increasingly aware of greenwashing strategies such as celebrating pledges for future action, or highlighting insignificant action compared to the total footprint of a company. 

The companies that embed environmental sustainability into their core operations will receive stronger consumer support.  

Because improving the sustainability of a company may be synonymous with new profits 💵

The world has reached a unique nexus of alignment on sustainability from consumers, investors, and policy leaders. With support from all of these stakeholders, businesses who act on climate change could unlock a financial advantage of $26 trillion. 

In terms of business potential, it is a still underdeveloped area. The latest IPCC report shows that we need roughly 3 to 6 times more investment into clean energy technology to achieve the Paris Agreement Goals. 

Business sustainability improvements that address climate change reduce overall operating costs for materials, water, heating, electricity, waste management, and even health insurance. Optimizing resource use and minimizing unhealthy air pollution from burning fossil fuels offers practical financial benefits. 

Additional financial incentives come from aligning with demand: sustainable businesses demonstrate a stronger ability to attract investors, customers and new talent. S&P 500 reports companies who plan for climate change see an 18% return on investment. 

The time is right to transition to a low-carbon business model

🌎 5 actions a company can take to help to save the Earth

Businesses interested in transitioning towards an environmentally sustainable model need to create business systems and delegate responsibility to plan and achieve their goals. Here are some practical steps to start the path to improvement. 

Make a carbon footprint assessment 🍃

Lacking the data, most businesses aren’t aware of how much their operations contribute to climate change. Measuring GHG emissions is critical to addressing climate change, and it is the number one step businesses should take. 

Businesses can partner with Greenly to conduct a carbon footprint assessment of their business. This enables them to see which of their activities produce the most emissions. 

Next, companies can assess the opportunities to reduce or offset these emissions through technological swaps, redesigning products and services, changing organizational behaviors, or minimizing shipment trips for sourcing in the supply chain. 

Fight against waste and obsolescence 💻

When companies create waste, they don’t just discard materials but also value. People only use the vast majority of plastic packaging just once. This means 95% of plastic packaging worth $120 billion each year is thrown away after just one use. 

Companies should track and measure the amount of waste they produce and find opportunities to reduce, reuse, and recycle materials. By partnering with local organizations specializing in innovative industries specializing in recovering value from waste streams, businesses can improve their waste footprint.  

In addition, businesses should become aware of how their customers will interact with the products and services they create. By designing products that encourage wasteful behavior, businesses are contributing to an excessively inefficient system of resource use

Life Cycle Analysis addresses these issues and helps businesses identify ways to create a well-designed product that lasts a long time and can easily be repaired, recycled, or reused after its useful life ends.  

Optimize its energy consumption ⚡

Excess energy consumption not only burdens the electric grid, it adds additional expenses to operations that can quickly be minimized. Evaluating the way your business uses heating and cooling, lights, equipment, and appliances helps reduce the energy footprint

Poorly insulated buildings lose energy through the cracks in their walls and floor boards. Updating the windows and adding insulation can greatly reduce energy costs. Next, the source of heating and cooling can also be swapped with efficient technologies that can use renewable energy like a heat pump. 

For lighting, companies can replace their standard light bulbs with LED lights and install smart sensors to power off lights when they’re not in use. 

For equipment, older more inefficient items can be replaced with more efficient alternatives. During peak electricity demand times, efficiency is even more important. Under some time of use rates schemes, companies can reduce their fees by shifting use to off-peak times. 

Auditing the stored data files and digital footprint a company uses is another way to cut back on unnecessary energy use. 

Inform, engage and support its employees in adopting new sustainable habits ✌

Creating a workplace culture that rewards sustainable behaviors can help minimize your overall footprint. The first step is building awareness, but sometimes awareness is not enough to inspire action. 

Businesses can entice their employees to do activities like ride sharing, bringing reusable cups, and minimizing server file storage by creating rules, offering incentives, and training them on proper waste disposal. 

Community events, and planning input can also help bring employees into the process of making your business a more sustainable place to work. 

Invest in offsetting projects 💨

Carbon offsetting is so far one of the only ways businesses can fully reduce their CO2 footprint to zero or less than zero. Businesses can either purchase offsets from a vendor or pursue initiatives that offset their emissions. New technologies for direct air capture and carbon removal are also being developed. 

Offsetting projects may include activities such as restoring degraded lands, regenerative agriculture, or building renewable energy resources where coal is used.   

😍 What about Greenly?

Greenly helps companies become environmental heroes. We provide carbon assessments for companies of all sizes who want to save the earth. As the first step in a sustainable business transition, a carbon assessment will help businesses prioritize activities to reduce emissions over a timeline. Get the GHG emissions data you’ll need to respond to the world’s most pressing megatrend. Request a demo today. 

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Ines Gendre

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