Climate action and business profitability coexist
Christel Mathiesen
March 1, 2022
Climate action and business profitability coexist

More and more companies have to adapt their business models to the new challenges of climate change. Profitability and sustainability initiatives at business level represent two major objectives that have to be integrated into a company's strategy. They are not antagonistic concepts; they coexist.

The key to success is to see it as more than a "tick box" exercise. Here, we have listed five benefits of taking action, which starts with measuring CO2 emissions, that correlates with business profitability. Win-win for everyone!

  1. Future proofing

The demands from investors, customers and employees are reshaping the way we all are doing business. COP26 (UN Climate Change Conference) in Glasgow has changed the race to net zero for businesses.  Companies realize the urgency of becoming carbon-neutral and are building new strategies before it is too late.

CO2 taxes are booming, new regulations and laws will be enforced and carbon accounting will become a core necessity in business reporting.  Be sure your company is future-oriented and attractive for all stakeholders involved in the near future.

  1. Point of difference

Carbon reporting can make a market differentiation, setting an organization apart from competitors. Not just by gaining potential customers who are attracted by this approach but also investors and other stakeholders involved.

  1. Access to green funding and capital

Access to the best financing alternatives will be directly correlated with the company's sustainable profile. Over the past few years, the availability of green funding has grown dramatically. Businesses who demonstrate leadership in sustainability are more likely to have a pipeline of investments in their company.

Carbon emission control will bring a massive shift in the availability of capital available for businesses. Investors will penalize polluting businesses with a higher cost of capital and reward greener ones by making it easier to access funding.

  1. Talent recruitment and retention

In an era often depicted as being a war for talent, using carbon accounting as a tool to demonstrate your environmental credentials will help to attract – and retain – the best recruits. High staff churn is expensive.

  1. PR opportunity

What might drive a business to start carbon reporting is often legislation ant taking a position as an ESG player, but sales and marketing opportunities are also important key drivers.

We are moving from climate change to climate emergency. Companies who step forward and voluntarily display their emissions in an attempt to reduce them will benefit from a stronger public perception. They will be seen as organizations which genuinely care. Avoid greenwashing and document the journey to net zero.

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