Extreme weather events have become the norm, where rising sea levels disrupt communities, wildfires are becoming increasingly commonplace, and ecosystems struggle to endure. The global conversation around climate change is intensifying, and businesses are stepping up to play their part.
Embracing carbon neutrality isn't a trend; it's a responsible decision that benefits both your business and our planet. Let's delve into why going carbon neutral is a win-win and explore some practical steps to work towards making it a reality.
How can you align with customer values and still boost your ROI?
Operating more sustainably is good for the planet and great for business.
Imagine a world where your business thrives alongside a healthier environment. Going carbon neutral isn't just about being neighbourly; it's about responding to shifting customer expectations. Consumers today are drawn to brands that prioritise the environment. McKinsey research reinforces this trend.¹
- In a 2020 McKinsey US consumer sentiment survey, over 60% of respondents said they’d pay more for a product with sustainable packaging.²
- A recent study by NielsenIQ found that 78% of US consumers say a sustainable lifestyle is important to them.³
By embracing carbon neutrality, you're aligning with more and more of your customers' values, which will ultimately contribute to business growth. Have a read of ‘Let My People Go Surfing’ by Patagonia founder Yvon Chouinard to see how strong ethical principles and sound business instincts can work in harmony.
McKinsey and NielsenIQ conducted a study to examine sales growth for products that claim to be environmentally and socially responsible.¹
- Over the past five years, products making ESG-related claims accounted for 56% of all growth.
- Products making ESG-related claims averaged 28% cumulative growth over the five-year period, versus 20% for products that made no such claims.
Will being more sustainable bolster business reputation or add value to your brand?
It most certainly will! A commitment to sustainability (putting to one side for a moment all the altruistic reasons why this is a fabulous move) is great for marketing and will always have a positive impact on your brand reputation. Businesses that adopt carbon-neutral strategies enhance their brand image, attracting more of the environmentally conscious customers and gaining a competitive edge in the market, driving sales and boosting growth.
Anyone in doubt should have a read of this excellent report by Deloitte, ‘Sustainability in business: Staying ahead of the curve.’
Will being a carbon-neutral business drive employee engagement?
- Around 70% of employees and job seekers say a sustainability programme makes an employer more appealing.⁴
- 44% of executives consider their company’s climate initiatives to be an effective tool for recruitment and retention.⁵
Younger generations are increasingly seeking purposeful work and aligning with companies which share their values on sustainability. A commitment to carbon neutrality can boost employee morale, satisfaction and retention. Businesses should aim to be as transparent as possible with employees regarding their sustainability goals and offer training on how to help the company reach those goals.
“Sustainability includes how you run your business, and my bottom line includes how you treat your people. Sustainability starts with your staff.”
– Tom Douglas (American chef)
Do businesses have to go carbon-neutral? What about government regulations and international goals?
Many governments around the world are implementing stricter regulations and policies related to carbon emissions and environmental sustainability. By proactively working to reduce their carbon footprint, businesses can ensure compliance with current regulations and be ready to accept – or embrace – future changes to the law.
Scope 1, 2 and 3 are a way of categorising the different kinds of emissions a company creates in its own operations and in its wider ‘value chain’ (its suppliers and customers). ⁶
For many organisations, scope 3 emissions account for by far the highest proportion of total emissions. This scope accounts for indirect emissions throughout the entire value chain – from business travel and transportation to waste disposal and purchased goods' production. Unfortunately, these are also usually the hardest to reduce, but you can work with existing suppliers and their customers on solutions to reduce their emissions.
Even if your business isn’t required to report its carbon emissions and environmental impact, you might be part of the supply chain of a business that is. Scope 3 requires businesses to account for their supply chain emissions so you could be asked to provide this data. Staying ahead of ever-evolving regulations underscores your business's responsibility and foresight.
Working towards carbon neutrality aligns with international treaties like the Paris Agreement, which aims to limit global warming to well below 2° Celsius. Businesses contributing to these goals demonstrate a commitment to a more sustainable and equitable world.
What do people mean when they say, ‘Turn Green into Gold’?
Embracing sustainability isn't just about saving the planet; it's about saving money too! Energy consumption, waste generation and transportation contribute significantly to carbon emissions, but they also present opportunities for cutting costs. The phrase ‘turning green into gold’ goes back at least as far as 2007, in an article “Will Going Green Keep You in the Black?7
Transitioning your business to energy-efficient practices is very like upgrading your home to be more energy-conscious. It reduces costs and boosts profitability. In terms of transportation, although electric vehicles may come with a higher initial investment, they offer substantial long-term savings through reduced running costs. If EVs aren’t suitable for your line of work, could your vehicles be running on bio-oil?
And when it comes to waste, reducing single-use plastics and food waste isn't just environmentally prudent; it's also financially smart. Minimised waste translates to lower waste management expenses – a win-win scenario.
Investors are becoming more interested in sustainable and socially responsible companies.8 Businesses with strong environmental practices are likely to attract responsible investment and secure funding from environmentally conscious investors.
“If the post-war period was kept stable by a gold standard, the future of sustainable growth could be another colour entirely. There's a growing recognition that the push to net zero has the capacity to generate tremendous value through new solutions to the challenge of climate change.”
– Jerome Jean Haegeli, Group Chief Economist, Swiss Re Group
How is sustainability relevant to resilience and risk mitigation?
Climate change poses various risks to businesses, such as supply chain disruptions, extreme weather events and regulatory changes. Even more for businesses such as hospitality and tourism when affected by the direct impacts of climate change. By reducing the carbon footprint of your own business, you can potentially minimise some negative impacts on operations, but only by all pulling together, with more and more businesses taking a sustainable stance, can we address some of the bigger issues such as wild weather.
Are there more innovation or market opportunities for businesses that are environmentally friendly?
Transitioning towards carbon neutrality often requires businesses to innovate and adopt new technologies. This can open up opportunities for the development of new products, services and business models that cater to the growing demand for sustainable solutions.
You may even find that there are government initiatives or alternative routes for funding to come up with innovative solutions. And all around us are products and services that have built their entire brand – and business model – on sustainability.
What can your business do to reduce its carbon footprint?
Taking steps to reduce the carbon footprint of your business isn't solely about immediate benefits. It's about recognising your role in shaping a sustainable future for generations to come. By working towards carbon neutrality, you join a global movement dedicated to preserving the planet and forging a more responsible path forward.
Here are a few practical steps you could consider implementing in your business:
- Understand Where You Stand: start by figuring out your current carbon footprint. This means identifying the areas where you're emitting the most – and see our exciting news below.
- Set Goals That Make Sense: it's important to be realistic. Set achievable targets for reducing emissions and make sure you give the business reasonable timeframes to reach them.
- Boost Efficiency: find ways to save energy that suit your business. This could be as simple as switching to LED lights or even exploring renewable energy options.
- Manage Your Waste: waste less and manage what you do have and use responsibly. Think recycling, reusing and using smart waste disposal methods.
- Opt for Greener Travel: when it comes to transportation, think about how you can help your employees to make greener choices. This might mean using electric vehicles or sharing rides through carpooling.
- Team Up for a Better Impact: get your suppliers and partners on board with your sustainability goals. Collaboration can lead to a bigger positive impact.
- Keep Making Progress: sustainability is a journey, not a one-time thing. Keep an eye on how you're doing and adjust your efforts as needed to keep moving towards your carbon neutrality goal.
Our aim at Switch2Zero is to support businesses to achieve net zero status by eliminating their greenhouse gas emissions completely. We know that this is an ambitious goal but carbon neutrality is an important first step. There is always more to be done but our guidance and resources can help. Keep reading to find out more!
Drumroll … Our New Business Calculator is Coming Soon!
At Switch2Zero, we're excited to introduce our Carbon Footprint Estimator – a powerful tool for businesses that are committed to sustainability.
Measure: With the calculator you can accurately measure your business’s carbon footprint, gaining essential insights into your current impact. It's not just about numbers; it's about understanding your starting point.
Reduce: Our subscriptions provide you with the tools and guidance needed to implement effective strategies for emissions reduction. The Resources section of our website also offers recommendations to optimise energy usage, reduce waste and transition to more sustainable practices.
Take Action: Achieving net zero emissions is a journey and we recognise the feeling of urgency many business owners may have, and the desire to be making an impact sooner, or along the way. That's why our Instant for Business solution allows you to offset your current emissions while you work towards your ultimate Net Zero goal. This immediate action contributes to tangible change and demonstrates your commitment to a sustainable future.
Conclusion
Choosing carbon neutrality isn't about donning a cape; it's about being a responsible business leader. It involves meeting customer expectations, enhancing marketing efforts, inspiring employees and proactively addressing future regulations, all while making significant cost savings. Win-win!
Remember, your journey towards carbon neutrality consists of meaningful steps. Each action you take, however small, contributes to a more sustainable world for all. Begin today, and together, we'll work towards a brighter, greener future.
³ https://nielseniq.com/wp-content/uploads/sites/4/2022/10/2022-10_ESG_eBook_NIQ_FNL.pdf
⁴ https://www.ibm.com/downloads/cas/WLJ7LVP4
⁵ https://www.deloitte.com/global/en/issues/climate/deloitte-cxo-sustainability-report.html
⁶ https://www.nationalgrid.com/stories/energy-explained/what-are-scope-1-2-3-carbon-emissions
⁷ https://www.greenbiz.com/article/will-going-green-keep-you-black
8 https://www.esgthereport.com/what-is-social-responsibility-to-investors/
