New Article - Five Reasons To Become Carbon Neutral

Climate change and climate action are something that most of us worry about. It is hard to avoid the images of the devastating effect climate change is having on our planet and its inhabitants. Increasing awareness and external pressures are resulting in more companies taking action to reduce their climate impact and become carbon neutral. For many businesses, becoming carbon neutral is the first step on their pathway to becoming net-zero. There are many simple solutions that your company can easily implement to help fight this battle. We help our clients understand the short and long-term benefits to their business of taking climate action, becoming carbon neutral and achieving net-zero. In this article, we outline 5 important reasons to become carbon neutral and help you to start your business journey toward net-zero.

1. Customers are showing a growing preference for carbon-neutral brands

Environmental concerns are increasingly influencing customers’ buying decisions, leading to a fundamental change in consumer and business buying behaviour; today, customers demand more than just quality. They actively choose brands that align with their values and operate transparently.

Today, most customers are more prepared to change their consumer relationships. Of those that report sustainability as an important factor, 70% would be willing to pay a premium of 35% more for sustainable and environmentally responsible brands. In this context, companies that thrive are those willing to adapt their strategies. Therefore, being climate positive will help them attract customers; as a result, they are also more likely to gain a competitive advantage.

We are witnessing similar demands for increased transparency within B2B procurement, with half of buyers measuring their supply chain partners' environmental and social performance. In addition, more than 3 out of 4 large businesses already include a sustainability clause in their procurement contracts. Microsoft, for example, implements a detailed code of conduct that requires suppliers to disclose their carbon emissions. Microsoft is committed to continuously reducing both its carbon footprint and that of other players in the industry.

2. Employees prefer employers that think and act responsibly

The current generation of employee talent is evaluating their potential job offers based on a company’s positive environmental and social sustainability impact. In addition, positive Planet customers are increasingly reporting that job candidates ask whether the company is committed to sustainability and is carbon neutral.

A recent Deloitte survey recently revealed that Millennials seek meaningful work and want a positive social impact. However, two-thirds of them are reluctant to take a job unless the employer has strong corporate social responsibility (CSR) practices. In addition, most would prefer to accept a lower salary than work for an environmentally and socially irresponsible company.

By 2025 millennials will account for 75% of the global workforce, which means that employers need to be more aware and aligned to their needs to attract and retain top talent.

3. Incorporating sustainability into your business helps to grow your revenue and reduce your costs

Companies often wonder whether sustainability “undermines or improves financial results”. However, according to research by non-profit organisation CDP, companies who diligently plan and manage climate change can gain an 18% higher return on investment than businesses that do not. Additionally, companies with sustainable products are growing 5.6 times faster than their non-sustainable alternatives.

Global consultancy McKinsey has also identified that focusing on environmental, social, and governance (ESG) objectives can substantially reduce costs. Embracing sustainable practices helps to counter rising operating expenses (such as raw material costs and the actual cost of water or carbon). Improved energy efficiency, for example, can drastically reduce energy costs, delivering an internal rate of return (IRR) of 48% on average.

4. Investors are looking for future-oriented businesses and those not afraid to move first

5. It's only a matter of time until climate-focused regulations heavily impact how you conduct business.

Climate-focused regulations are changing and will benefit those companies that successfully incorporate sustainability into their business practices. While some companies can still voluntarily disclose information regarding their sustainable initiatives, non-financial reporting is already mandatory for most large companies. The EU law, for example, requires large public-interest companies with more than 500 employees to disclose information on the social and environmental impact of their activities.

Businesses should plan for more regulations moving forward as there is growing pressure from many parties to make it mandatory for even small businesses to implement and be accountable for sustainable practices.

It is, therefore, essential that businesses prepare for mandatory environmental reporting rules, especially for publicly listed companies, as they will be among the first ones to be subject to disclosure regulation. Therefore, companies need to stay ahead and be aware of the rules, as it is also crucial for maintaining a competitive advantage. Apart from that, failing to keep on top may result in penalties and potential legal issues.

Sustainability is a long term programme.

Knowing where to start when it comes to implementing sustainable practices can appear intimidating and overwhelming, yet we hoped to have eased your mind and helped you understand what benefits your company can benefit from going green. Sustainable practices will save time and costs, as well as attracting a loyal customer base and the top talents of the next generation.This is an excellent opportunity to be the pioneer within your industry, take that bold step and gain that competitive advantage. Becoming more sustainable is a journey, and now is the best time to get started.

Would you like to lead your company into a carbon-neutral future? Positive Planet can support you on this journey, helping you to measure, reduce and offset your carbon emissions.