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The 7 Business Benefits of a Carbon Reduction Plan

business benefits of carbon reduction

Are you keeping up with current market demands? In 2024, sustainability is no longer an option—it’s a significant opportunity for businesses like yours. A well-thought-out sustainability strategy can drive economic growth that translates directly to your bottom line. Here, we do a deep dive into all the ways businesses benefit from reducing carbon emissions – and how planning for net-zero can help you tap into these powerful dynamics.

With so many things demanding the attention of business leaders nowadays, it’s hard to separate the wheat from the chaff – that is, to know which shiny new things are just that, a trend and a distraction, and which ones are here to stay. Take for example flexible and remote working. Despite growing evidence of people either leaving or passing on jobs that don’t offer flexibility, some employers still hesitate to adopt it.

Similar to flexible working, sustainability is here to stay. It’s not a passing trend – it’s the new (and better) way to do business. How long can an employer afford to miss out on good candidates and at what point does this become an issue? Similarly, what tangible benefits are you potentially leaving on the table by delaying sustainability?

Let’s find out.

1. Investor confidence

Today’s investors are increasingly factoring sustainability into their decisions when deciding what sectors and companies to invest in.  So much so, that some banks in fact prioritise businesses that can evidence their sustainability goals and carbon reduction plans by offering preferential rates and lending conditions.

It’s also a good sign that since their debut and boom in 2017/2018, sustainability-linked loans are on the decline.

Why is it good?

Because the reason they’re on the decline is that greenwashing regulations around them are tightening up: it’s not so easy to obtain a green loan anymore. This means that the companies that get these loans are the ones who can evidence their sustainability objectives and show concrete targets and reporting practices.

This link between eco-friendliness and investor appeal generates new financial opportunities for businesses that are actively reducing carbon emissions and can show an audit trail.

2. Cost avoidance

One of the often-overlooked benefits of embracing sustainability is the significant potential for cost avoidance. Yes, you can prevent or avoid costs that would arise from non-compliance with environmental regulations by implementing sustainable practices. It’s more effective to prevent expenses or losses upfront than try to reduce them after the fact.

Non-compliance with carbon regulations can lead to hefty fines and operational headaches. In the EU alone, 50,000 companies are affected by the new corporate sustainability regulations that have recently come into place. By taking proactive steps to reduce and report on business carbon emissions, you can ensure regulatory compliance and reduce the risk of financial penalties and reputational damage.

CFOs and CEOs who take ESG and sustainability seriously are financially more resilient, reduce operational risks, and safeguard money for the company. Integrating sustainability into core business operations is an investment in long-term financial stability.

3. Consumer perception

But what about customer behaviour? Will the switch to sustainable products bring new customers and what would it do to current sales?

The shift to more sustainable practices is increasingly driven by customers rather than solely by business. Turns out people really do care about their future and the planet! Research shows that more people across all generations prefer to buy from sustainable brands and are even willing to pay extra for eco-friendly products.

Consumers today are socially conscious, gravitating towards brands that prioritise environmental responsibility. So what can brands and retailers do to remain profitable? It is simple – give customers what they ask for. But make sure you back up your claims with actual processes such as your supplier code of conduct and selection criteria.

By aligning your business with consumer values, you can build customer loyalty while also reducing your burden on the environment.

4. Supplier confidence

Doing sustainability right reassures suppliers that you’re thinking about the future and lowers the risk of doing business with you. Suppliers are more likely to partner with you, as they can see how your green credentials can be advantageous in procurement processes.

It’s also about sharing knowledge and guidance – you can build stronger partnerships with suppliers that don’t necessarily have the capacity to look at sustainability themselves.

Sustainability is no longer just a regulation – it’s a business and competitive imperative. Meeting this demand opens up new growth opportunities.

5. Business resilience and continuity

Climate change presents huge financial challenges for businesses worldwide. This is where the risk management aspect of sustainability comes in. By forward planning and assessing how climate events can disrupt your business, you can put precautions in place and have a fallback plan for when it happens.

The recent severe flooding in Dubai caused widespread disruption and businesses lost thousands as a result.

If businesses are prudent and plan how they can reduce their carbon emissions, we will eventually reach a critical mass of people doing the right things.

This is not just good for the environment but can help safeguard these very businesses from climate-related risks and ensure continuity.

By prioritising sustainability, you prioritise business resilience.

6. It boosts your reputation as an employer and corporate citizen

Let’s not forget that sustainability isn’t solely about profit – it’s about doing the right thing. The benefits are considerable: aligning your business goals with broader ethical principles boosts employee engagement and stakeholder trust.

7. Embedding sustainability

We talk to leaders in finance and sustainability and often hear them voice similar struggles – that they wish sustainability wasn’t relegated to the sidelines but became a focal point and a core strategy.

And we get it. There are so many projects that compete for the same budget, and when everything is urgent and important, work gets chaotic, and nothing ever gets done. Which is why focus and strategic alignment is so important.

We shared more in our five-step toolkit – a cheat-code that breaks down how to start your business sustainability journey.

Leaders need to align and give clarity on priorities. Only then can they embed sustainability at the core and let it shape business decision-making at every level.

It’s okay if sustainability feels overwhelming or unfamiliar at first. Everyone needs to start somewhere, even if the reason you begin is simply to comply with incoming laws. Being sustainable means being efficient as a business, which will bring in returns for years to come.

We understand the lack of time and capacity challenges of integrating sustainability into core business strategy.

If you’re unsure how to start or if you already have a carbon reduction plan but want to test its validity or effectiveness, we can help.

Contact us to learn how Green Ibex can empower your organisation to thrive in the decades ahead.

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