The Climate Of Business #111: How to turn sustainability and decarbonisation efforts into ROI for a business?
Lubomila Jordanova
CEO & Founder Plan A & Co-Founder Greentech Alliance │ Obama Leader │ MIT Under 35 Innovator │ LinkedIn Top Voice
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This week’s newsletter is a deep dive into the explicit relationship between two pivotal terms that carry significant weight within the sphere of sustainable business practices: decarbonisation and return on investment (ROI). At its essence, decarbonisation , as outlined by Plan A, entails the decrease or elimination of human-generated carbon emissions in the atmosphere.
This necessitates stringent actions to mitigate carbon emissions stemming from an organisation's operations. It's important to distinguish decarbonisation from climate neutrality, which can be achieved solely through the acquisition of carbon credits. Decarbonisation is focused on achieving authentic reductions in both absolute carbon emissions and intensity.?
The business case for decarbonisation
Decarbonisation is this century's opportunity for businesses. In an era where climate change is irrefutable, understanding the ROI of decarbonisation is more than an environmental necessity; it's a cornerstone for competitive advantage and business resilience.
With the market for decarbonisation accelerating rapidly, companies that adopt holistic and genuine decarbonisation strategies are not only staying compliant and mitigating risks but also unlocking new avenues for value creation and financial growth. As highlighted within Plan A’s comprehensive return on investment (ROI) of decarbonisation whitepaper , a few further benefits include:?
Decarbonisation’s market potential
The financial implications are equally noteworthy. The global decarbonisation market is set for remarkable expansion, with projections indicating a Compound Annual Growth Rate (CAGR) of 12.7% from 2021 to 2026. By 2032, it is anticipated to achieve multi-billion-dollar valuations, experiencing an even more pronounced CAGR of 14.27% from 2022 to 2032. Fueled by the urgent challenges posed by climate change and situated within the broader framework of Environmental, Social, and Governance (ESG) considerations, businesses are directing their focus towards decarbonisation.?
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As sustainability becomes intricately woven into digital transformation strategies, a fresh corporate mindset is taking shape — one that perceives sustainability as both a lucrative business opportunity and a crucial risk mitigation strategy. However, businesses who wish to gain a competitive edge must ensure they are adequately equipped with the knowledge and skills to explore such a burgeoning market for decarbonisation, enabling them to uncover how to leverage this trend to maximise ROI.
Transitioning to a decarbonised future
A number of practical strategies that business must integrate into the DNA of their business to ensure a seamless transition towards a decarbonised model include:
Future outlook
While many companies traditionally used carbon compensation as a method to mitigate their emissions, the landscape is quickly evolving. The carbon-offset market, which encompasses various credits including reduction, avoidance, and removal of emissions, is anticipated to expand from $2 billion in 2022 to a staggering $250 billion by 2050 .
This growth is not just due to the volume of offsets but also a shift in the type of projects supported. For instance, while the majority of the current market (82%) focuses on avoiding or reducing future emissions, like those from renewable energy projects or conservation efforts, there’s an anticipated shift towards removal credits, which ameliorate past emissions through actions such as tree planting or carbon capture from industrial processes.
Plan A, your best partner for decarbonisation
Embark on your decarbonisation journey with Plan A as your steadfast companion. Plan A’s commitment to fostering sustainability and our in-depth comprehension of market dynamics position us as your quintessential partner. Whether you are at the onset of your journey or aiming to refine your existing initiatives, Plan A offers bespoke solutions designed to meet your distinctive needs and optimise your decarbonisation ROI.
Carbon Price
Head of Marketing & Business Development, Cambridge Business Sustainability Management Alumni, Climate Fresk
9 个月Very interesting read.
SUPER-CHARGE NETZERO. Achieve Break-Through Moments. @NetZeroMAP.org @ClimateEarthConsulting.com??Coaching Parents & Kids INNER DEVELOPMENT: Relationship to Self Earth & Each Other @PeopleClimateEarth.com??
9 个月https://theclimatecoaches.com This peer-review published psychology tool we developed for leadership teams uses Inner Development Goals to help people tap into our feelings around climate & sustainability, the degree of behaviour change required, and blocks we all need to confront to accept reality and move forward gracefully, with ROI in mind. And its FUN!
So insightful. It's unfortunately how we have to make the clear and true argument that sustainability is good for business – when the fate of our planet should be reason enough. Regardless, this argument needs to be made to ensure action is taken in the business world. Thanks for sharing Lubomila Jordanova
Strategies for sustainability beyond ‘no harm’ ?? Follow for daily insights and cases each Friday → Sustainability strategies that respect social and planetary boundaries. Speaker, Author & Founder.
9 个月All sustainability actions should be an integrated part of the business model.
Director of Customer Success | Global Customer Leader | Enterprise Customer Onboarding | AI | CRM | Fortune 500 | SaaS | B2B | EU Citizen
10 个月It's inspiring to see strategies that not only contribute to climate action but also result in tangible returns on investment. The emphasis on innovative approaches and collaboration showcases a promising path for businesses to align profit motives with the imperative of environmental responsibility. Lubomila Jordanova great article, thanks for sharing!