Can tracking your organisations carbon footprint improve the bottom line?
Measuring emissions is good for business - Created by Image Creator from Designer using DALL-E 3
ESG reporting and particularly carbon emissions reporting is a topic which has grown in popularity over the past 5-years. Whilst the most publicised events around this are the annual COP Summits where governments are challenged to make changes, the biggest push has undoubtedly been the change in public sentiment. This may feel to you like a 'big business problem' but in fact, it is swiftly becoming everyone's issue. There are mounting pressures to do something about demonstrating your ESG agenda, particularly how you are lowering your carbon footprint. So the big questions is: Is starting to report on Carbon Emissions worth it for your organisation?
Google Search Trends data for the search term: "ESG Reporting" globally over the past 5 years
I have had the opportunity to talk to organisations large and small on this topic and the sentiment wavers from: "I see benefits in reporting my carbon footprint.", to "We have to report it. It's a regulatory requirement.", to "Why would I waste my time doing that?" Having come from a background of empowering operational teams with data and digitalisation, these conversations can be frustrating. The frustrating part is not just that I feel everyone should be concerned about their carbon footprint, it is that I see the ever-increasing ESG agenda as a real opportunity to improve financial sustainability as well as environmental. Let me explain.
If I am a 100-person business that provides plumbing services, my margins will fluctuate, I have to deal with constant emergencies, staff turnover and problems all over the place. The last thing on my mind is tracking my carbon footprint. However, if I did want to track my carbon footprint, I'd start by looking at the big emissions items: electricity usage, fuel in my fleet vehicles, wastage of materials and reviewing the types of services installed for customers. As I start to track and address each of these, I see an interesting trend:
I start to lower the electricity usage in my office, which lowers my power bills.
I start to track how much fuel each vehicle uses; I spot fleet vehicle abusers and decrease my fuel bill.
I start to track materials wastage, I create greater reuse and have to buy less stock, decreasing my bill of materials cost.
I start to talk to customers about more sustainable solutions, my margin per job goes up.
All of these things have lowered my carbon footprint and also improved my margins.
"Ah ha, but I’m a services business, none of this applies to me!"
Doesn't it? You require electricity to do your job, the computers that you buy might go to landfill, how you go to and from a client creates emissions, your offerings are not heavily differentiated from others in the market and this makes every deal a true fight.
Imagine if you can show a potential client that your business is actively making a difference - you've created a differentiator.
Imagine if you can sell the customer a service that helps them make similar changes - you've created another differentiator.
Imagine if you gamify commuting carbon footprints and this transparent positive impact reduces your carbon footprint AND improves staff retention.
Imagine if you change the IT hardware you buy to a line that is sent to be reused elsewhere in the world or is recycled for parts/made of recyclable materials.
All of these make you a better organisation, and yet all you were doing is tracking your carbon footprint.
Whether you are part of an ESG reporting function in a larger organisation with regulatory reporting requirements or a small/mid-sized business who wants to demonstrate positive contributions, remember that tracking and reporting carbon emissions should also be good for business. It brings transparency to your processes, gives you options to make changes under the positive notion of improving the environment, and adds an extra value proposition to that initiative of reporting operational performance.
If you are now convinced that measuring your carbon footprint could positively impact your organisation's operations, the next question is: how? Whether you are a small cafe or a large enterprise, Component6 offers tailored solutions to streamline carbon footprint reporting and help you drive sustainable practices.
Remember, investing in sustainability is not just good for the environment—it's good for business.
Get in touch with us today to start the conversation: dan.hookham@component6.com or check out our solutions on www.component6.com/sustainability
