CO₂ Reduction: A Comprehensive Guide for Businesses
Yacin Bessas
12Min. reading time
Corporate Sustainability
Reducing CO2 emissions is essential for combating climate change. The latest IPCC report warns that without significant reductions in CO2, global warming is likely to exceed 2°C by the middle of the century. Companies can implement strategies such as using renewable energy, optimizing supply chains, offsetting CO2, reducing business travel, and promoting sustainable transportation.
Long-term approaches include employee training, forming "green teams," and aligning sustainable business models. Involving cross-functional teams and communicating with stakeholders is crucial. With these measures, companies can contribute to CO2 reduction, mitigate environmental risks, and foster a culture of sustainability.
Understanding the role of CO2 in climate change
The latest IPCC report from 2018 concludes that global warming will exceed 2 °C by mid-century if emissions remain at their currently high level or even increase. However, if CO2 emissions are reduced rapidly and reach net-zero by around 2070, while other greenhouse gases (like methane) must also decrease substantially, a global warming of 2 °C can be avoided with high confidence.
Globally, the number of weather extremes such as droughts, wildfires, tornadoes, and floods is on the rise as a result of climate change.
Impact of business activities on CO2 emissions
CO2 emissions arise in many different sectors: The energy sector alone is responsible for 73.2% of global greenhouse gas emissions (including activities like transportation and energy use in buildings and industry), followed by agriculture, forestry, and land use with 18.4% (including activities like deforestation and burning plants). The industry comes in third with 5.2%, including the chemical and cement industries. Waste, including wastewater and landfills, accounts for 3.2% of global greenhouse gas emissions. Innovations are needed across all sectors to achieve net-zero emissions.
What options do companies have to reduce their CO2 emissions?
1. Increasing energy efficiency
Most manufacturers often opt for cheaper machines and parts to minimize high acquisition costs, which can be more expensive in the long run. In most cases, cheaper machines and parts are made from lower-cost materials. This means they have a shorter lifespan than high-quality products, requiring more frequent replacements. This also generates more waste, which significantly impacts the environment.
Some machines and their components are powered by fossil fuels, which are among the largest contributors to climate change. By switching to equipment powered by renewable energy, you can save money in the long run and significantly reduce your carbon emissions.
An important means of lowering your energy costs and, thus, your carbon emissions is to use multitasking devices. These machines consolidate several operations traditionally performed by multiple machines into a single solution, such as cutting. This way, you can drastically reduce setup and production time because you can accomplish more at once.
One of the most common issues with energy waste in production facilities is leaks. It is advisable to conduct leakage control during necessary checks for the general maintenance of your facilities. This way, you can identify and fix leaks before they become a larger problem.
Regular inspection and maintenance of production facilities prevent energy waste and leaks before they become a major issue.
2. Utilizing renewable energy sources
Significant government incentives, increasingly sophisticated technologies, and reliable lithium-ion batteries encourage many companies to take steps toward reusing energy and generating power. In most cases, these initiatives contribute to lowering electricity bills. In other cases, they are so successful that they generate profits. This makes renewable energy a natural choice for any company looking to reduce CO2 and cut costs. As new technologies evolve and governments support more renewable energy initiatives, electricity generation and energy reuse become an attractive option.
Benefits and risks of self-generated power
Benefits:
Financial benefits
Reduction of your third-party costs (Note: your electricity bills encompass more than just the electricity you consume—approximately 60% of the total amount could actually come in the form of third-party costs)
You do not have to purchase electricity while keeping administrative costs at a minimum
You take on more responsibility
Control over your energy consumption and generation
Reduction of CO2 emissions >> smaller ecological footprint
Opportunity to sell your electricity as a source of income (e.g., through power purchase agreements (PPAs))
What is needed and what risks are there?:
Willingness to invest in the necessary infrastructure
Location of your operation and type of building(s)
Local planning authority
Weather-related limitations can make it challenging to generate all the needed electricity from solar energy without access to large areas
Need for an alternative power source to rely on
If you are considering generating your own power, you should also think about battery storage. This allows you to store excess self-generated energy and use it later when your company needs it.
Companies that source electricity from fossil fuels can significantly reduce their carbon footprint by switching to renewable energy sources—be it through changing to a green energy provider or by installing energy-efficient solar panels. This way, you can generate your electricity in an environmentally friendly and independent manner. At a consumption rate of 1,500 kWh per person (estimate for office employees), over 700 kg of CO2 per year can be saved by switching from the average electricity mix to renewable energy. For energy-intensive businesses, savings can quickly add up to many thousands of kilograms per year.
Companies that source their electricity from fossil fuels can significantly reduce their carbon footprint by switching to renewable energy sources.
3. Optimizing sustainable supply chains
You have started addressing the sustainability of your business practices and taking measures to reduce your CO2 emissions. But does this also apply to your supplying companies? If the companies from which you source your machines and raw materials are not sustainable, you may still be indirectly contributing to greenhouse gas emissions.
For many businesses, sustainability has now become an important requirement in their procurement processes; they review their suppliers for environmental friendliness. As studies show that customers are looking for environmentally friendly companies, proving sustainability is more important than ever for a brand.
Partnerships with local suppliers and service providers can benefit your company in many ways. In many cases, local companies can also provide a higher quality service and value than their external competitors, leading to a more stable supply chain for your business.
4. CO2 offset through investments in climate projects
CO2 offset is defined as "a climate action that allows individuals and organizations to compensate for emissions they cannot avoid by supporting eligible projects that reduce emissions elsewhere".
In other words, CO2 offset is a method by which a person or an organization can compensate for their CO2 emissions by funding approved projects that absorb or reduce CO2 emissions. There are various forms of CO2 offset. Just to name a few: collaboration with local communities in developing countries to promote the adoption of emission-reducing practices; reforestation (planting new trees) as well as preventing deforestation, and finally, creating renewable energy sources such as solar and wind energy.
Some airlines offer offset programs for flight passengers to have a direct impact from your business travel. Companies can offset their emissions by paying a premium for their flight to fund projects that reduce CO2 emissions. It is estimated that over 30% of passengers travel with an airline that offers some form of CO2 offset program.
Forms of CO2 offset include collaboration with local communities in developing countries, reforestation, as well as preventing deforestation and finally creating renewable energy sources such as solar and wind energy.
5. Reduce business travel
The simplest way to improve your company's CO2 balance is to reduce air travel. For short domestic distances, it is advisable to switch to train travel. Although this prolongs travel time, the journey is more stress-free, comfortable, and often even cheaper. Train stations are often located more centrally than airports, which facilitates arrival and departure. You can also opt for long-distance buses.
For intercontinental travel, a business flight generates two to three times as much CO2 as an economy flight. First-class seats even release up to six times as much CO2. Therefore, it is more environmentally friendly to fly in economy class on long-haul flights. Conferences and meetings can also be held online today via video conferencing. High-quality video conferencing equipment is a worthwhile investment, providing an alternative to traditional air travel and being more convenient for employees. This can also reduce hotel costs.
Developments in IT and communication technologies, as well as ongoing investments in the transportation network, make it easier to manage travel and vehicles more efficiently, find alternatives to travel, and utilize travel time productively. New approaches to risk management and driver training can improve safety, reduce stress, and save fuel; new vehicle technologies and fuels can contribute to reducing CO2. A sustainable business travel strategy brings these various solutions together and helps your business, among other things:
A sustainable business travel strategy encompasses various solutions and helps your company, among others, to:
reduce travel needs and improve operational performance
save time and money through more efficient travel policies and practices
reduce CO2 emissions that contribute to air quality and climate change
enhance your company's reputation, which can lead to a competitive advantage
Long-term strategies for CO2 reduction
1. Focus on training and raising awareness among employees
Employees play an important role in reducing the company's CO2 emissions in their daily business operations. To enforce sustainability in a company, various stakeholders must be involved. A company's stakeholders include investors, suppliers, customers, and ultimately the employees. To advocate for sustainability among external stakeholders, it is important to start with internal stakeholders, namely the employees. With the following steps, companies can encourage their employees to promote sustainability in the workplace.
Over 50% of employees would not work for a company that does not strongly commit to social or ecological issues. 75% of respondents indicate that they feel more fulfilled in their work when they have the opportunity to make a positive impact on social and environmental issues.
Building an environmentally conscious organization starts with the workforce, as it is important to practice eco-friendly habits in the office so that your employees believe in your vision and signal your sustainability mission accordingly.
How companies can engage, train, and raise awareness among their employees:
Define the long-term goal of the company: The first way to eliminate the conflict people may feel between their professional duties and personal values is undoubtedly to emphasize the long-term interests of the company that are more aligned with the well-being of society and the planet.
Form “green teams”: Green teams, also known as sustainable teams, are generally formed by employees working in different departments of the company. These individuals do not necessarily work in positions related to sustainability but are rather people who are generally passionate about sustainability and actively support the company’s environmental efforts. "Green teams" provide a space for employees to voice specific issues in their workplace and suggest more sustainable alternatives.
Benefits:
Cost savings
Corporate social responsibility
Improvement of quality of work life: attracting talent and reducing turnover
Cross-functional collaboration
Innovation culture in the company
Companies receive more and better ideas when they bubble up from the bottom. Employees believe that they play a crucial role, and ideas begin to flow as soon as they see the positive impacts and financial returns of the social and environmental investments they helped shape.
Creating knowledge about sustainability: To strengthen employees' belief and attitude that they can make a difference, it is important to invest in training employees about sustainability and to create systems and processes that make it easier for employees to incorporate sustainability into their business decisions. Many sustainability initiatives require specialized knowledge and expertise, such as discussions with suppliers about sustainable sourcing or using an eco-efficiency tool to assess a new product.
Making sustainability visible: Visibility and attention are key factors in changing people's beliefs and attitudes and influencing their behavior. People’s attention is directed to important sustainability indicators whenever progress is measured and communicated. People want to succeed in the dimensions that are measured. It should therefore come as no surprise that leading companies develop indicators to track the status of their sustainability agenda, sharing them with internal and external stakeholders.
Collaboratively developing and implementing a sustainability strategy within the team is essential for success.
Development of sustainable business models
To address the most pressing ecological and social challenges of our planet, companies must first implement a sustainability strategy aligned with the overall strategy of the business. Start by identifying the environmental risks to your business and then look for ways to mitigate those risks—along with opportunities to reduce costs or generate new revenue streams. In business, aligning with sustainable development can mean aligning individual behavior with the requirements of this overarching, globally or societally accepted concept of sustainable development.
76% of executives indicate that sustainability engagement contributes positively to shareholder value in the long term. Companies that proactively manage sustainability are more likely to seek and find value-creating opportunities.
At companies where sustainability is at the top of their CEOs' agendas, the likelihood of integrating sustainability into the business practices is twice as high compared to others. This suggests that leaders who want to leverage the benefits of integrating sustainability into their company’s overall strategy must take an active role in the efforts.
The first step to gaining recognition and improving the impact of sustainability activities may involve better communication with investors and other stakeholders.
Of course, it can be challenging to determine which sustainability initiatives make the most sense for your business. Find the initiatives that best align with your business model and the market characteristics of your industry.
It is also important to remember that sustainability is not an isolated effort considered only by the management team. Every sustainability plan must be adopted and implemented by cross-functional teams throughout the organization.
The development of a sustainability plan and program can be broken down into the following steps:
Identify the sustainability factors for your business.
Collect all potential green initiatives that are possible within your company.
Prioritize the most practical sustainability initiatives that are most meaningful and align with your strategic vision and goals.
Set goals and timelines that are specific and measurable.
Plan your sustainability initiatives and use formal program management to track progress and results.
FAQ
How can a company reduce CO2?
A company can reduce CO2 by implementing strategies such as using renewable energy, optimizing supply chains, offsetting CO2, reducing business travel, and promoting sustainable transportation to lower CO2 emissions, mitigate environmental risks, and foster a culture of sustainability.
Why should companies prioritize CO2 reduction?
Companies should prioritize CO2 reduction because global warming of 2°C is likely to be exceeded by mid-century without significant reductions. The latest IPCC report warns that global warming will exceed 2°C by mid-century if emissions remain at their current high level or even increase. Conversely, if CO2 emissions decrease rapidly and reach net zero by around 2070, while other greenhouse gases decrease significantly, a global warming of 2°C can be avoided with a degree of certainty. Therefore, it is crucial for companies to implement strategies such as using renewable energy, optimizing supply chains, offsetting CO2, reducing business travel, and promoting sustainable transportation to contribute to CO2 reduction, mitigate environmental risks, and foster a culture of sustainability.
What are the immediate benefits for companies that reduce CO2 emissions?
Immediate benefits for companies reducing their CO2 emissions include cost savings, social engagement, improved quality of work life, cross-functional collaboration, and a culture of innovation. Companies that proactively manage sustainability are much more likely to seek and find value-creating opportunities. Furthermore, the likelihood that companies with sustainability at the top of their CEOs' agendas will integrate sustainability into their business practices is twice as high as for other companies.
How can companies effectively transition to renewable energy sources?
Companies can effectively transition to renewable energy by either switching to a green energy provider or installing energy-efficient solar panels. This allows companies to generate their electricity in an environmentally friendly and independent manner. If considering battery storage for excess self-generated energy, it is worthwhile to think about it for use whenever the company needs power.
*For easier readability, we use the term CO2. However, we understand it in a broader sense, as "CO2 equivalents" or CO2e. CO2e is a metric used to measure the climate impact of all greenhouse gases by converting their emissions into an equivalent amount of carbon dioxide based on their global warming potential. In discussions regarding CO2 reduction in companies, it is generally better to use CO2e since it provides a more comprehensive picture of a company's total emissions by accounting for not just carbon dioxide but also other significant greenhouse gases like methane and nitrous oxide.
Sources
"6 Ways the Manufacturing Sector Can Reduce Carbon Emissions." EU Business News. Accessed June 2023. [Online]. Available: https://www.eubusinessnews.com/6-ways-the-manufacturing-sector-can-reduce-carbon-emissions/
"About Offsetting." United Nations Climate Neutral Now. Accessed June 2023. [Online]. Available: https://offset.climateneutralnow.org/aboutoffsetting
"Engaging Employees to Create a Sustainable Business." Stanford Social Innovation Review. Accessed June 2023. [Online]. Available: https://ssir.org/articles/entry/engaging_employees_to_create_a_sustainable_business#
"Greenhouse Gas Emissions by Sector." Our World in Data. Accessed June 2023. [Online]. Available: https://ourworldindata.org/ghg-emissions-by-sector#licence
"Making Sense of Generating Your Own Electricity." Business Green. Accessed June 2023. [Online]. Available: https://www.businessgreen.com/sponsored/3072274/making-sense-of-generating-your-own-electricity
"Renewable Energy Policies in a Time of Transition." International Renewable Energy Agency (IRENA), International Energy Agency (IEA), and REN21. Accessed April 2018. [Online]. Available: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_IEA_REN21_Policies_2018.pdf?rev=72587b606dc442bd8c8b4f74e0f4a574
"Summary for Policymakers." In: Global Warming of 1.5°C. Special Report of the Intergovernmental Panel on Climate Change. Accessed June 2022. [Online]. Available: https://www.ipcc.ch/site/assets/uploads/sites/2/2022/06/SR15_Full_Report_LR.pdf
"Sustainable Business Travel." Eltis – The Urban Mobility Observatory. Accessed June 2023. [Online]. Available: https://www.eltis.org/sites/default/files/trainingmaterials/sustainable-business-travel.pdf
"How close are we to 1.5 degC or 2 degC of global warming?" Marotzke, J., Milinski, S., D.Jones, C. Accessed June 2023. Available: https://pure.mpg.de/rest/items/item_3374874/component/file_3374876/content
"Three Steps to Building a Sustainability Plan That Produces Business Results." Forbes. Accessed August 2021. Available: https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2021/08/26/three-steps-to-building-a-sustainability-plan-that-produces-business-results/?sh=16f03c0f2c58
"Voluntary Carbon Offsetting." Aviation Benefits Beyond Borders. Accessed June 2023. Available: https://aviationbenefits.org/media/167226/fact-sheet_11_voluntary-carbon-offsetting_3.pdf
"How Companies Manage Sustainability: McKinsey Global Survey Results." McKinsey & Company. Accessed June 2023. Available: https://www.mckinsey.com/capabilities/sustainability/our-insights/how-companies-manage-sustainability-mckinsey-global-survey-results
Images: Unsplash.com
Reducing CO2 emissions is essential for combating climate change. The latest IPCC report warns that without significant reductions in CO2, global warming is likely to exceed 2°C by the middle of the century. Companies can implement strategies such as using renewable energy, optimizing supply chains, offsetting CO2, reducing business travel, and promoting sustainable transportation.
Long-term approaches include employee training, forming "green teams," and aligning sustainable business models. Involving cross-functional teams and communicating with stakeholders is crucial. With these measures, companies can contribute to CO2 reduction, mitigate environmental risks, and foster a culture of sustainability.
Understanding the role of CO2 in climate change
The latest IPCC report from 2018 concludes that global warming will exceed 2 °C by mid-century if emissions remain at their currently high level or even increase. However, if CO2 emissions are reduced rapidly and reach net-zero by around 2070, while other greenhouse gases (like methane) must also decrease substantially, a global warming of 2 °C can be avoided with high confidence.
Globally, the number of weather extremes such as droughts, wildfires, tornadoes, and floods is on the rise as a result of climate change.
Impact of business activities on CO2 emissions
CO2 emissions arise in many different sectors: The energy sector alone is responsible for 73.2% of global greenhouse gas emissions (including activities like transportation and energy use in buildings and industry), followed by agriculture, forestry, and land use with 18.4% (including activities like deforestation and burning plants). The industry comes in third with 5.2%, including the chemical and cement industries. Waste, including wastewater and landfills, accounts for 3.2% of global greenhouse gas emissions. Innovations are needed across all sectors to achieve net-zero emissions.
What options do companies have to reduce their CO2 emissions?
1. Increasing energy efficiency
Most manufacturers often opt for cheaper machines and parts to minimize high acquisition costs, which can be more expensive in the long run. In most cases, cheaper machines and parts are made from lower-cost materials. This means they have a shorter lifespan than high-quality products, requiring more frequent replacements. This also generates more waste, which significantly impacts the environment.
Some machines and their components are powered by fossil fuels, which are among the largest contributors to climate change. By switching to equipment powered by renewable energy, you can save money in the long run and significantly reduce your carbon emissions.
An important means of lowering your energy costs and, thus, your carbon emissions is to use multitasking devices. These machines consolidate several operations traditionally performed by multiple machines into a single solution, such as cutting. This way, you can drastically reduce setup and production time because you can accomplish more at once.
One of the most common issues with energy waste in production facilities is leaks. It is advisable to conduct leakage control during necessary checks for the general maintenance of your facilities. This way, you can identify and fix leaks before they become a larger problem.
Regular inspection and maintenance of production facilities prevent energy waste and leaks before they become a major issue.
2. Utilizing renewable energy sources
Significant government incentives, increasingly sophisticated technologies, and reliable lithium-ion batteries encourage many companies to take steps toward reusing energy and generating power. In most cases, these initiatives contribute to lowering electricity bills. In other cases, they are so successful that they generate profits. This makes renewable energy a natural choice for any company looking to reduce CO2 and cut costs. As new technologies evolve and governments support more renewable energy initiatives, electricity generation and energy reuse become an attractive option.
Benefits and risks of self-generated power
Benefits:
Financial benefits
Reduction of your third-party costs (Note: your electricity bills encompass more than just the electricity you consume—approximately 60% of the total amount could actually come in the form of third-party costs)
You do not have to purchase electricity while keeping administrative costs at a minimum
You take on more responsibility
Control over your energy consumption and generation
Reduction of CO2 emissions >> smaller ecological footprint
Opportunity to sell your electricity as a source of income (e.g., through power purchase agreements (PPAs))
What is needed and what risks are there?:
Willingness to invest in the necessary infrastructure
Location of your operation and type of building(s)
Local planning authority
Weather-related limitations can make it challenging to generate all the needed electricity from solar energy without access to large areas
Need for an alternative power source to rely on
If you are considering generating your own power, you should also think about battery storage. This allows you to store excess self-generated energy and use it later when your company needs it.
Companies that source electricity from fossil fuels can significantly reduce their carbon footprint by switching to renewable energy sources—be it through changing to a green energy provider or by installing energy-efficient solar panels. This way, you can generate your electricity in an environmentally friendly and independent manner. At a consumption rate of 1,500 kWh per person (estimate for office employees), over 700 kg of CO2 per year can be saved by switching from the average electricity mix to renewable energy. For energy-intensive businesses, savings can quickly add up to many thousands of kilograms per year.
Companies that source their electricity from fossil fuels can significantly reduce their carbon footprint by switching to renewable energy sources.
3. Optimizing sustainable supply chains
You have started addressing the sustainability of your business practices and taking measures to reduce your CO2 emissions. But does this also apply to your supplying companies? If the companies from which you source your machines and raw materials are not sustainable, you may still be indirectly contributing to greenhouse gas emissions.
For many businesses, sustainability has now become an important requirement in their procurement processes; they review their suppliers for environmental friendliness. As studies show that customers are looking for environmentally friendly companies, proving sustainability is more important than ever for a brand.
Partnerships with local suppliers and service providers can benefit your company in many ways. In many cases, local companies can also provide a higher quality service and value than their external competitors, leading to a more stable supply chain for your business.
4. CO2 offset through investments in climate projects
CO2 offset is defined as "a climate action that allows individuals and organizations to compensate for emissions they cannot avoid by supporting eligible projects that reduce emissions elsewhere".
In other words, CO2 offset is a method by which a person or an organization can compensate for their CO2 emissions by funding approved projects that absorb or reduce CO2 emissions. There are various forms of CO2 offset. Just to name a few: collaboration with local communities in developing countries to promote the adoption of emission-reducing practices; reforestation (planting new trees) as well as preventing deforestation, and finally, creating renewable energy sources such as solar and wind energy.
Some airlines offer offset programs for flight passengers to have a direct impact from your business travel. Companies can offset their emissions by paying a premium for their flight to fund projects that reduce CO2 emissions. It is estimated that over 30% of passengers travel with an airline that offers some form of CO2 offset program.
Forms of CO2 offset include collaboration with local communities in developing countries, reforestation, as well as preventing deforestation and finally creating renewable energy sources such as solar and wind energy.
5. Reduce business travel
The simplest way to improve your company's CO2 balance is to reduce air travel. For short domestic distances, it is advisable to switch to train travel. Although this prolongs travel time, the journey is more stress-free, comfortable, and often even cheaper. Train stations are often located more centrally than airports, which facilitates arrival and departure. You can also opt for long-distance buses.
For intercontinental travel, a business flight generates two to three times as much CO2 as an economy flight. First-class seats even release up to six times as much CO2. Therefore, it is more environmentally friendly to fly in economy class on long-haul flights. Conferences and meetings can also be held online today via video conferencing. High-quality video conferencing equipment is a worthwhile investment, providing an alternative to traditional air travel and being more convenient for employees. This can also reduce hotel costs.
Developments in IT and communication technologies, as well as ongoing investments in the transportation network, make it easier to manage travel and vehicles more efficiently, find alternatives to travel, and utilize travel time productively. New approaches to risk management and driver training can improve safety, reduce stress, and save fuel; new vehicle technologies and fuels can contribute to reducing CO2. A sustainable business travel strategy brings these various solutions together and helps your business, among other things:
A sustainable business travel strategy encompasses various solutions and helps your company, among others, to:
reduce travel needs and improve operational performance
save time and money through more efficient travel policies and practices
reduce CO2 emissions that contribute to air quality and climate change
enhance your company's reputation, which can lead to a competitive advantage
Long-term strategies for CO2 reduction
1. Focus on training and raising awareness among employees
Employees play an important role in reducing the company's CO2 emissions in their daily business operations. To enforce sustainability in a company, various stakeholders must be involved. A company's stakeholders include investors, suppliers, customers, and ultimately the employees. To advocate for sustainability among external stakeholders, it is important to start with internal stakeholders, namely the employees. With the following steps, companies can encourage their employees to promote sustainability in the workplace.
Over 50% of employees would not work for a company that does not strongly commit to social or ecological issues. 75% of respondents indicate that they feel more fulfilled in their work when they have the opportunity to make a positive impact on social and environmental issues.
Building an environmentally conscious organization starts with the workforce, as it is important to practice eco-friendly habits in the office so that your employees believe in your vision and signal your sustainability mission accordingly.
How companies can engage, train, and raise awareness among their employees:
Define the long-term goal of the company: The first way to eliminate the conflict people may feel between their professional duties and personal values is undoubtedly to emphasize the long-term interests of the company that are more aligned with the well-being of society and the planet.
Form “green teams”: Green teams, also known as sustainable teams, are generally formed by employees working in different departments of the company. These individuals do not necessarily work in positions related to sustainability but are rather people who are generally passionate about sustainability and actively support the company’s environmental efforts. "Green teams" provide a space for employees to voice specific issues in their workplace and suggest more sustainable alternatives.
Benefits:
Cost savings
Corporate social responsibility
Improvement of quality of work life: attracting talent and reducing turnover
Cross-functional collaboration
Innovation culture in the company
Companies receive more and better ideas when they bubble up from the bottom. Employees believe that they play a crucial role, and ideas begin to flow as soon as they see the positive impacts and financial returns of the social and environmental investments they helped shape.
Creating knowledge about sustainability: To strengthen employees' belief and attitude that they can make a difference, it is important to invest in training employees about sustainability and to create systems and processes that make it easier for employees to incorporate sustainability into their business decisions. Many sustainability initiatives require specialized knowledge and expertise, such as discussions with suppliers about sustainable sourcing or using an eco-efficiency tool to assess a new product.
Making sustainability visible: Visibility and attention are key factors in changing people's beliefs and attitudes and influencing their behavior. People’s attention is directed to important sustainability indicators whenever progress is measured and communicated. People want to succeed in the dimensions that are measured. It should therefore come as no surprise that leading companies develop indicators to track the status of their sustainability agenda, sharing them with internal and external stakeholders.
Collaboratively developing and implementing a sustainability strategy within the team is essential for success.
Development of sustainable business models
To address the most pressing ecological and social challenges of our planet, companies must first implement a sustainability strategy aligned with the overall strategy of the business. Start by identifying the environmental risks to your business and then look for ways to mitigate those risks—along with opportunities to reduce costs or generate new revenue streams. In business, aligning with sustainable development can mean aligning individual behavior with the requirements of this overarching, globally or societally accepted concept of sustainable development.
76% of executives indicate that sustainability engagement contributes positively to shareholder value in the long term. Companies that proactively manage sustainability are more likely to seek and find value-creating opportunities.
At companies where sustainability is at the top of their CEOs' agendas, the likelihood of integrating sustainability into the business practices is twice as high compared to others. This suggests that leaders who want to leverage the benefits of integrating sustainability into their company’s overall strategy must take an active role in the efforts.
The first step to gaining recognition and improving the impact of sustainability activities may involve better communication with investors and other stakeholders.
Of course, it can be challenging to determine which sustainability initiatives make the most sense for your business. Find the initiatives that best align with your business model and the market characteristics of your industry.
It is also important to remember that sustainability is not an isolated effort considered only by the management team. Every sustainability plan must be adopted and implemented by cross-functional teams throughout the organization.
The development of a sustainability plan and program can be broken down into the following steps:
Identify the sustainability factors for your business.
Collect all potential green initiatives that are possible within your company.
Prioritize the most practical sustainability initiatives that are most meaningful and align with your strategic vision and goals.
Set goals and timelines that are specific and measurable.
Plan your sustainability initiatives and use formal program management to track progress and results.
FAQ
How can a company reduce CO2?
A company can reduce CO2 by implementing strategies such as using renewable energy, optimizing supply chains, offsetting CO2, reducing business travel, and promoting sustainable transportation to lower CO2 emissions, mitigate environmental risks, and foster a culture of sustainability.
Why should companies prioritize CO2 reduction?
Companies should prioritize CO2 reduction because global warming of 2°C is likely to be exceeded by mid-century without significant reductions. The latest IPCC report warns that global warming will exceed 2°C by mid-century if emissions remain at their current high level or even increase. Conversely, if CO2 emissions decrease rapidly and reach net zero by around 2070, while other greenhouse gases decrease significantly, a global warming of 2°C can be avoided with a degree of certainty. Therefore, it is crucial for companies to implement strategies such as using renewable energy, optimizing supply chains, offsetting CO2, reducing business travel, and promoting sustainable transportation to contribute to CO2 reduction, mitigate environmental risks, and foster a culture of sustainability.
What are the immediate benefits for companies that reduce CO2 emissions?
Immediate benefits for companies reducing their CO2 emissions include cost savings, social engagement, improved quality of work life, cross-functional collaboration, and a culture of innovation. Companies that proactively manage sustainability are much more likely to seek and find value-creating opportunities. Furthermore, the likelihood that companies with sustainability at the top of their CEOs' agendas will integrate sustainability into their business practices is twice as high as for other companies.
How can companies effectively transition to renewable energy sources?
Companies can effectively transition to renewable energy by either switching to a green energy provider or installing energy-efficient solar panels. This allows companies to generate their electricity in an environmentally friendly and independent manner. If considering battery storage for excess self-generated energy, it is worthwhile to think about it for use whenever the company needs power.
*For easier readability, we use the term CO2. However, we understand it in a broader sense, as "CO2 equivalents" or CO2e. CO2e is a metric used to measure the climate impact of all greenhouse gases by converting their emissions into an equivalent amount of carbon dioxide based on their global warming potential. In discussions regarding CO2 reduction in companies, it is generally better to use CO2e since it provides a more comprehensive picture of a company's total emissions by accounting for not just carbon dioxide but also other significant greenhouse gases like methane and nitrous oxide.
Sources
"6 Ways the Manufacturing Sector Can Reduce Carbon Emissions." EU Business News. Accessed June 2023. [Online]. Available: https://www.eubusinessnews.com/6-ways-the-manufacturing-sector-can-reduce-carbon-emissions/
"About Offsetting." United Nations Climate Neutral Now. Accessed June 2023. [Online]. Available: https://offset.climateneutralnow.org/aboutoffsetting
"Engaging Employees to Create a Sustainable Business." Stanford Social Innovation Review. Accessed June 2023. [Online]. Available: https://ssir.org/articles/entry/engaging_employees_to_create_a_sustainable_business#
"Greenhouse Gas Emissions by Sector." Our World in Data. Accessed June 2023. [Online]. Available: https://ourworldindata.org/ghg-emissions-by-sector#licence
"Making Sense of Generating Your Own Electricity." Business Green. Accessed June 2023. [Online]. Available: https://www.businessgreen.com/sponsored/3072274/making-sense-of-generating-your-own-electricity
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