Carbon Reduction Has a Positive Impact on Company Valuations

Climate change is a problem we are constantly faced with. With regulatory bodies across the world now swinging into action to curb the dangers of carbon emission, it has now become a collective duty to protect the planet. Businesses and corporations were previously indifferent on the matter. But with the increasing awareness of the potential and already apparent environmental impacts of carbon emission has entered the public discourse. Considering the public interest in the matter corporations can now use carbon reduction to both help the planet and increase valuations.

Corporations once saw and championed climate change as a social responsibility to ‘remain woke’. But carbon emission has remained a business problem with consequences to consider—now that greenhouse emission is constantly scrutinized and highly-priced. Carbon makes up 65% of all greenhouse emissions, which has an adverse impact on the ecosystem. Reduce your carbon output can have both a positive effect on the environment and your business.

According to Bank of America, businesses in the industrial, energy, and utility sector generate an enormous 70% of direct and indirect carbon emissions. According to a report, if the current trend of emissions persists, we would be generating 43.08 billion metric tons in 2050.

It is no longer surprising to see companies supporting the cause for net-zero, and pledging to reduce their carbon emissions. While this may be seen as a marketing strategy to lure the best clients and get the juiciest deals.

But the reality is that this is not the case. Investors now want to invest in corporations that care about climate change and are doing something about their emissions. It is not surprising that businesses that have pledged to eradicate carbon emissions are being supported by stakeholders and consumers alike.

Some of the benefits to reducing your business’ carbon footprint include:

Improved Air Quality

As we constantly pollute the air with fumes, air quality can worsen. The Paris Agreement already postulates that if nothing is done about air pollution, the quality of air will get worse over a given period.

The potential of this happening is unimaginable. This means less access to public spaces and outdoor parks. It can also cause huge damage to clean water and land, threatening our way of life.

When business lowers their emissions, the reverse is the case. We are going to experience an increase in air quality—which will improve health generally.

Slower Climate Change

This is not rocket science. When corporations limit their greenhouse emissions, we are bound to notice a slow down climate change. We can trace climate change as the major reason behind rising sea levels, forest fires, and increased droughts.

Thus, lowering the carbon footprint of your business contributes towards the reduction of these environmental impacts.

Cost Savings

Every month, a huge chunk of your expenses goes into energy bills. For some companies, this is constant. Investing in renewable energy lowers the energy consumption of your business. This lowers your energy expenses.

Thus, from the budgeting side of things, limiting carbon emissions does have advantages for business owners.

Recruiting and Retaining Top Talents

A key ingredient in business longevity is employing the best minds. There is a silent battle ongoing between businesses to attract and retain productive employees. According to a report, Millennials are going to make up 75% of the workforce by 2025. Noticeably, millennials are looking for work for employers that are environmentally responsible.

A study has revealed that 64% of millennials will not work for any business that is not CSR-compliant. The same goes for Gen Z employees who prioritize sense of purpose over salaries and benefits.

When your business is sustainable, you are likely to attract top talents to your firm. And that is a bragging right that boosts company reputation.

Deepened Relations with Consumers and Stakeholders

Apart from being staffed with the best people, your business is bound to strengthen trust with investors and end consumers if it is focused on sustainability. These days, no one wants to invest in any business that is not concerned about protecting the planet.

In fact, 74% of consumers are willing to pay more for sustainable packaging or a business that uses part of their proceeds to champion sustainability.

Carbon reduction is a key ingredient in converting and retaining your esteemed stakeholders and consumers.

Carbon Reduction can Increase Valuations

One of the most recent advantages of reducing your business’ emissions is that it can positively effect the value of your company. That is why your business should look to become ESG compliant. And our partner Edenark Group is here to help.

It is an SEC-approved organization that organizes a sustainability program called the Edenark Group ISO 140001. With this certification, your business will not only attract the best investors but maximize profits while lowering expenses.

 A certification like this will give you the much-needed advantage that will boost your company’s valuations. Choices like carbon reduction can go from being potentially costly decisions to increased valuations for your company, especially when you use ESG as a Competitive Advantage.