Decarbonisation as a Competitive Advantage: Why Carbon Accounting is Key to Business Growth

As the world shifts toward a low-carbon future, decarbonisation has moved from a nice-to-have to a business imperative. It’s no longer optional - whether for the planet’s health (and the business’ physical viability) or the licence for doing business. Decarbonisation is an action that businesses can no longer ignore.

But making decarbonisation progress requires more than just good intentions, it needs investment and data you can trust to back up every step. In this blog, we explore how decarbonisation is a strategic driver of growth and why embedding carbon accounting into your processes is key.

How decarbonisation can be a strategic driver of growth

Decarbonisation is often viewed through the lens of compliance and environmental responsibility, but it’s much more than that. For forward-thinking businesses, reducing emissions can be a powerful lever for growth, driving competitive advantage, cost savings, and new market opportunities. By integrating decarbonisation into their core business strategies, not only are businesses able to meet evolving stakeholder expectations and mitigate business risks, but they can also unlock value creation opportunities.

• Creating Competitive Advantage: Reducing emissions sets companies apart. It attracts investors, appeals to customers, and differentiates products in a market that increasingly values sustainability. Businesses that decarbonise can respond better to consumer demand, improve their brand, and even boost their market valuation.
• Financial and Operational Gains: Sustainable practices often lead to direct cost savings. Upgrading to energy-efficient technologies, minimising waste, and optimising processes all help cut operational costs.
• Accessing New Markets and Green Finance: Businesses with strong sustainability credentials can tap into green finance, qualify for incentives, and reach customers who prioritise sustainable products. Products with lower emissions are often more attractive and could lead to higher sales and the potential for a price premium.
• Meet Stakeholder Expectations: Investors, customers, and regulators are increasingly demanding accountability for environmental impact, making a business’ decarbonisation efforts a critical part of maintaining trust and reputation with stakeholder. Actively decarbonising shows a commitment to sustainability and will positioning the business favourably in a market that values transparency and accountability.

The Cost of Inaction?

If a business doesn’t work on decarbonisation initiatives, it risks being locked out of supply chains as partners are increasingly embedding sustainability requirements into their procurement contracts in order to meet their own decarbonisation targets.

Not only that, as consumer demand shifts toward eco-friendly products and services, businesses that don’t align with these values may see a decline in customer loyalty, sales, reduced market access, and a loss of brand value. These factors can ultimately affect the business’ bottom line, putting their long-term viability at risk.

What numbers do we need to map out the decarbonisation strategy?

Significant costs is often the perception that dissuades many companies from starting on their decarbonisation journey. It doesn’t have to be that way - once you dive into the numbers, you may find that the reality is quite different. Let’s start by understanding the numbers that matter most. 

1. Know Your Emissions Baseline

Measuring your emissions baseline is the first step in any decarbonisation journey. Your emissions baseline represents the total amount of greenhouse gases your business currently emits, including direct emissions from your operations (Scope 1), emissions from purchased energy (Scope 2), and those generated throughout your value chain (Scope 3).

Carbon Accounting is the process of measuring, managing, and reporting these emissions. It involves collecting data on all activities that contribute to your business’ emissions, following the GHG Protocol Standards to calculate emissions, and report on these numbers with a basis of preparation like you do with financials. As you go through this process to create an emissions baseline report, you’ll start to create a clear picture of where emissions come from, understand the areas of data limitations, and key areas of hotspots to focus on, all which provide the transparency needed to set realistic reduction targets and make informed decisions.

2. Understand the Investment Required

Real change requires cashflow to implement - whether it’s implementing new technologies, investing in renewable energy, or hiring experts, these efforts need clear financial backing. Too often, sustainability teams are left fighting for budget, especially when sustainability is still seen as a side project. 

This is where you need to build a Business Case. The strongest way to secure funding is by showing the numbers. Numbers like: 

• Current emissions number 
• Upfront investment of reduction initiative
• Cost of financing the investment
• Ongoing costs associated with the reduction initiative 
• Projected cost savings from efficiency improvements
• Impacts of grants, incentives and taxation
• Expected ROI 
• Cost per tonne of carbon reduced
• Payback periods for the investment

These help justify the investments, ensure resources are allocated wisely, and explains how the benefits of a project outweigh its costs - providing a compelling case to present to stakeholders on why it should be executed.

How do you prepare emission reduction strategies? Check out this guide

3. Engage with your suppliers for genuine Scope 3 reduction

A recent report by the Carbon Disclosure Project (CDP) and Boston Consulting Group (BCG) found engaging with suppliers was one of the three statistically significant factors that mattered in managing Scope 3 and for climate action. For most businesses, majority of their emissions come from Scope 3 (80-90%!). As you start asking suppliers for their emissions data, not all will respond as suppliers are at varying stages of their own sustainability journey as well. The response rate, the stage of the journey they are at, and what barriers might they face in providing emissions data or reducing their emissions and how many - these are all interesting numbers and data points that can be used to inform the next strategic approach.

Genuine engagement starts with education, if you’re keen to learn more check out our 4 steps best practice guide for supplier engagement.

Decarbonisation is a journey, and like any long-term strategy, it requires ongoing adaptation based on reliable data you can trust. That’s why robust carbon accounting is more than a compliance tick box - it’s the backbone of any impactful and financially viable decarbonisation strategy. Accurate data allows you to build strong business cases, assess the true ROI of initiatives, and make informed decisions that drive progress. By embedding carbon accounting into your processes, you equip your business with the insights needed to execute on the strategy.

It’s time to see decarbonisation for what it truly is: a strategic advantage that can help your business thrive.

Ready to get going with your decarbonisation journey? Start by getting the numbers right. We’d be happy to chat over a call or get started with a 30 day free trial here. 

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