Many businesses are waking up to the fact that our climate is changing. Research shows that an increasing number of companies and investors are taking the initiative by adopting emissions-reduction goals to avoid the worst effects of change in the climate. These efforts are beneficial not only to the environment but can be beneficial to a company’s bottom line.
The transition to a low-carbon economy is both an immense opportunity and a big challenge. The commercialization of low-carbon solutions, such as clean energy technologies, presents a chance to further stimulate a major rising industry and promote the global energy sector’s transition.
Simultaneously, given the huge capital required to shift economies that have been relied on a predominantly fossil-fuel-based energy system, this transformation poses an enormous challenge. However, the government is helping businesses to overcome this challenge.
For instance, the European Regional Development Fund is supporting the Low Carbon Across the South and East (LoCASE) program which provides a free business support program to assist your company in being more competitive and profitable while also conserving the environment and promoting low-carbon alternatives.
Now let’s learn various ways how companies can take advantage of low-carbon growth.
Adopting Circular Economy Business Model Saves Cost
Circular economy business strategies are designed to keep products and materials in use for as long as possible to get the most value out of them. Businesses can gain a competitive advantage and gain from the enhanced economic productivity that “circular” business models provide.
Revenues from sharing economy or circular-based creative company models are predicted to increase from $14 billion in 2014 to $335 billion by 2025.
Approaches based on the circular economy can provide more value in the long run. Companies might, for example, participate in the worldwide plastic recycling market, because this market is expected to develop at a rate of 6.5 percent per year from 2017 to 2023.
Builds A Great Reputation In The Market
When a company goes green, it gives customers the impression that it is a reliable company. According to a survey, people are willing to pay more for products made from sustainable sources. Green companies show that sustainability is an integral element of their mission and culture.
The most valuable type of advertising is word-of-mouth, and green firms cannot buy that kind of PR. This not only expands a firm’s existing market base but also strengthens it.
Change In Investment Practices
Additional policies can be implemented by businesses to prepare for the transition to a low-carbon economy. Almost 1,400 major firms have vowed to “future-proof” their investments by using “shadow internal carbon pricing.”
Mahindra & Mahindra Ltd., an Indian automotive and farm equipment company, used its internal carbon-free program to accelerate the adoption of LED lighting (which uses less energy and thus emits less carbon) for its vehicles and manufacturing facilities, resulting in increased energy savings and competitive advantage.
Enhances Employee Morale
Going green isn’t just good for the environment; it’s also good for business. Working for a green company makes employees feel safer. Employee participation in company-wide green programs improves morale.
Employees have the impression that their health is taken care of. Also, workers don’t want to leave a place that makes them feel like they are part of a caring work community, so this is an excellent strategy to limit turnover.
Overall Better Performance
The foregoing benefits in terms of lower costs, improved governance, and new markets are expected to contribute to improved overall performance. In fact, according to a 2015 survey by Thomson Reuters, companies with better sustainability characteristics beat their rivals in terms of stock market valuation and financial performance.
Improving a company’s environmental performance can lead to improved or comparable economic or financial performance without increasing costs.
Change In Consumer Pattern
Businesses can utilize their marketing clout to sway consumer behavior toward a more sustainable, low-consumption path. By tailoring their brand to products and behaviors that help cut emissions, companies, particularly consumer-facing ones, can engage consumers as active agents of the solution.
Companies are becoming aware of this and are beginning to establish business models focused on lifespan and reuse rather than quick, environmentally unsustainable consumption. For instance, rent the Runway is an online apparel rental service that allows customers to rent rather than buy clothing.
Companies in the CDP Climate Leadership Index outperform their peers in terms of stock market valuation and financial performance because they are adopting the most aggressive climate action. In conclusion, we can say that the private sector may reap large economic gains from the transition to a low-carbon economy.
