One of the biggest challenges we face in the 21st century is climate change. And CO2 is its currency
There is no doubt that climate change is one of the biggest challenges humans face in the 21st century. Its impacts are not only environmental but also economical, as new regulations put pressure on reducing greenhouse emissions. The current EU legislation aims to reduce emissions by 41% in 2030 (compared to 1990), for example. Countries that fail to meet their targets have to buy emission allocations from other members, and a similar method applies to business.
CO2 then comes at a high price.
CO2 Is the New Currency of the 21st Century
As we transition toward a clean energy future, we already see how it impacts almost every aspect of companies’ assets and operations. With climate change awareness also comes business opportunities. CO2 has become a currency as companies invest in carbon offset schemes or buy carbon credits to reduce their global emissions. Although there are many other solutions, including software such as the Environmental Intelligence System to monitor and minimise supply emissions.
Top Drivers of Decarbonization:
Decarbonization is becoming a competitive advantage. Four points are driving this process further:
#1: Customer, Employee and Community Demands
The rise of climate change and environmental awareness means that sustainability is now mandatory for businesses. The demand comes from customers, employees and communities that will only put their money where there is a clear commitment to the environment. They might boycott companies that don’t comply.
Operating sustainably is not only a competitive advantage but now also the basis of economic activity.
#2 Investor Pressure
“Stocks are bought because investors think that companies can tackle the new business, social and ecological challenges and quickly adapt their business model,” said the value-oriented asset manager and CEO of Globalance Bank, Reto Ringger, in an interview with Forbes.
There might also be some external investors’ pressure to reduce CO2 emissions as the carbon footprint becomes a key figure with this new currency. Then, sustainability is measurable and an essential asset for businesses to have.
#3 Policy and Government Targets
As mentioned above, companies have to comply with government targets, and failure to do so might involve fines. The new EU-wide fleet target, for example, limits CO2 emissions by combustion-engine vehicles to 95g/km (per car). If manufacturers don’t comply, the price is 95 EUR per gram. Especially for companies with Scope 3 emissions (i.e. supply chain), it is crucial to monitor and optimize these emissions to improve their overall offset.
#4 Technology and Operational Cost Reduction
One of the more efficient frontiers of reducing carbon emissions lies in how technology can offer data-based solutions to drive an efficient cost reduction in operations. Some pioneers of the green future are already doing that.For Christian Heinrich, founder at carbmee, software is the key to success: “It is necessary to analyze the emission impact drivers based on consolidated data and track the carbon reduction performance in a workflow-based-system in order to achieve the net zero targets”.
Like this, carbon reduction is integrated into business decisions and make carbon emissions completely transparent along the whole supply chain.
Robin Spickers, also a founder at carbmee, points to the fact that “a company’s investment in good climate management also means higher profits”. It increases the team’s efficiency, plus saves the cost of carbon offsetting or penalties.
The lack of climate action will be a high price to pay, and no company can afford to stay behind. Ready to know more about how technology can improve CO2 emissions? Find out more about carbmee.
Picture: The Founders of carbmee Robin Spickers and Christian Heinrich