A recent survey from BCG shows that while many companies are falling behind on their decarbonization commitments, those sticking with emissions reductions see tangible financial benefits. The survey, which polled some 1,864 executives across 16 industries and 26 countries found that:
“Just 9% said they comprehensively report Scope 1, 2, and 3 emissions. In addition, only 16% said they have set targets across all three scopes, while just 11% reported emissions reductions in line with their set ambitions. These statistics are all lower than those reported in 2023.”
However, the survey also found that:
“A leading source of financial benefits was a reduction in operating costs – often from efficiency initiatives, waste reduction, and renewable energy use… Climate leaders report approximately $200 million in net benefits from their decarbonization efforts.”
By reducing carbon emissions, companies are forced to take a closer look at their processes and energy usage. Cutting down on fossil fuels consumption often means cutting back on inefficient fossil fuels usage. This can result in stronger financial returns that pay for the costs associated with decarbonization. In fact the survey also reveals that:
“More than half of the companies surveyed reported that they believe their emissions can be reduced by 10% to 40% at a net cost savings.”
It’s no secret that sustainability faces headwinds and “it’s the right thing to do” isn’t always a winning argument in the boardroom. However, if sustainability professionals can point to real cost savings and operational improvements, the case for decarbonization is more compelling. The ESG business case is a cornerstone of an effective ESG strategy and finding tangible ways that ESG reduces inefficiencies and spurs innovation is central building that case.
Our members can learn more about building their ESG business case here.
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