Companies across industries are recognizing that reducing their environmental impact isn’t only about protecting the planet—it’s about staying competitive, cutting costs, and meeting the expectations of customers, investors, and regulators.
One essential tool in staying competitive during this shift is carbon accounting. This process involves recording and reporting your company’s carbon emissions, with the goal of reducing its environmental impact.
But why should businesses invest in carbon accounting? Let’s break it down and explore the benefits carbon accounting can bring to your business.
1. Staying Ahead of Regulations
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Government mandates on climate reporting are happening quickly all over the world. Australia, Brazil, Hong Kong, the European Union, and the State of California have all passed mandates requiring climate disclosure for businesses. Further, regulations in the UK, Canada, and the Security Exchange Commision (SEC) in the United States are in progress.
While reporting may not yet be required within your country, it is best to get prepared now as these regulations will certainly continue to come. Many countries have committed to becoming Net Zero by 2050, and climate reporting mandates have become a crucial tool in meeting these ambitious targets.
Carbon accounting is the best and easiest way to comply with these upcoming reporting requirements, and CarbonSuite’s Built-For-Netsuite SuiteApp makes carbon accounting simple, effective, and hassle-free.
For more information on voluntary and mandatory reporting requirements, see our Climate Disclosure Tracker.
2. Cutting Costs
A driving factor in any business-related decision is cost effectiveness. When used correctly, carbon accounting can be an incredibly useful tool in cutting costs within any organization. Whether it’s through saving on energy costs, reducing waste, or gaining access to financing and tax initiatives, carbon accounting is the perfect starting point in understanding where costs (and environmental impacts) can be reduced.
At CarbonSuite, our carbon accounting solution includes a materiality assessment, which looks at the areas within a business that are producing the most carbon emissions. This is based on the 80/20 rule: 80% of your emissions are coming from 20% of your sources.
But what does this mean for businesses?
This means that we can easily narrow down where to focus on reducing emissions, and therefore costs. Some common examples include: energy efficiency, supply chain optimization, improved resource planning, and access to green financing and tax incentives.
When companies measure their emissions, they often discover ways to use energy more efficiently and reduce waste. This leads to significant cost savings.
For Example:
Walmart used carbon accounting to identify inefficiencies in their supply chain. By improving their logistics and reducing fuel consumption, they saved millions of dollars and reduced their carbon footprint at the same time.
3. Attracting Investors and Stakeholders
Investors are increasingly looking at how sustainable companies are, and making investment decisions based on it. This push is driven by a variety of factors, including stakeholder activism, climate disclosure requirements, and the fact that sustainability is just good-for-business.
For Example:
Ørsted, a Danish renewable energy company, is a great example of how sustainability reporting can attract investors. Ørsted was once one of the most fossil-fuel-intensive energy companies in Europe, but transformed itself into a global leader in renewable energy, particularly in offshore wind.
This transformation, combined with detailed carbon accounting and carbon reduction targets, helped secure investments from funds such as BlackRock and Vanguard. These investments were specifically brought on by their 2022 Sustainability Report, where they showcased detailed carbon reductions and their commitment to green energy.
Carbon accounting provides transparency and shows that a business is serious about reducing its environmental impact.
4. Reducing Business Risks
Climate change can affect businesses in many ways—through resource shortages, supply chain disruptions, and even damage to a company’s reputation. Carbon accounting helps businesses understand these risks and take steps to minimize them.
For Example:
Apple uses carbon accounting to prepare for future challenges like material shortages or supply chain disruptions caused by extreme weather. By cutting emissions now, they are protecting themselves from these potential risks in the future.
5. Gaining a Competitive Edge
Consumers are paying more attention to a company’s environmental impact, and in some cases are even demanding change. Businesses that can show real progress in reducing emissions through transparency and climate reporting can gain a competitive advantage.
For Example:
Companies like Coca-Cola are responding to consumer pressure by reporting on carbon emissions and pledging to use more sustainable packaging. For example, Coca-Cola aims to collect and recycle a bottle or can for every one it sells by 2030, reflecting consumer preferences for environmentally friendly packaging.
6. Boosting Employee Engagement and Retention
Employees, especially younger ones, are increasingly passionate about working for companies that care about the environment. Carbon accounting allows businesses to show their commitment to sustainability, which can help with both employee engagement and retention.
For example:
CH4 Global is a company that helps lower the methane emissions produced by cattle through the production of seaweed.They were even reported as one of TIME’s Top Greentech Companies of 2024. This recognition boosts employee pride and loyalty, as workers are more likely to remain with a company that is well-respected for its sustainability efforts.
Companies focused on sustainability have stronger employee retention, and are more likely to attract top talent. CH4 Global has mastered this through their sustainable technology efforts in combination with their climate reporting in CarbonSuite – transparently showing their commitment to carbon reduction.
Conclusion
Carbon accounting isn’t just about measuring emissions—it’s about building a better, more sustainable business. Whether it’s cutting costs, attracting customers, or staying ahead of regulations, carbon accounting offers a wide range of benefits.
Major companies around the world have adopted sustainability reporting practices, and are even requiring it from their suppliers.
By adopting carbon accounting, businesses can not only reduce their environmental impact but also unlock new opportunities for growth and innovation. It’s the right move for any company looking to thrive in today’s sustainability-driven market.
Ready to see your company benefit from carbon accounting? Contact us today!