The opportunities are real — how a net zero strategy can help your business grow

 

When you think of all the risks and opportunities facing your business today, the idea of net zero may seem far removed or unrelated to your day-to-day operations — a passing trend or something that only much larger companies need to worry about.

 

Yet the transition to a net zero economy by 2050 — in which the amount of greenhouse gases produced will equal the amount removed from the atmosphere — is already underway. And it’s going to affect just about every company. How you respond could influence your ability to maintain and strengthen existing and new key business relationships within your supply chain and beyond, attract the best employees and customers, stay ahead of evolving regulations, and more.

 

In other words, beyond the environmental benefits, there are compelling business reasons your company should be developing and implementing a net zero strategy now. While some of your competitors may be slow to embrace the change that’s underway, there are a number of no-regret steps your company can take so that net zero pays off for your business in the years ahead.  

 

1. Protect your place in the supply chain and gain market share

 

What you should know: Already, nearly 90% of global emissions are now covered under a national net-zero target,^[1] and more than a third of companies worldwide have set emissions reduction targets, according to the 2021 S&P Global Corporate Sustainability Assessment.^[2] Many are assessing not just their own operations, but companies across their supply chains. If they haven’t already, chances are that companies you depend on for your business will soon be requiring you to meet similar targets.

 

Your next steps: Be proactive. Ask the companies you work with about their emissions goals and where you fit in. Use that information to help guide your own emissions-reduction strategy. As slow-to-respond competitors struggle to catch up, you could stand to gain market share.

 

 

2. Stay ahead of regulations

 

What you should know: While businesses are no strangers to regulation, mandates for mid-sized companies to disclose detailed information on environmental, social and governance practices are likely to increase.^[3]

 

Your next steps: Get a head start by establishing processes for assessing and reporting your emissions and use of water and other resources. Rather than viewing this as a distraction from your business, try to view it as an integral part of your operations, yielding valuable and actionable insights for your business.   

 

3. Invest in cleaner energy to lower your costs 

 

What you should know: Equipment, utilities and office supplies are among the top costs for most businesses.^[4] Incremental investments in efficient lighting, heating and cooling are just the start.

 

Your next steps: As you look around your company, ask yourself, “How can our next decision or purchase make a difference?” For instance, eliminating paper checks and forms can not only reduce waste, but it can also lower your supply costs while helping you become more efficient. Likewise, utilities operators in your area may provide free or cheap energy audits, with suggestions (and possibly rebates) for efficient lighting or heating and cooling systems that lower energy consumption, all the while slashing your bills.^[5] And as the costs for electric vehicles and renewable energy drop and they continue to become mainstream, think about whether it makes sense to switch some, if not all, of your fleet vehicles to electric or install solar panels in a new facility you’re building.

 

4. Make net zero an integral part of your brand

 

What you should know: The intangible benefits of working toward net zero may be as valuable as the tangible ones. Consider that 58% of consumers say they buy from or advocate for brands they believe in, 60% say their beliefs and values influence where they choose to work, and 75% worry about climate change.^[6]

 

Your next steps: Speak with employees, customers and other stakeholders about what matters to them. Incorporating their thinking and telling an authentic story about your efforts toward cleaner operations could strengthen your brand and help you attract and keep valued employees.

 

5. Gain near-term benefits without knowing all the answers

 

What you should know: Committing to net zero may seem daunting, especially at first. But the fact is, nobody has all the answers. While the business community is establishing standards for cleaner business practices and ways to measure progress, knowledge of how to get there will continue to evolve.

 

Your next steps: Don’t let perfection be the enemy of progress. Start now. Conduct a SWOT analysis (which refers to strengths, weaknesses, opportunities and threats) to better understand the implications that clean energy will have for your business. Also get the conversation going within your company and with others in your industry. Taking steps to reduce your emissions can offer benefits now, even as you hone and perfect your strategy moving forward. And you don’t have to go it alone — speak with your banking representative for ideas on getting started. 

 

 

¹Net Zero Tracker, “Global Net Zero Coverage.”

²S&P Global, “The Sustainability Yearbook,” Feb. 1, 2022.

³The Conference Board, “How Smaller Companies Can Catch Up on ESG Reporting,” Feb. 28, 2022.

⁴Business 2 Community, “12 Major Business Expenses (and How to Reduce Them).”

⁵Energystar.gov.

⁶Edelman, “Edelman Trust Barometer 2022.”