How Reducing Carbon Emissions Leads to Cost Savings and More Profit
You may believe it is counterintuitive to think that reducing carbon emissions will increase profits, but that is not true of all emission-reducing initiatives. When you think of reducing carbon emissions we think of the large capital costs. Setting up solar and wind renewable energy solutions requires significant capital investment up-front. Equally replacing high consumption fossil fuel vehicles and machinery requires capital investment.
Even with solar or wind farms, or replacing vehicles and machinery there will be cost savings and more profit. In those cases, it will take a few years to see the cost savings. For example, solar panels are expected to last 20-30 years, but the average household takes 4-6 years to recover their initial investment from the savings in their electricity bills. As a result, a household will have cost savings starting after 5-7 years and lasting for the rest of the life of the solar panels, another 15-25 years.
There are other ways to reduce emissions that will have an immediate impact without large capital investment up-front. For example:
Consider the impact of holding more meetings via video conferencing rather than face-to-face. Whilst this was implemented during Covid and continues to be especially useful for widely dispersed teams, there are carbon emission savings to be had when the team all live in the same city too.
This does need to be counter-balanced by the value of face-to-face meetings. I was involved with a company that had a widely dispersed team. Every month the senior leadership team was flown into Sydney from around Australia for a one-day meeting. Often this meeting only went for half the day. Whilst some of those meetings were exceptionally valuable for having the team together, many of them were not. Not only was there the carbon emissions impact of the travel and accommodation costs but there was also the time lost whilst the team was travelling.
I think it’s worth thinking about whether there is enough value to be had in the face-to-face meetings to incur the carbon emissions involved and whether some of those meetings could be changed to video conferences.
Talk to your team about how they travel to work. Could they change from driving a car to using public transport, or walking/riding a bicycle? If every team member changed their commute even just one day a week, that would make an impact on your carbon footprint.
Whilst there is a push to get staff back into offices full-time or at least multiple days each week, consider the carbon emissions cost, the cost to the employee of the commute and their lost time in the commute as factors in those decisions.
Ask your existing electricity supplier for their carbon emissions information if it isn’t on your bills. Then research alternative electricity suppliers to see if they use more renewable energy sources and thus have lower carbon emissions.
When considering this option, the cost per kWh will need to be factored into the decision.
When you think about your carbon emissions and how you could start to make small changes to improve your carbon footprint, use the above ideas as a starting point and brainstorm what else you could do in your business.
What is helpful is to undertake a carbon baseline report to give you the data to understand what your carbon emissions are. Armed with that information, you can develop your strategies for carbon reduction and track your progress. Are you ready to start reporting your carbon footprint?