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How Can Carbon Footprint Affect a Business? [Hint: It Reduces Your Profitability]
Last updated: May, 2023
Every business leaves a mark on the environment, much like footprints on a beach. But these are not ordinary footprints; they are made of carbon and count.
Ignoring them can cost more than just money; it can affect how your company is seen and who wants to work for you.
55% of Gen Zs and 54% of Millennials say a brand’s environmental impact and policies affect their decision when accepting a job.
In a world where younger workers value the planet as much as their paycheck, it’s essential to understand that your carbon footprint is more than a number; it’s a statement about your business’s role in a larger story.
What is a Carbon Footprint in Business?
Your carbon footprint in business is the sum of all greenhouse gasses a company emits, both directly and indirectly.
Think of it like an environmental ledger, accounting for emissions from office heating, company vehicles, and even the electricity used to power operations.
This footprint spans the entire supply chain, from the raw materials sourced to the final product delivery. It’s a tangible measure of a business’s ecological impact, reflecting how its operations and choices resonate with the environment.
Understanding and managing this footprint is not just an ecological act; it’s a statement of a company’s commitment to a sustainable future.
RELATED: How to Make Your Company Carbon Neutral: A Step-By-Step Guide
How Can Carbon Footprint Affect a Business? [The Hidden Costs]
The carbon footprint impact on business is multifaceted, affecting everything from operational costs to brand reputation and customer loyalty.
Here’s how it affects various facets of your business:
1. Increased Operating Costs
Carbon emissions often tie back to energy use. The more energy a business consumes, the larger its footprint and the heavier its energy bills.
Think of it as a chain reaction; high carbon output means higher expenses, as simple as that.
2. Regulatory Risks
Governments are tightening the reins on carbon emissions, making it a tricky dance for businesses.
High-emitting companies could face fines, navigate complex regulations, and invest in more resources to stay compliant.
3. Brand Reputation and Customer Loyalty
In the eyes of consumers, a company’s carbon footprint is a reflection of its values. High emissions? It might suggest a lack of concern for the planet.
This perception can shift customer loyalties, impacting your profitability and drawing them away from your business and towards brands with a stronger sustainable ethos.
4. Increased Staff Turnover
The workforce, especially younger generations, are increasingly climate-conscious. They’re not just looking for a job; they’re looking for a cause to align with.
Companies with large carbon footprints might find themselves less attractive to potential talent, risking higher turnover and a shrinking pool of applicants.
17% of Gen Zs and 16% of Millennials say they have already changed jobs or sectors due to climate concerns, with 25% of Gen Zs and Millennials planning to do this.
RELATED: X Biggest Business Benefits of Reducing Your Carbon Footprint
Reducing Carbon Footprint: A Strategic Business Decision
Trimming down a business’s carbon footprint isn’t just eco-friendly; it’s a smart strategy. Here’s how you can adopt a proactive approach to managing your emissions:
1. Energy Efficiency and Sustainable Workplace Habits
Energy efficiency is not just about turning off the lights. It’s about embracing sustainable workplace habits.
By reducing energy consumption, you’re slicing through energy bills and emissions, saving the planet and cutting costs simultaneously.
Some of the ways you can save energy include:
- Upgrade to energy-saving appliances.
- Introduce smart technology for optimizing heat and cooling systems.
- Switch to LED bulbs.
- Switch devices off instead of relying on stand-by mode.
When your devices are sorted, you can reduce your footprint further with sustainable workplace habits, like:
- Support carpooling, public transport, and biking to work.
- Implement waste-free kitchens.
- Promote practices like double-sided printing and switching to digitalization where possible.
RELATED: X Essential Sustainability Strategies for Businesses
2. Sustainable Supply Chain
A sustainable supply chain means prioritizing reducing your indirect emissions.
Who you partner with for your products and services will affect your ability to achieve net zero. Evaluate suppliers and choose those committed to sustainable practices for waste management and using eco-friendly materials.
How your suppliers deliver your goods is equally important. Take the time to streamline transportation to minimize emissions by using eco-friendly couriers or optimizing delivery routes.
3. Renewable Energy Sources
Switching to renewable energy sources is like giving your business a green heartbeat.
Solar panels, wind energy, or purchasing green energy can stabilize your energy costs and drastically cut down your carbon output.
Some other ways you can introduce renewable energy sources into your business include:
- Implement energy storage solutions to store renewable energy when the sun isn’t shining or the wind isn’t blowing.
- Invest in renewables (like sustainable energy farms) when you can’t generate renewable energy onsite.
Each of these strategies are an investment in a more predictable, sustainable energy future.
RELATED: X Sustainability in the Workplace Ideas
4. Educating and Engaging Employees
Educating employees about sustainability and encouraging eco-friendly practices makes a big difference.
Whether recycling, reducing paper use, or commuting smartly, every action adds up. You’re creating a culture where everyone is rowing the boat in the same green direction.
And your employees want you to take this action.
According to a Deloitte study, Gen Zs and Millennials want their employers to help them learn and develop skills to transition into a low-carbon economy.
That’s where tools like Emission Sentri can help.
It helps you drive behavioral change and reduce emissions at scale via personalized insights, Generative AI recommendations, and awareness training.
You’ll have a live dashboard of your emissions progress, helping employees see the tangible results of their actions and how close your business is to achieving net zero.
Emission Sentri: Your Partner for Driving Sustainable Behavioural Change
Understanding and managing a business’s carbon footprint is a critical strategic decision impacting the environment and profitability.
Emission Sentri empowers businesses to embrace this challenge, transforming carbon footprint management into a competitive advantage.
By leveraging Emission Sentri, you can track your environmental impact, engage employees in eco-friendly practices, and get actionable insights for improvement. It combines technology and strategy, empowering businesses to make impactful changes while enhancing employee retention and profitability.