Generating Business Value from GHG Management
Companies around the world are responding to government, investor, and customer pressures by implementing Greenhouse Gas (GHG) management plans. A key challenge in the implementation of these plans is identifying a strong business case in order to justify the costs entailed, and to ensure that the approach can be sustained financially in the long run.
As I will discuss in detail during the first of our three-part, complimentary webinar series next month (Feb 1st), companies can derive business value from GHG management strategies in numerous ways. Here are five successful approaches companies are implementing today.
1. Boosting sales through climate-friendly product marketing
Marketing campaigns centered around a product’s GHG benefits can help reach new customer segments and reinforce existing client engagement. For example, CTC Global Corporation of Irvine, California, manufactures a high-efficiency transmission line conductor that reduces electrical line losses and GHG emissions by roughly 30 percent, an accomplishment certified by SCS. CTC actively markets the GHG benefits of its conductors to potential customers.
According to a 2015 Nielsen survey of 30,000 people in 60 countries, 66% of global consumers will pay more for sustainable products, up from 55% just the year before. This shows that marketing of sustainable, climate-friendly attributes of products could allow you to bolster prices.
2. Enhancing brand value and recognition
Proactive GHG management can enhance your company’s brand value and recognition, not only supporting product marketing efforts, but also strengthening relationships with customers, investors, and other stakeholders.
For example, Guayakí, a manufacturer of organic, fair-trade yerba mate, recently established its baseline GHG inventory, and has publicized the steps it has taken to reduce its GHG footprint in GHG benefits of its recycled paper products in many venues to establish a reputation as an leader in climate-friendly papermaking.
An even more aggressive option is the establishment of a carbon neutral program, which involves measuring then reducing GHG emissions, supplemented with purchases of carbon offsets to go net-neutral in terms of GHG impacts. (Learn more about going carbon neutral here.) For instance, Beneficio Cerro Alto, a Costa Rican coffee micro-mill, adopted carbon neutrality as part of its overall goal of producing high-quality coffee in a socially and environmentally responsible manner. Its carbon neutral claim was independently certified by SCS.
3. Earning extra revenue through carbon credits
If your company manufactures innovative products, or uses advanced practices to help reduce GHG emissions, you may be able to qualify for carbon credits and earn revenue on the market. In 2015, carbon credits generated over $275 million USD on the voluntary market, and significantly more on mandatory “compliance” markets such as those operating under the cap-and-trade program in California. Here are some examples of innovative projects that have generated revenue by generating carbon offsets:
- A project in Kenya used sustainable farming to increase organic matter in soils, leading to increased carbon storage.
- The Big Sky Dairy in Idaho used carbon offsets to help install a biogas generator, which uses manure from its 4,700 dairy cows to generate 1.3 MW of energy.
- The Forestland Group generated over 1.7 million forest carbon offset credits and associated revenue using sustainable harvest practices.
- Rice farmers in California earned carbon credits participating in a program to reduce emissions in their fields.
Depending on the technology or process you are using, you may be able to take advantage of the offset market to create an entirely new revenue stream.
4. Improve opportunities for grant and investor funding
Many investors and grant providers are actively seeking to add climate-friendly products to their portfolios. Sustainable, responsible, and impact investment funds are growing at a rapid pace, accounting for one in five dollars invested under professional asset management in the US. Developing a proactive strategy with specific programs aimed at mitigating climate change could make your company more attractive to investors. Or, selected investments in climate-friendly products could make your company eligible for climate change related grants from philanthropic organizations (see a list here) or the government.
For example, SCS recently advised a manufacturing company seeking a government grant to retrofit its facility to produce low-GHG products, as well as a San Francisco Bay Area startup seeking private investment to develop a climate-friendly alternative to conventional agricultural products.
5. Anticipate Supply Chain Disruptions from Climate Change
Understanding the effects of climate change on your supply chain is crucial from a business standpoint, as it allows you to anticipate and plan for potential disruptions and increased costs. As global temperatures continue to break records, and corresponding global and regional impacts are documented, this is the time to begin to explore implications for your supply chain and the effects they may have on your business.
To learn more, register now for our February webinar series, in which I will provide sustainability professionals with strategies for effective corporate GHG management planning, and answer your questions live. The first one-hour webinar takes place February 1st at 10 am Pacific.
AuthorTobias Schultz | Vice President, Research and Development
SCS Global Services To find out more , contact Tobias Schultz, or call 510.452.6389.