Why It's Important for Businesses to Reduce GHG Emissions

Companies often have corporate sustainability initiatives that address how those entities can make the world a better place for everyone. Reducing greenhouse gas (GHG) emissions is often a vital component of a larger sustainability plan. But why is it so crucial for businesses to focus on that aspect?

Only 100 Businesses Are Responsible for Most of the World's Emissions

Some company leaders may mistakenly conclude the GHG emissions problem is too big to solve, so any efforts are ultimately fruitless. But, CDP, an organization that runs a global disclosure system for businesses to measure overall environmental impacts, published a startling 2017 report that showed 100 companies account for approximately 71 percent of industrial GHG emissions around the world.

That suggests if some of those businesses made emission-reducing efforts, the results could be substantial. Plus, even smaller businesses not mentioned in the report should remember that any positive contributions are part of a much larger, worldwide effort to make progress.

Cutting Emissions Could Also Cut Costs

Regardless of their respective industries, businesses typically focus on how to run their operations as cost-effectively as possible. For companies including Dell and Siemens, that means reducing emissions. Such tactics could save companies millions over the long term. Moreover, there are various ways to achieve that goal.

Some companies make their fleets of company cars more eco-friendly by investing in hybrid or electric models. Others use innovative packaging that is less expensive to produce and kinder to the environment than traditional options.

There are also opportunities to use sensors that track the resource usage of a company, such as in a factory environment. Those could do more than keep tabs on wasted resources, too. Some might pinpoint labor inefficiencies, leading to better training for staff members, or speed up existing processes.

Companies Can Get off to Strategic Starts

Company executives frequently have good intentions about reducing GHG emissions, but find they are not sure where to begin. It's helpful for them to understand that GHG emissions fall into various tiers called scopes.

Scope 1 represents emissions from the things a company owns or controls, while Scope 2 emissions are those from purchased electricity outside of the organizational boundary.

Finally, Scope 3 emissions — those related to a company, but which an outside entity owns and controls — make up approximately 80 percent of the GHG emissions that report to CDP. So, a company that wants to make the most impact from the start could focus on its Scope 3 emissions.

Contacting members of the business' supply chain is essential, since many Scope 3 emissions originate there. Asics, the athletic shoe brand, aims to cut its supply chain emissions by 55 percent by 2030. One of its goals within the initiative is to strengthen engagement with its suppliers.

People Prefer Buying From Sustainable Brands

Businesses also need to realize that by taking proactive steps to get a handle on GHG emissions, they could impress current customers and attract new ones. A 2017 international report from Unilever shows a third of consumers choose what to purchase based on companies' social and environmental impacts. Also, more than one in five people polled said they would actively choose brands that showcased commitments to sustainability on their packages.

When companies focus on reducing GHG emissions, they could come across as more appealing to choosy, planet-conscious consumers.

Businesses Have Options Even in Challenging Industries

Some industries cause more greenhouse gas emissions than others. Agriculture is one of them. When farmers apply fertilizers to their crops, the practice releases over a million tons of nitrous oxide, which is a greenhouse gas 260 times more potent than carbon dioxide. However, farmers in Brazil are starting to use a practice called green manuring instead.

A process called biological nitrogen fixation makes this possible. Farmers harness it by planting legume crops with bacteria in their roots. They convert nitrogen captured in the air into an organic form other plants can use.

Then, when those legumes get harvested, farmers plant other things in the same spaces that benefit from the nitrogen that's already in the soil. Taking this approach minimizes the extra fertilizers farmers need to use.

Research indicates more than 76 percent of nitrogen found in Brazilian-harvested cereals and grains comes from biological nitrogen fixation, with less than 20 percent originating from the traditional applications of chemical fertilizers. This case study proves even when companies are part of sectors with established practices that contribute to high GHG emissions, it's possible to make positive changes.

Supporting the Planet and Doing So Much More

When companies reduce their GHG emissions, they're contributing to Earth's sustainability. But, they can also have favorable impacts on their profits and operations.