The greatest threat to our planet is the belief that someone else will save it

Carbon Footprint — A measure of company success?

How do we measure a company’s success?

Off the top of our heads, the first few parameters we might think of would be:

  • Revenue or turnover
  • Net worth
  • Brand recognition and value
  • Workforce strength
  • Geographical reach
  • Customer base

All the above parameters can be tangibly measured. The bigger these numbers, the more successful the company is considered to be.

The rate of growth of the above parameters can be tangibly measured too. The faster the growth of these numbers, the more successful the company is considered to be.

As we analyse further, we may think of some other parameters for a company’s success:

  • The benefits that the company’s product(s) or service(s) brings to its customers, and society at large.
  • The innovation the company brings about in creating and delivering its product(s) or service(s).
  • The magnitude in which the company gives back to the society, through corporate social responsibility (CSR) for example.
  • The “happiness index” of the company’s employees, customers and all other stakeholders.

Some of these parameters may not be “measurable” in truly objective, scientific ways, but they can definitely be used as indicators of success. So a company can be deemed successful if, say, it meets its employees’ and stakeholders’ expectations and keeps them happy. Or it may be deemed successful if it brings about much needed innovation in its industry.

While there could be many other measurable and immeasurable parameters to a company’s success, one parameter which I believe must figure near the top, if not at the top of the list, is its Carbon Footprint Per Capita. The lesser the footprint, the bigger the success. It’s a measure of how eco-friendly the company is. Sadly, for most companies, their carbon footprint doesn’t figure anywhere in this list.

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Unless we’re living under a rock, or are in denial, or have vested interests in denying scientific facts, we know that climate change is real and caused by human activity. We are seeing the devastating effects of climate change getting compounded year after year. (… and if we think that climate change does not / will not adversely affect our company’s business, we are fooling ourselves. More sick leaves, more work-from-homes due to extreme weather… more operational breakdowns due to unseasonal storms or unprecedented floods; the list grows bigger every day…).

If concrete steps are not taken now to address and reverse climate change, it will become the biggest crisis humanity has faced yet. Some argue that it already has.

We also know that the most effective way we can address climate change is by reducing our carbon footprint. Because carbon emissions are the biggest contributors to climate change, whether done by people and their lifestyles, or corporations and their business operations.

If companies start considering their carbon footprint per capita as the biggest measure of success in their respective industries, it can create a culture which consciously takes steps to address climate change everyday.

The good news is carbon footprint is measurable. It’s a complex calculation, but it is measurable. And because of this, companies can keep track of whether their carbon emissions are going up or down.

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Here’s what I think companies could do:

Calculate their carbon footprint per capita and make it visible as a number. I’m calling it CFP Number for now :-).

This CFP Number could be the standard indicator of a company’s carbon footprint; somewhat similar to the Pollution Index numbers we get for cities. The higher the number, the bigger the problem.

This number, and any changes in it, can be highlighted by companies on their websites and multiple other mainstream avenues (not just eco-magazines). Just like they are expected to release their revenue numbers, companies can be expected to release their CFP numbers on a quarterly basis. So a reduction in CFP during Q2, in comparison to Q1, is good progress for the company.

Furthermore, just like electronics products are rated on their power savings, companies can be rated, and subsequently ranked according to their CFP numbers. Those with the lowest CFPs could be recognised, rewarded and held in prestige. They can brand themselves as eco-friendly / environmentally responsible, and use it to attract talent. Why not?

It goes without saying that CFP standards will be different for different industries. However, if a company’s CFP is higher than its competitors within its industry, then it can take steps to address that problem. At the very least, the company will realize it has a problem.

Another after-effect of bringing CFP to the forefront could be the emergence of Corporate Environment Responsibility (CER) initiatives.

Remember how 15 years ago, there was no concept of CSR? But now it’s a norm. Companies now are expected to have a CSR portfolio and showcase it, sometimes to prospective clients. They sometimes get business because they are judged as being socially responsible (even if they might be paying little else than lip service… but that’s a separate discussion :-)…)

Well, what if tomorrow companies start losing out on business because of high CFP and lack of CER portfolio? What if clients perceive them as environmentally irresponsible and shy away? I believe companies must not only be serious about CER, but adopt it as one of their foremost corporate values. The time is now, more than ever.

Let’s be clear. Reducing CFP is not just about going paperless, or incentivising carpools. Nor would CER be just about planting trees. There’s much, much more. With concerted efforts, every operation that a company undertakes can be made more eco friendly. There are expert consultancies dedicated to helping companies reduce their carbon footprint. It’s high time to engage them.

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After reading this, the businessman in you might think that worrying about CFP and CER (on top of CSR) will distract you from focusing on your business. I agree. But you know what? It’s the right thing to do. The way global warming is affecting our lives, sooner or later, you will have to make it your business. If you need a profit incentive, you should know that going green actually reduces your operating costs considerably, thereby increasing your revenues.

If the cynic in you considers these suggestions to be far-fetched pipe dreams, I’m willing to wager that 10 years from now, companies across industries will implement these very suggestions in some form or another. Some will do it by choice; others will do it because they would have no choice. Eco-friendliness will become an integral part of their values, mission statements and business propositions. And yes, it will be their primary measure of success.

Wanna bet?