Carbon Neutrality is Good for Business

Pachama
Pachama
Jul 30 · 4 min read

A goal to become carbon neutral shows a commitment to the future and an understanding of the urgency of climate change. Climate action leaders at these companies want to see environmentally responsible business operations while showing strong profits. As of a 2014 report, companies that make climate action a priority have an 18% higher ROE than peers without strong climate action policies and 67% higher ROE than companies that refused to disclose their policies. Academics are also seeing how a commitment to sustainability can increase profits. A 2018 review of scholarly literature found that 78% of academic articles evaluated found a positive correlation between sustainability, broadly including environmental, social, and economic concerns, and corporate financial performance.

Companies are pledging to make their businesses carbon neutral. Leaders who are conscious about global issues understand that long-term strategy includes considering the cost of their carbon dioxide emissions. Companies like Google and Microsoft have already achieved net zero carbon dioxide emissions, and many more, like Apple, Salesforce, Patagonia, and Disney are making pledges to go carbon neutral. About 16% of global GDP is now covered by 2050 carbon neutrality pledges from both regulatory and voluntary commitments.

Google, the largest company to have already achieved its carbon neutrality goals, made the decision to go carbon neutral in 2007. By 2017, Google was using renewable energy for all of its electricity needs. Carbon offsets, are part of Google’s strategy to maintain net zero CO2 emissions. As of a 2018 environmental report, Google has invested in 40 carbon offset projects and offset 17 million metric tons of CO2 equivalent.

Companies are developing innovative models to hold themselves accountable. Microsoft has also achieved its carbon neutrality goals by charging its internal business groups a carbon fee for their emissions. These fees are used to purchase carbon offsets around the world. Microsoft has invested in forest carbon offsets, including in Washington state and Indonesia.

In 2018, Apple reduced its carbon footprint by 35% since its 2015 high using renewable energy, low-carbon design, and energy efficiency. Apple focuses on forests. On Earth Day 2018, they launched the Give Back campaign which protected 27,000 acres of mangrove forest in Colombia. As part of its sustainability program, Apple requires all paper and wood fiber products to come from Forest Stewardship Council certified forests, which manage the forests sustainably, many of which are in China.

Other cutting-edge companies are also choosing carbon neutrality. Salesforce set a goal to become carbon neutral by 2050, but achieved net zero in 2017. Salesforce continues to lead with its carbon neutral cloud. Patagonia will be carbon neutral by 2025, with restoring forests as one of their key pathways to capturing carbon. The Walt Disney Company has promised to reduce emissions 50% from its 2012 level, and by 2018 had already achieved a 44% reduction. Even oil giant Shell is making a contribution to reduce and offset emissions with forest-based projects.

Leading companies are responding to investors and stakeholders who care about climate change action and who will invest more in companies with carbon neutral pledges. Even a small group of small shareholders can influence a large company with the help of groups like Climate Action 100+, a 5-year collaborative initiative of investors to leverage their combined $33 trillion asset management portfolio. Shell’s pledge to go carbon neutral was initiated by shareholders.

Employees are also looking for companies they can be proud to work for in a changing climate. A recent survey reported that 70% of the thousand respondents were more likely to choose a company with sustainability commitments, and 40% of Millennials had chosen to work for a company based on sustainability performance. The survey also found that 30% of respondents have left a job due to lack of sustainability policies and more than 10% would take a lower salary to work for a company that takes climate action.

Environmentally-minded customers are looking for companies with strong sustainability commitments and promising track records of delivering on their plans. Research is showing that customers around the globe care about corporate environmental initiatives. A Neilson report showed that 81% of those surveyed across age and gender groups believe that companies should have policies that benefit the environment. Another report shows that in the United States, 87% of those surveyed would purchase products with environmental or social benefits and 68% of Millennials bought such a product in the last year.

A strong environmental commitment includes considering carbon emissions. Carbon neutrality often requires offsetting emissions by buying carbon credits. Nations and regions with regulations operate their own markets, and a robust voluntary carbon credit market is growing. One of the best options for carbon offsetting is restoring forests, either by avoiding deforestation or planting new forests, and there are opportunities for restoring forests with carbon offset projects around the globe.

Explore offsetting your company’s emissions with Pachama forest carbon offsets.

Pachama

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Pachama

Restoring the Forests to Solve Climate Change. Learn more at http://pachama.com

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