In this post, you’ll learn:

• How you can make the business case for carbon credits to internal stakeholders
• Why the most valuable brands in the world are using, or have pledged to use, carbon credits
• How to attract and retain highly engaged employees and investors
• About increasing environmental regulation and how to mitigate scrutiny
• How carbon credits can lead to increased reductions within your company’s value chain

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Making the Business Case for Carbon Credits

In today’s business landscape, companies know that sustainability is an essential strategy for long term success and are under growing pressure to transition to net zero operations. In addition to reducing their own value chain emissions over time, a critical component of a company’s holistic sustainability strategy is to drive immediate impact through high-quality carbon credits. Carbon credits not only contribute to real climate action, but also deliver significant financial and business value for your company.

To help you get your stakeholders on board, we dive into six reasons that businesses should invest in high-quality carbon credits today. 

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1. Build Trusted Brand Value

Consumers increasingly support brands that align with their personal values and are demanding that companies demonstrate environmental responsibility.

• 62% of consumers now say they’re willing to change their purchasing behavior to help reduce negative impact on the environment (IBM)
• Amazon sees an 8.4% average increase for products after they’re certified as “Climate Pledge Friendly”, and up to 12.2% for lower priced products (Momentum Commerce)

However, customers are also more vigilant about greenwashing, making it all the more important to commit to demonstrable climate initiatives and be transparent about them. By using high-integrity carbon credits that are in line with leading science and sharing their project impact, companies can build trust among customers and show real climate action.

• 8 of the 10 most valuable brands in the world already use carbon credits or have pledged to do so - Amazon, Apple, Google, Microsoft, Samsung, Verizon, Tesla, and TikTok (Bloomberg) 

Carbon credits can build increased brand value and loyalty among your consumers when used diligently, and define yourself as a leader among your competitors. 

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2. Align with Stakeholder Expectations

Other key stakeholders like investors and employees continue to push businesses to adopt a clear sustainability strategy.

• Investors see company sustainability as proactive demonstrations of long term value protection
  • Nearly 80% of global investors consider a company’s reporting on its carbon footprint and commitment to reducing greenhouse gas emissions (Morgan Stanley)
• Having a sustainability strategy also increases employee talent recruitment and retention
  • “Nearly 90% of employees engaged in their company’s sustainability work say it enhances their job satisfaction and overall feelings about the company.” (NEEF)
  • Employers with higher ESG performance see more satisfied employees and less turnover (Marsh & McLennan)
• “Across all stakeholder groups, an average of 79% are pressuring companies to increase climate action” (Deloitte)

Attract and retain highly engaged employees and investors that drive long term business growth, by including high-quality carbon credits in your company’s sustainability strategy.

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3. Prepare for Regulations & Mitigate Risk

Sustainability reporting requirements are on the rise - there are currently 5,000+ climate laws and policies and 650+ mandatory environmental disclosure requirements for companies worldwide. A few noteworthy examples facing U.S., European, and global companies are the EU Corporate Sustainability Reporting Directive, the draft US SEC Climate Disclosure Rule, and California’s SB 253. These laws all require companies to disclose their corporate emissions, and as companies disclose their emissions, stakeholders will immediately ask about their plans to mitigate them.

Companies that invest in carbon credits as part of a holistic carbon reduction strategy are able to mitigate the scrutiny that will accompany these new legal requirements and position themselves as leaders in the marketplace.

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4. Unlock Operational Efficiencies & New Opportunities

Nearly 200 years ago, mathematician Karl Pearson wisely said “That which is measured improves. That which is measured and reported improves exponentially,” and that still rings true today. Companies that take action on carbon earlier are often ahead of the curve in identifying and unlocking additional opportunities that reduce their emissions within their supply chain or operations. 

• Companies that are already using carbon credits are 1.8x more likely to be decarbonizing year-over-year (Ecosystem Marketplace)
• 59% of VCM buyers reported lower gross emissions year-on-year related to reduced emissions and/or renewable energy consumption, compared to 33% of companies not participating in the carbon markets (Ecosystem Marketplace)
• “A better ESG score translates to about a 10 percent lower cost of capital as the risks that affect your business…are reduced if you have a strong ESG proposition” (McKinsey)

Once carbon becomes a line on your company’s balance sheet, there is strong motivation to reduce it and identify areas where emissions can be reduced, which can lead to supply chain improvements, new partnerships, or even new product innovations. Some companies do this by setting an internal carbon price - a monetary value placed on greenhouse gas emissions that can be used to better understand the potential impact of external carbon pricing on business decisions or hidden climate related risks.

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5. Drive Immediate Impact

Implementing internal decarbonization strategies is vital, but it can be complex, costly, and time-consuming with delayed ability to drive climate benefits. High-integrity carbon credits offer an affordable way to deliver climate impact now.

• Business leaders use carbon credits to take immediate climate action while working to reduce emissions in the longer term (Conservation International)
• Business leaders also see carbon credits as a cost-effective solution for making progress towards sustainability goals (Conservation International)
• International emissions trading allowed by the carbon market contributes to lowered economy wide costs and could produce nearly double the climate ambition than without (EDF)

Carbon credits allow you to take immediate responsibility for 100% of your emissions by offering a flexible, cost-effective alternative to bridge the gap between current operations and future emissions reductions. 

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6. Build A Sustainable Future

The IPCC estimates that we need to deliver between 5-16 gigatons of carbon dioxide removal per year by 2050. As we are currently nowhere close to achieving those targets, companies need to take immediate action for their emissions through both reductions and removal credits.

Investing in these solutions now sends the demand signal and provides needed investment for these technologies to scale. By acting now, you help build up the supply necessary for the future and secure more affordable market pricing that will make it possible for us to meet our climate needs.

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Carbon credits drive real business value

High integrity carbon credits are more than a critical tool for solving the climate crisis—they also give companies a real strategic advantage. From enhancing brand loyalty and unlocking new market opportunities to ensuring compliance, you can strengthen your competitive advantage and be seen as a market leader by investing in carbon credits now.

Reach out to our team to learn more about how we can support your company’s climate journey.