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Expert Advice

3 Key Benefits to Measuring and Managing Your Carbon Emissions

Published April 23, 2023
By NZero
Measure and manage your carbon emissions

Changing climate influences organizations to change their practices.

There’s been a lot of news about corporations, governments and nonprofits taking a stance on sustainability and making net zero carbon emissions pledges. Many are wondering if their organizations should consider the same.

So, why should your company measure & manage carbon emissions?

The main benefits of incorporating sustainable practices into an overall business strategy are helping businesses future proof their business operations through reducing greenhouse gas emissions, mitigating the impacts of climate change and unlocking substantial economic opportunities.

Let's explore three key benefits organizations stand to gain when measuring and managing their carbon emissions: financial, risk mitigation and reputation enhancement.

1. Financial Benefits

Increased investor confidence comes through emissions data transparency and reduction objectives

By disclosing their emissions data, businesses demonstrate their commitment to environmental sustainability and show investors they are taking action to reduce their environmental impact. When carbon emissions reporting is followed by target commitments, businesses increase their investor confidence in their ability to manage their carbon risks to unlock further financing.

Realize financial benefits from government subsidies and tax breaks

Governments are increasingly pressuring companies to disclose their carbon emissions. Depending on the country in which businesses operate, those pressures turn into hard requirements. Both European countries and the United States have regulation coming into effect this and following years that is a combination of carrots and sticks. In the United States, it is mostly a basket of carrots in the form of the $737B Inflation Reduction Act. The government is offering tax incentives and credits to companies that are able to demonstrate they are measuring their carbon emissions and taking steps to reduce them. In some instances, grants are also available to businesses in certain industries.

Unlocking additional revenue streams

Businesses have the opportunity to tap into new revenue streams by offering green products and services that are more environmentally friendly and have a lower carbon footprint. Businesses can position themselves as leaders in sustainability and attract a new customer base who are willing to pay a premium for products and services that align with their environmentally-conscious values.

Improved energy efficiency and reduced operating costs

When businesses measure their carbon emissions, they’re able to analyze what is responsible for the  highest energy consumption in their operations, reduce their energy usage, lower their utility bills and save money on energy costs.

In addition, many utilities offer rebates or other incentives to businesses that are able to demonstrate that they have made energy-efficient upgrades. Lastly, some organizations offer financing or loan programs specifically for businesses that are looking to make energy-efficient upgrades. These may be offered at a lower interest rate or with other favorable terms.

2. Reputational

Brand reputation and marketing

Organizations can enhance brand reputation by measuring and reducing carbon emissions. Demonstrating dedication to sustainability and social responsibility by publicly committing to reducing carbon footprint can appeal to consumers who are increasingly concerned about the environmental impact of the products and services they use. Additionally, organizations can show they’re taking proactive steps to address climate change and protect the planet by setting and working toward carbon reduction goals. This helps to build trust and credibility with consumers, and differentiate the organization from competitors who may not be as focused on sustainability.

Organizations can also use their efforts to reduce carbon emissions as the basis for marketing campaigns, highlighting their commitment to sustainability and the actions they are taking to reduce their environmental impact. This helps to differentiate the organization from competitors and appeal to consumers who are concerned about the environment.

3. Risk and Compliance

Increased Resilience Against Future Regulation

  • Businesses are better prepared for potential government-led carbon pricing schemes, such as a carbon tax or cap and trade system, when they’re aware of their carbon emissions and have a plan in place to reduce them.
  • Businesses reduce their regulatory burden by proactively reducing their carbon emissions. This subjects them to fewer regulations and compliance requirements in the future – helping to save money and avoid associated costs.
  • Getting ahead of major regulation gives businesses competitive advantage against others in their industry.

Stronger Risk Management And Corporate Governance

  • Identifying risks and strategies: By measuring carbon emissions, businesses can better understand the risks climate change has on their operations, such as physical, regulatory or reputational risks, and take steps to proactively mitigate them.
  • Developing strategies: Understanding their carbon emissions helps businesses develop strategies to reduce their emissions and manage risks. This may involve setting emissions reduction targets, implementing energy-efficient technologies, or shifting to low-carbon business practices.
  • Improving transparency: By disclosing their carbon emissions, businesses can demonstrate their commitment to transparency and good governance, which can build trust with stakeholders, improve their reputation and attract new investors.
  • Complying with regulations: Some governments have implemented regulations that require businesses to measure and report their carbon emissions. By measuring their emissions, companies can ensure that they are in compliance with these regulations and avoid the risks associated with non-compliance.

Understanding their carbon emissions and the impacts of climate change, organizations are being pushed to develop innovative solutions to future-proof their operations in a changing climate. Companies with highly carbon-intensive operations will have to find new ways to create products and services, which will compel them to develop, implement and incorporate greenhouse gas management practices that align with their overall business strategy.

image of meter box outside

Not All Carbon Measurement Is Equal

While the case for measuring and managing carbon emissions is clear, organizations need to keep in mind that not all carbon measurement is equal. Initial carbon accounting methods involved calculating the average energy consumption for the month, or year and using EPA’s eGRID average emissions factor. However, using average emission factors could cause you to drastically under or over report your true carbon footprint and organizations are starting to shift to industry best-practice 24/7 hourly calculation method.

Getting the most accurate, real time data gives you insight into your unique load profile and seasonality – providing countless ways to shift load to lower demand periods, optimize operations and unlock substantial ROI. When highlighting sustainability efforts, the importance of hyper-accurate emissions data is critical. Accurate and auditable emission data prevents an organization from greenwashing and provides a solid-framework for building a positive reputation.

How Can NZero Help?

NZero is a carbon accounting and management platform that automates data collection directly from the source and calculates greenhouse gas emissions to streamline accurate environmental reporting. We recognize that environmental reporting is extremely difficult; yet, the significant financial, operational, and environmental advantages far surpass these challenges

The streamlined data collection and calculation methodology we developed makes it possible to move from static, outdated measurements and reporting to informed, effective, and strategic action.

 In fact, using our real time technology, we discovered one of our commercial real estate customers (using average emission factors) was over-reporting their building emissions by 24 percent! If their state or city had a carbon pricing program, their lack of accurate data would have cost them $92,000 in excess taxes. 

NZero customers use our platform to understand and act on their emissions, easily develop audit-ready reports, and engage stakeholders on carbon reduction measures on a regular basis. Our environmental data is compatible across ESG frameworks, complying with the GHG Protocol and being consistent with TCFD, GRESB, CDP, SASB, and GRI.

For sustainability leaders, by sustainability leaders.