Why your carbon footprint can affect business success

Corporate carbon footprint not only impacts the environment but also businesses themselves. We delve into its causes and consequences, plus some possible green solutions you can adopt.

Ever since the Industrial Revolution, the earth has seen an increase in carbon emissions. The effect can be felt with climate change, the key driver of many global challenges, from famines and wildfires to smog and air pollution.

In Australia, 2.4 million small and medium enterprises emit 146.5 million tonnes of the country’s carbon emissions yearly. Should they switch to a carbon neutral energy retailer, they can reduce carbon footprint by 30%. Small changes like this is equivalent to taking 15 million cars off the road.

To first understand how you can make a difference, noting the causes of carbon footprint is a good starting point.

Causes of carbon footprint in business

In general, carbon footprint refers to the impact humans make on the environment in terms of greenhouse gas emissions, measured in carbon dioxide units. In the business sense, it is the total volume of greenhouse gases produced by an organisation, also known as corporate carbon footprint.

Several factors influence corporate carbon footprint. For instance, the dependence on fossil fuels for power generation, excessive electricity usage, and minimal carbon-neutral transportation for business operations lead to higher emissions of greenhouse gases. Your supply chain’s green activities can also impact your carbon footprint. According to McKinsey & Company, a retailer's supply chain accounts for over 80% of greenhouse gas emissions, which further impacts 90% of the earth’s biodiversity and ecology.

So why is there an impact on your business?

1. Economic impact of corporate carbon footprint

Higher carbon footprint is indicative of greater energy costs. Expenditure on energy bills could be channeled to other areas of the business that require more attention.

2. Political impact of corporate carbon footprint

Today, increased attention to national green policies and corporate social responsibility practices have pushed businesses to be more socially accountable to their employees, stakeholders and the wider public. It encourages companies to be more aware of how their business practices impact society and the environment.

Australia has implemented federal, state and local environmental laws to regulate this area of business, imposing organisational requirements that differ across industries. Complying with such regulations is key to acquiring necessary licences and permits from governing bodies.

3. Social impact of corporate carbon footprint

About 90% of Australians are more likely to purchase ethical and sustainable products, with 85% preferring brands and retailers to be transparent about their sustainability efforts. This shows that brand reputation is no longer only tied to quality products and customer service, but also towards a business’ green practices. Societal and environmental irresponsibility carry far greater consequences for companies — consumers may choose to boycott the brand, inevitably leading to huge losses.

How to reduce your carbon footprint?

The effect carbon emissions have on business success is telling. What can you do to mitigate it?

1. Reduce energy consumption

Opting for energy-saving appliances and machinery will save you plenty in energy costs. For instance, LED light bulbs are known to provide better light quality, last longer and consume less electricity than traditional fluorescent bulbs.

2. Reuse & recycle

For a start, always choose durable materials for corporate assets to minimise the frequency of waste and need for upgrades. Should you wish to revamp your assets, consider donating to charity or selling them off to other organisations.

3. Reduce food waste

Be mindful of the amount of food catered during corporate events. Order just enough to avoid extras that tend to go to waste. In addition, choose catering from businesses that support local farmers. By sourcing local produce, these vendors minimise transportation in the food trail, reducing their carbon footprint, and thus your own.

4. Review your supply chain

Since vendors like caterers can impact your carbon footprint, choosing supply chain partners that adopt green practices across the fulfilment journey is a wise step.

Understanding the need for businesses who are environmentally conscious alongside the demand for express shipping, the fulfilment journey carved by DHL Express adopts several green practices.

For instance, our decarbonisation plans include the use of sustainable aviation fuels, with an aim to hit more than 30% by 2030. In addition, we want to electrify 60% of last-mile vehicles by the same year — the trial electric vehicles on Australian roads is just one example. To date, our state-of-the-art electric vehicles have driven more than 100 million kilometres.

We also use 86% of our energy from renewable sources even though we operate in 220 territories and run a multitude of distribution centres, warehouses, and office buildings. By 2030, our goal is to design and build all our new buildings following the latest carbon-neutral architecture and engineering innovations.

You may also work with vendors that can help you offset your carbon footprint through international climate protection projects, such as those by DHL Express — the GoGreen climate neutral service. Other tools such as carbon emission analysis and tracking applications provide valuable insight into how your transportation and logistics operations impact the environment. Calculating your carbon footprint allows you to find ways to reduce emissions, for instance, by planning more sustainable shipping routes.