Why your carbon footprint can affect business success

Climate change has been a global concern for several decades. It has become an especially pertinent issue as we experience more frequent extreme weather events, like heat waves and drought. Although the shutdowns brought about by the pandemic meant a sharp reduction in carbon emissions worldwide, 2021 saw a quick rebound of these levels. To make up for lost time, businesses around the world pushed to get their bottom lines back up. This, combined with a surge in spending, caused the increase of carbon levels. In India, carbon emissions were 13% higher in 2021 compared to the previous year, largely driven by an increase in coal usage, according to an analysis by the International Energy Agency released in 2022.

Increasing carbon emissions not only translate to worsening greenhouse effect, unnatural weather events and urban air pollution, there is also an underlying impact on a business’ success. Read on to find out how carbon emission affects your business and how you can play your part in reducing your carbon footprint.

Causes of carbon footprint

Corporate carbon footprint refers to the total volume of greenhouse gases emitted during a product’s life cycle, that is, during the stages of manufacturing, usage, and destruction. Examples of greenhouse gases include carbon dioxide, methane, nitrous oxide, and industrial gases like hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride.

Some causes of corporate carbon footprint include:

• Use of fossil fuels for power generation
• Excessive electricity usage
• Dependence on transportation that runs on fossil fuels
• Food wastage
• Supply chain activities that do not use carbon-neutral or other modes of transport that offset carbon emissions.

How does the rising carbon footprint impact your business’ success?

There are several ways in which carbon footprint can impact a business.

1. Economic impact

The carbon footprint of an organisation is an indicator of how much energy it is using and thus the amount of money it has to spend on energy bills. To reduce the carbon footprint, the organisation will have to adopt more energy-efficient approaches, such as upgrading water heaters and dryers or switching to LED lights. These practices have cost-saving potential, and the savings can be channelled into other higher-priority business areas.

2. Social impact

Today’s customers are more conscious of the environment and prefer eco-friendly products and brands that adopt green practices and make sustainable efforts. According to a survey conducted by Nielsen on Indian consumers, 86% of those surveyed prefer energy-efficient products and appliances, with 79% preferring products with recyclable packaging. 

This puts an increasing focus on social responsibility amongst organisations and shows that green practices play an essential role in building a good brand reputation. If consumers feel that a brand is not doing enough to be sustainable and environmentally friendly, they may switch to another brand, resulting in potential losses for a business.

3. Political impact

The increased awareness surrounding environment-friendly practices has led governments to create laws and regulations to make businesses more accountable for their choices. Several statutory boards and ministries, such as the Ministry of Environment, Forest and Climate Change (MoEFCC), have mandated environmental laws with the ultimate aim of ensuring enterprises in India lower their carbon footprint. It has set stricter parameters for which businesses have to operate within. For example, the Companies Corporate Social Responsibilities Policy Rules (2014) and Companies Act (2013) stipulates that businesses with a certain net worth have to engage in CSR efforts. Companies must comply with these laws to obtain the necessary licenses or permits.

How to reduce carbon footprint?

Companies must work on ways to reduce their carbon footprint to bring about a positive impact on both the environment and their business success. The following measures can help them to reduce the company's carbon footprint:

• Reducing energy consumption by switching to energy-saving appliances and LED lights can help reduce energy consumption, resulting in comparatively lesser CO2 emissions.
• Using recyclable and reusable materials can help reduce the waste they generate, resulting in fewer greenhouse emissions.
• Being mindful of food waste can also significantly impact reducing CO2 emissions. During coporate events, ensure that there is minimum food wastage by ordering just the amount of food. Also, consider choosing local food producers so as to minimise transportation. By choosing local, you ensure your food did not need to be flown thousands of miles or kept refrigerated during its journey here, hence reducing your carbon footprint.
• Analysing the complete supply chain to identify where and how they can reduce the CO2 emissions will reduce the overall business carbon footprint. Consciously selecting vendors and logistics carriers that adopt green practices will also help reduce their own carbon footprint.

DHL Express is a responsible and trusted logistics carrier that has been a pioneer in adopting green practices and helping businesses achieve their sustainability goals. We have planned to increase our usage of sustainable aviation fuel by 30% by 2030. Also included are plans to shift to electric vehicles for 60% of our last-mile fleet by 2030. Through the GoGreen initiatives, DHL Express commits to zero emissions logistics by 2050 to reduce the carbon impact and aid climate protection.

Sign up for a DHL Express account today to see how we are playing our part towards sustainability and how we can help you reduce your carbon footprint and achieve your sustainability goals.