The greenhouse gas emissions your company generates are not the only ones you should consider in your sustainability strategies. Those that come from the activity of your collaborators or distributors are called “scope 3” emissions. And even though 92% of all emissions are indirect, only 12% of organizations consider measuring scope 3 to be their top priority. To make matters worse, a margin of error of up to 30% is estimated in these analyses, according to studies.
We know that, at first glance, talking about emissions can sound technical and overwhelming, but in reality, it is a factor that can drive or hold back your business success. We explain it in a simple way in this article.
Do greenhouse gases impact the economy?
If you are already an expert on greenhouse gases, you can skip a few paragraphs because we are going to start with the basics; because to answer the question above, we need clarity on what these gases are. Imagine that these gases work like a kind of blanket in the atmosphere. They trap heat from the sun and direct it back toward the Earth. This, in a way, helps keep a stable temperature on our planet.
However, when there are too many of these gases in the atmosphere, things get complicated. The Earth’s temperature rises, and this brings problems such as intense rainfall, stronger droughts, powerful storms, rising sea levels, and other challenging effects.
What you may not realize is that this can also affect the economy and, of course, your company. Here are some examples:
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Prolonged rains and intense storms cause floods and landslides on roads, which impacts the movement of raw materials or finished products.
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Extreme temperature and rainfall conditions can reduce crop productivity, causing losses in the food sector and even food shortages in some regions.
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The rise in ocean temperature causes changes in marine currents and affects the maritime transport of products. Shipping companies currently must modify their routes, making journeys less efficient and more costly.
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The tourism sector is affected by the intensification of hot or cold periods, as well as storms and hurricanes, causing fewer tourists in some areas and increased accommodation costs.
And these are just some of the impacts that companies may face. However, these effects can be avoided if we start limiting greenhouse gas emissions in business activities and daily life.
According to studies updated to the year 2023, it is necessary to reduce 250 billion tons of CO2 to avoid the 1.5 C increase and the catastrophic effects on production chains and people’s lives; this indicator is commonly called the “Carbon Budget.”
This important task of reducing carbon emissions is achieved with the first step: estimating the generation of direct and indirect greenhouse gas emissions of companies.
What are direct and indirect emissions?
Corporate carbon emissions are divided into two main categories: direct and indirect emissions. Direct emissions are those that your company generates internally, that is, the emissions released on-site at the place where the activity takes place and generated by emission sources owned by the company, for example the use of the organization’s own vehicles.
Indirect emissions, on the other hand, come from external sources related to your activity, but that occur at sources owned by the company or controlled by another organization, such as electricity generation from the national interconnected grid, the transport and distribution of your products, among others.
When corporate emissions are reported, a classification by Scopes is generally used. Scope 1 corresponds to the direct GHG emissions from sources that are owned or controlled by the organization.
In scope 2, the indirect GHG emissions associated with the generation of electricity purchased and consumed by the organization are reported, and finally the scope 3 emissions group the other indirect emissions carried out by third parties or the use of products or services offered by others.
How emissions can drive your success
Keeping track of greenhouse gas emissions and taking action to reduce these impacts not only contributes to the global effort to have a better chance of the survival of life on the planet, but can also bring benefits and determining factors for your company’s success.
Competitiveness:
In today’s era, being a company that is conscious and responsible about its environmental impacts is not just a trend, it is a necessity. Companies that reduce their emissions stand out as sustainability leaders, which can attract more customers, investors, and employees committed to a better future.
Cost savings:
Emissions are closely related to the inefficient use of resources; being a high-emitting company means it has very high operating costs and is not efficient. Reducing emissions means you are operating more efficiently and saving money on energy, fuel, and other resources.
Investment opportunities:
Many investors already have carbon efficiency and sustainability indicators on their radar. Recently, the financial sector is implementing internal protocols to measure the climate impact of its investments, which means that taking responsibility for impacts translates into greater financing opportunities and reputation.
How emissions can hold back your success
If you manage your emissions effectively, you can propel yourself toward a more sustainable and profitable future. But if you overlook them, you run the risk of damaging your reputation and your finances; here we tell you more.
Damaged reputation:
Excessive emissions can seriously damage your company’s reputation, especially in a world where consumers are increasingly conscious of the environment. A bad reputation can lead to the loss of customers and business opportunities.
Rising costs:
As emissions regulations become stricter, ignoring this issue can result in rising costs as you must adapt to sudden changes in order to comply with regulations.
Competitiveness at risk:
Companies that do not address emissions may find themselves lagging behind the competition. The lack of sustainable measures can cause you to lose business opportunities and disadvantages compared to companies that are more conscious and responsible about their climate impacts.
The solution with CarbonBox
To achieve effective and large-scale reduction by the business sector, managing carbon emissions cannot be complicated and complex. This is where CarbonBox comes into play, your ally to measure, reduce, and offset your direct and indirect greenhouse gas emissions.
Our services can take your company from start to finish on the path to carbon neutrality. Our modules provide a comprehensive view of carbon management, allowing you to make informed decisions that will take your company to the next level.
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Carbon footprint estimation module: calculate your greenhouse gas emissions automatically, you don’t have to worry about equations, variables, or constants, CarbonBox does it for you, and at the end you can download your Greenhouse Gas Inventory report.
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Reductions module: you can configure reduction scenarios for your emissions, simulate changes, and visualize reduction results. You can download your reduction plan and track your reduction actions over time. This allows you not only to meet your emissions reduction targets, but also to gain a competitive advantage by adopting sustainable practices.
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Offsets module: you will find a marketplace of offset projects where you can choose the option most aligned with your company’s objectives and achieve carbon neutrality for your impacts.
The future of business lies in taking responsibility for impacts and being transparent about implementing solutions, and CarbonBox is here to help you lead the way toward more sustainable business success! Join us and discover how addressing carbon emissions is not just an act of responsibility, but a smart strategy.
Request your demo or schedule a consultation today!