How Business Can Embrace and Monetize the Green Revolution

Please welcome back Katie Brenneman who recently told me that in her opinion when it comes to green and eco topics, the more information the better! So, Katie, today is talking about what energy companies are doing with profits they earn from going greener. ESG with an emphasis on the E is showing up on the business pages of newspapers, business magazines, and online with increasing frequency. So maybe, 2023 will be the year that energy producers fully opt into a zero-carbon future. Considering the headlines in the papers this week that state 2022 was the fifth warmest year since record-keeping began at the start of the Industrial Revolution, and that the last five years have collectively been the warmest on record, there is no time like the present for the energy industry to begin the low-carbon transition.

The energy industry is no longer on a quest alone to reduce its carbon footprint. Climate change concerns are making businesses everywhere look at greener strategies, processes, and investments in their operations. 

As a result, the opportunities to transition today’s marketplace to a more climate-friendly economy are increasing. Businesses, today, can reduce their carbon footprints and build profitability which can lead to increased investments in more green initiatives. Let’s look at how low-carbon goals can change our global economy to better support environmental responsibility.

How Low-Carbon Goals Are Impacting the Economy

As businesses work to reduce their carbon footprint, global leaders in government and finance are taking notice. Planning for circular economies, more efficient systems to reduce waste in products and materials, is no longer isolated and one-off. Adopted circular economic practices are changing manufacturing processes, and reducing their environmental impact. Governments and financial institutions enacting green regulations and guidance are change agents.

Today, companies are working within an ESG (Environmental, Social, and Governance) framework which has roots in environmental compliance and the application of safer environmental industry standards. ESG has become a bellwether for businesses attempting to attract top-flight investors, employees, customers, and suppliers. Companies that strive to be environmentally focused are reaping the rewards.

Benefits of Investing in Green Initiatives

Investing in climate-friendly initiatives benefits companies. Here’s what firms can do.

Complying With New Regulations

Governments are encouraging green initiatives and implementing new environmental regulations and plans. In the United Kingdom, these include:

• The Competition and Markets Authority guidelines to help business move towards greener goals within competition laws;
• A national zero-carbon commitment by 2050;
• New regulations covering industrial reuse of materials, waste management and recycling.

The United Kingdom isn’t alone. The American Inflation Reduction Act, the European Union’s commitments to net zero even sooner than 2050, and Canada’s new federal environmental initiatives cannot be ignored by businesses if they wish to be seen as good environmental stewards.

Reducing Environmental Tax Burdens

Governments are creating environmental business taxes to promote a cleaner marketplace. The taxes penalize industrial processes that pollute, carbon emissions, and gasoline and diesel usage. In the United Kingdom, these taxes are relatively high, but at the same time, the government is providing tax incentives to help companies make the transition. Smaller companies that lack sufficient capital to easily make the transition can access programs to help them offset these new taxes.

Improving Brand Reputation

Every company seeks to build brand awareness and reputation, and one of the ways they can do this is by committing to a reduced carbon footprint as a core business value. For example, adopting an ESG framework with measurable scorekeeping sets a company apart from competitors, particularly when integrated into every aspect of the business.

Communicating ESG goals to customers and prospective employees is good for both the business and the brand. Businesses dedicated to climate action need to let the world know why and what they are doing using all the communications tools in today’s arsenal: press, social media, sponsorships, and other forms of public engagement.

Creating Investor and Market Interest

Research shows that companies that support climate action are of interest to today’s investors, consumers, employees and markets. Consumers are willing to pay more for companies that offer environmentally-responsible products and services.

Profits generated by such demand are just one of the financial benefits of an eco-friendly business. Governments in both the U.S. and the U.K. are working to provide subsidies, including grant programs and financing options to boost businesses enacting green initiatives through the U.S. Inflation Reduction Act, Environmental Protection Agency regulations and work being done by the Small Business Association.

Saving Money

Promoting green initiatives such as waste reduction, energy conservation, material recycling, and application of circular economic principles can save money by driving down the cost of doing business.

Options for Green Energy Investing

Employing greener measures has the potential today to make business more profitable. One promising move a company can make is to look for a green energy provider or become its own renewable energy supplier. Businesses increasingly can find solar, wind, and energy storage options to fit the company’s footprint.

In 2016, Tesla, the electric vehicle manufacturer, merged with Solar City, a solar power system provider and together, built a microgrid for Ta’u, a small Pacific Ocean island. This real-world experiment in solar power demonstrated lower energy costs for the entire island with output far exceeding daily demand.

Businesses today can find many green energy investment opportunities from existing renewable sources as well as nascent technologies that are available now. These include seeking out renewable providers of hydroelectricity, wind, and geothermal energy.

With the future pointing to a low-carbon economy, businesses now can make investments in the above options to ensure their sustainability and a safe and healthier environment both in the present and future.