Jump to content

CO2 balancing for companies - what are the opportunities and risks?

The topic of carbon accounting is more topical than ever and will become even more important in the future. In this article we would like to explain to you the opportunities offered by the creation of a carbon footprint and the risks of not doing so. It is based on research from a research project that we conducted together with the University of Freiburg.

 

What Conditions Does the German Government Impose?

In 2015, the Paris Climate Agreement was adopted, to which Germany is committed. The goal is to limit man-made global warming to 1.5°C, compared to pre-industrial levels. To achieve this, fewer emissions must be emitted worldwide. This can be achieved, for example, through the use of renewable energies. That is why Germany has set itself the task of achieving this goal through regulations and laws. 

At the moment, there is no obligation for small and medium-sized companies to report their CO2 emissions, but a Corporate Sustainability Reporting Directive (CRSD) has been submitted to the European Commission, which provides for stricter rules for sustainability reporting and will be passed in the foreseeable future. Among them are, for example, an obligation for CO2 balancing or an increase in CO2 taxes. 

So if you start with CO2 accounting now, it will save you a lot of stress and costs later on. If you do not submit a mandatory CO2 balance, you may be subject to heavy fines. 

 

What about investors and customers?

Environmental guidelines are also becoming increasingly important to investors. Accordingly, companies are more attractive to them if they communicate to the outside world that they are concerned about their emissions and environmental impact and act in a future-oriented manner. These ethical requirements also apply to customers. The creation of a carbon footprint and the associated environmental awareness lead to customer loyalty and the acquisition of new target customer segments. 

Furthermore, our risk analysis has shown that a carbon footprint can also have an impact on a company's creditworthiness. Banks already assess the creditworthiness of a company on the basis of various environmental criteria. They must therefore already deal with the CO2 issue today in order not to be confronted with significantly worse credit conditions in the future. 

 

What advantages do you gain?

If you draw up a carbon footprint for your company, this not only promotes your reputation as a credible company. By taking a close look at your production, it is also possible to find strengths and weaknesses in your production chain and optimise them. For example, making your processes more energy efficient or using less carbon intensive material will lower your production costs. You also present yourself to the outside world as a responsible company that thinks about its impact on climate change and acts as a pioneer.

 

Conclusion 

Ultimately, carbon accounting will come to companies of all sizes sooner or later. Act now and avoid complications later. Your relationship with customers and investors will also benefit from your climate-friendly actions. We accompany you on the path to climate neutrality right from the start. From the preparation of the balance sheet to the long-term climate strategy. 

This analysis was carried out by Çetin Enöz, Erick Paez, Ganga Vandenberg, Gonzalo Díaz Silveira, Heath Hinojosa, Jose Joaquín Burbano de Lara Moncayo and Miriam Godinez Chavez.

Are you interested in carbon accounting?

Our offers