Why Companies Should Prioritize Decarbonization Investments Now: 3 Reasons

The urgent need for a transition to clean energy has been heightened by the global energy crisis. Governments are requiring companies to disclose their carbon emissions, and businesses have the potential to profit from the shift towards decarbonization.
The past year has brought significant changes to the economy, including the threat of recession and instability in the global energy market due to the Russian invasion of Ukraine. However, there is a silver lining in the form of decarbonization becoming more cost-effective than ever before. Here are three key reasons why now is the time to invest in decarbonization: 


1. Green Technology and Renewable Are More Affordable Than Before

The prices of green technology and renewable energy continue to decline, making them more affordable than ever. Government subsidies, such as the Inflation Reduction Act in the US, are expected to further drive down costs and create opportunities for companies to invest in decarbonization and adds about $369 billion to the climate fight, mostly in subsidies for the private sector.
The cost of building and operating renewable energy projects is currently lower than that of traditional fossil fuel plants and the trend of decreasing costs for wind and solar is projected to continue in the future. This transition to renewable energy could result in trillions of dollars in savings by 2050.

2.Decarbonization unlocks economic opportunity

I have observed firsthand the financial benefits that companies can reap by investing in decarbonization. Climate action is no longer just a moral imperative, but also a lucrative business opportunity.
These opportunities come in various forms, such as cost savings from more efficient operations, and access to funding from financial institutions committed to supporting companies with net-zero targets. Consumers and corporate customers also increasingly favor companies that prioritize sustainability, with many willing to pay more for products from environmentally responsible brands. Companies such as Apple, Walmart, and Target are also encouraging their suppliers to reduce emissions and set net-zero targets.
In a recent survey, 71% of participants said they would be willing to pay more for sustainable products, with 49% reporting that they had already paid a premium for such products in the past year.

3.Take advantage of the regulations

It is becoming increasingly important for companies to take proactive steps to reduce their carbon emissions, as regulations related to emissions disclosure and reduction are becoming stricter. Pressure from investors, employees and customers is also increasing. The US government has recently proposed a rule that would require federal contractors to disclose their emissions, climate risks and targets, and similar proposals are being considered by the US Securities and Exchange Commission. Meanwhile, the EU and the UK have already implemented regulations requiring public companies to disclose their carbon emissions and other climate-related information.
With governments and regulators around the world taking more aggressive action to address climate change, companies that are prepared for this shift will be in a position to be leaders in the field and reap financial rewards, while those that do not invest in decarbonization may be left behind. The conditions for cutting carbon emissions in business are better than ever, and early adopters will be rewarded for taking action. The global economy is moving towards net-zero emissions, and now is the time to take advantage of the opportunity.
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