Three ways businesses can lead the transition to a low carbon economy

(Eco Business, 22 May 2019) Businesses that innovate towards a circular or sharing economy are predicted to grow from $14 billion in 2014 to $335 billion by 2025. How can companies unlock the economic benefits of low carbon growth?

More businesses are recognising the reality of our changing climate. As of May, 553 companies collectively representing more than a $10 trillion market cap have adopted emissions-reduction targets. These targets are in line with what the science says is necessary for preventing the worst impacts of climate change.

These actions aren’t just good for the climate. Research shows they can be good for companies’ bottom lines.

The New Climate Economy’s 2018 report found significant economic benefits available to the private sector in the transition to a low-carbon economy. For example, companies in the CDP Climate Leadership Index, made up of companies taking the strongest climate action, outperform their peers in stock market value and financial performance.

Achieving the 17 Sustainable Development Goals—which include clean water, clean energy, sustainable cities, climate action, responsible consumption, reduced inequality and more—could open a market opportunity of $12 trillion by 2030.

Still, while businesses are starting to capitalise on low-carbon opportunities, they’re leaving many benefits on the table. Here are three ways businesses can unlock the economic benefits of low-carbon growth:

1. Reform business practices

First, companies can build their competitive advantage early and benefit from the increased economic productivity associated with “circular” business models. Revenues from innovative business models based on a circular or sharing economy are expected to grow from $14 billion in 2014 to $335 billion by 2025.

Circular economy approaches can offer greater value overall. For instance, companies can engage in the global plastic recycling market, which is projected to grow at 6.5 per cent annually from 2017 to 2023. This market will be worth almost $54 billion by 2023, with a significant boost for jobs–65,400 new jobs could be created in the EU alone by 2025.

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Eco Business, 22 May 2019: Three ways businesses can lead the transition to a low carbon economy