The low carbon strategy is the only one that allows firms to protect themselves against the risks connected with climate change.
Companies have been attempting to align themselves with a new shared goal: carbon neutrality, as global warming has become an inevitable topic. A Path of the Cross for those players who have no other option except to cut their emissions in the absence of suitable carbon reprocessing or storage options.
Investing in low-carbon assets is becoming increasingly popular among savers. According to the latest assessment from the High Council for the Climate, released in June, more than 80% of French citizens believe the country would be forced to take significant actions to adapt to new climatic circumstances.
While the European climate goals of carbon neutrality by 2050 are well-known, the actual steps that businesses and governments may take are not.
Companies do not have many alternatives for participating in this massive race against time.
Carbon storage and reprocessing systems are both costly and difficult to put in place. Some firms, such as HeidelbergCement in Germany, have succeeded in collecting CO2 generated when they leave the facility with its Leilac1 project, which was primarily sponsored by the European Union, although this solution can only be used at a low level. extremely close to home
"The first lever that firms must use is to reduce their emissions by collaborating with their co-contractors and sub-contractors," says Stéphane His, a consultant who specializes in low-carbon strategy implementation.
The low carbon strategy is the only one that allows firms to protect themselves against the risks connected with climate change, similar to the physical risk in the case of a natural disaster or the risk of transition if the market changes while the company is unable to adapt.
“Some firms opt to take the lead and foresee changes, particularly regulatory changes, rather than enduring them, like Tesla on the electric car market,” adds Stéphane His.
To decrease your carbon footprint, you must first measure it to determine the major sources of emissions. However, moving to a green energy provider will not be enough to attain carbon neutrality!
“Businesses must consider the long term and consider whether the product or service they are providing will be relevant tomorrow. It's potentially frightening, but it's also important for many of them who have established know-how and will need to grow it, says Anuschka Hilke, director of the finance program at I4CE, the Institute for Climate Economics.
Those who wait too long to make a change risk having their value plummet... However, the adjustment will be difficult. Some businesses prefer to offset rather than reduce their emissions to avoid having to revamp their company strategy and examine all of their operations.
This approach frequently entails funding tree planting, although it is far from miraculous. "The globe isn't big enough to plant enough trees to offset all our greenhouse gas emissions," says Anuschka Hilke, who believes that this approach may offer corporations a false sense of action by deflecting attention away from the real issue, which is decreasing their own emissions.
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How dependable are low-carbon investments?
More and more asset management firms are offering low-carbon investment solutions, with some even going so far as to assess portfolio alignment with European climate goals. With varying degrees of accuracy.
“At this time, the alignment measurements are not comprehensive, and the findings may change substantially depending on the approach used,” Anuschka Hilke adds. Despite its unreliability, this indicator is important for low-carbon fund managers since it helps them to identify the poorest performers and provide their portfolio general direction.
A work that financial experts have been compelled to undertake in any event since the implementation of the Climate Law, which mandates the calculation of the portfolio's alignment with the Paris Agreement's goal of reducing global warming to 2 degrees Celsius.
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