More than four fifths of businesses have reported financial benefits from decarbonisation measures, with some achieving return on investment that exceeds 10% of revenue, a new report by BCG and CO2 AI has found.
The latest edition of the BCG + CO2 AI Climate Survey, which is now in its fifth year, gathered responses from close to 2,000 executives across 16 industries and 26 countries – companies responsible for 40% of global GHG emissions.
‘Despite public signals of retreat, companies are quietly accelerating climate action where it creates business value, generating financial returns and long-term resilience through targeted investments and digital tools,’ the report noted.
Climate momentum
As it found, on the surface, corporate climate momentum appears to be slowing, with just 7% of large companies comprehensively reporting their GHG emissions, 13% having set targets covering all emissions scopes, and one in eight (12%) fully measuring climate risks.
Yet at the same time, most businesses are either sustaining or increasing their climate investments, particularly in areas where climate action aligns with financial incentives or risk management.
Areas in which firms are reaping benefits from sustainability investment include the development of sustainable products in areas such as automotive, appliances, and fashion, where a ‘substantial portion’ of consumers are willing to pay more for sustainable products, the study noted.
Operational savings
Operational savings have also been realised from efficiency gains and resource optimisation, the study found, such as through the introduction of smart metering and making buildings more efficient.
Businesses that have assessed their exposure to climate-related physical and transition risks estimate an average potential financial impact of $790 million by 2030, with those that have already invested in adaptation measures reaping the benefit from doing so.
‘Companies are already seeing the upside of investing in climate adaptation and resilience,’ the report noted. ‘Those actively investing in adaptation are achieving near-term financial gains equal to 1% of revenue. Nearly half of the companies report that their climate risk adaptation efforts generate a return on investment of more than 10%—demonstrating that proactive preparation delivers real and measurable value.’
Climate strategy
According to the study, two tools are increasingly being used to structure corporate climate strategies – internal carbon pricing and transition plans.
Approximately one-third of companies have put a price on carbon emissions, embedding decarbonisation into financial decision-making.
Elsewhere, the adoption of transition plans has increased 5% year-on-year, while 61% of plans have now received board-level approval.
‘Climate transition plans offer clear roadmaps for how organisations intend to meet their goals, complete with interim targets and accountability structures,’ the report noted. ‘Together, these tools represent an important shift from loose aspirations to operationalised climate strategies.’ Read more here.
