Reducing Greenhouse Gas Emissions: The Benefits for Businesses

To combat global warming, European countries have adopted ambitious goals: to reduce greenhouse gas (GHG) emissions by at least 55% by 2030 and to achieve climate neutrality by 2050. For businesses and organizations, contributing to the achievement of these goals offers several benefits.

Photo of an industrial site surrounded by vegetation to illustrate the reduction in greenhouse gas emissions

Why embark on a decarbonization initiative?

Decarbonizing one's value chain is not just an environmental challenge: it is a key factor in competitiveness on many levels.

Financial: Reducing reliance on fossil fuels and lowering energy consumption means being less dependent on energy costs—an aspect that is all the more strategic given the high volatility in energy prices that characterizes energy markets.
Regulatory compliance: Carbon footprint assessments are mandatory for all companies with more than 500^employees.¹ In addition, certain companies are subject to carbon quotas (the European Union Emissions Trading System (EU ETS)). Finally, companies that import goods from outside Europe must comply with the Carbon Border Adjustment Mechanism (CBAM).
Resilience: Diversifying one’s energy mix is an asset in terms of energy independence, particularly by reducing reliance on fossil fuels, most of which are imported.
Customers: Companies that can demonstrate the carbon performance of their products and services gain a competitive advantage.
Investors: An increasing number of them are making their loans contingent on meeting an annual greenhouse gas emissions reduction target. The same is true for insurance companies, which have tightened their ESG criteria when calculating premiums.
Employees: A company that takes action to reduce its impact on the climate (and, more broadly, the environment) and incorporates these issues into its business model will find it much easier to recruit and retain its workforce.

¹ Carbon footprint assessments are also mandatory for local governments with populations of more than 50,000 and public organizations with more than 250 employees.

Take stock of your decarbonization challenges

What is the EU ETS?

The European Union Emissions Trading System (EU ETS) is the world’s largest greenhouse gas (GHG) emissions trading system.

Launched in 2005 to combat climate change, the program covers the energy and industrial sectors, supplemented by aviation, maritime transport, the service sector, and road transport (EU ETS 2).

Each year, companies in these sectors are assigned a GHG emissions cap, measured in metric tons of_CO2, that they must not exceed. If they do not reach this cap, they can sell their allowances to other covered entities through carbon markets: whether through auctions or over-the-counter trading, the EU ETS is based on this cap-and-trade mechanism.

To encourage participants to reduce their greenhouse gas emissions, the European Union is gradually lowering the permitted emission caps: this makes it more advantageous for companies to invest in decarbonization rather than purchasing the right to emit beyond the cap (known as “EUAs,” or European Union Allowances).

Decarbonization: A 360° Approach

Decarbonization refers to the set of measures and techniques to be implemented to reduce emissions of carbon dioxide and other greenhouse gases.

Since a company is the sum of multiple activities, the sources of these emissions will be just as diverse: freight transportation, employee and customer travel, energy consumption, purchases of goods, use of products throughout their lifecycle, end-of-life product processing, waste, and more.

This is why a decarbonization initiative always requires the involvement of a wide range of business units, departments, and employees.

This is one of Maliro’s distinctive features: our projects often involve complex initiatives and/or those requiring a high degree of coordination. Our expertise in decarbonization, energy, and procurement enables us to manage projects that span these areas. For example, managing European emissions trading schemes, the Carbon Border Adjustment Mechanism (CBAM), decarbonizing energy procurement, and grant applications are all topics that require this broad range of expertise.