Decarbonization 101
Introduction to Decarbonization

Understanding the Importance of Decarbonization

May 28, 2024
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This lesson highlights the growing importance of decarbonization for organizations, driven by regulatory demands, stakeholder expectations, and the urgent need to combat climate change, emphasizing the benefits of carbon reduction programs for trust, transparency, and global sustainability efforts.

Organizations prioritize decarbonization to get ahead of reporting mandates, improve trust and transparency with customers, investors, and other stakeholders, and make necessary contributions to the international effort to fight climate change.

why is carbon accounting important

Investors, customers, employees, and other stakeholders want to know about an organization’s current emissions and its plans to reduce them. Customers or businesses are also looking to their suppliers to decarbonize. In addition to aligning with market pressures, the SEC, EU, Japan, and UK are tightening up reporting requirements on organizations' carbon footprint. 

The 2021 EY Global Institutional Investor Survey found that 86% of surveyed investors said investing in companies with aggressive carbon reduction programs is an important part of their strategy.

Legalities and business goals aside, reducing emissions should be each company’s utmost priority to do their part to reduce global emissions. According to a recent IBM study, 70% of employees find sustainability programs make employers more appealing, and 80% want to help their company reach its climate goals. The data is clear that the world is not on the right track and that it’ll take a combined global effort to avoid the worst. Initiatives like the Inflation Reduction Act (IRA) of 2022 are being implemented to stimulate renewable energy development and support other sustainable initiatives.

Up Next
Key Benefits and Challenges of Decarbonization
In this lesson, we’ll dive deeper into the benefits of decarbonization and the challenges an organization may encounter during its decarbonization journey.