Building a Business Case for Decarbonisation

One of the most challenging jobs shared by sustainability professionals across the board is to increase buy-in for decarbonisation on all levels of the business – and a huge part of this is creating a business case for net zero. A recent report by EY suggests that only two-thirds of businesses have climate action plans. Companies are making progress, however Scope 3 emissions remain the toughest – and most expensive – to get a handle on. Value chain emissions represent around 90% of a company’s total footprint and are difficult to address due to challenges in engaging stakeholders, high reduction costs and shortages of highly trained experts.

However, not having buy-in from the supply chain can create additional hurdles, such as insufficient climate reporting data. This can lead to poor operational decisions and negatively impact  a business’ overall adaptability and resilience.

This can often create hesitation at an investor level. A recent MIT report found that over half of businesses struggle to justify emissions reductions due to unclear returns on investment, while EY’s analysis highlights the financial consequences of delay, estimating that climate inaction could reduce annual revenues by up to 15%. This underlines the need for sustainability leaders to create a strong business case for climate action to manage long-term risk and avoid revenue losses.

The risks of inaction
There are incentive-based ‘carrot’ approaches that centre around value creation rather than risk avoidance. As customers, investors and partners increasingly demand evidence of low carbon performance, organisations that can demonstrate tangible progress are better positioned to retain trust and win new business. In addition, credible decarbonisation strategies can help build investor confidence by increasing transparency and reducing future exposure to carbon-related costs.

Crucially, this incentive-led approach gives the impetus to establish a robust business case for climate action. By linking decarbonisation to outcomes such as revenue resilience, access to capital and strategic relevance in a lower-carbon economy, the focus shifts away from ambition alone towards measurable value creation. While incentives can motivate action, many organisations only move at pace when faced with the financial and operational consequences of inaction. Running a business is ultimately about the bottom line and that is where the stick comes in. 

Inaction exposes companies to growing financial, legislative and competitive risks. The impact of delayed action is felt differently across functions. For leadership teams, postponing decarbonisation increases financial, reputational and regulatory exposure while competitors move ahead. For finance teams, rising carbon costs and penalties make inaction increasingly expensive, particularly as tax incentives and internal carbon pricing mechanisms become more widespread. For legal teams, regulatory and compliance risks are mounting as reporting requirements expand and enforcement intensifies. For procurement, insufficient progress on decarbonisation can weaken supplier resilience, increase disruption risk and reduce negotiating leverage. For IT, the longer action is delayed, the harder it becomes to address gaps in data quality, infrastructure and analytical capability.

Ultimately, the most successful approach to decarbonisation balances both push and pull forces. While the ‘carrot’ illustrates long-term value, the ‘stick’ highlights the escalating cost of inaction. Integrating these perspectives relies on having full visibility into the overall emissions and progress across the business, enabling stakeholders to identify opportunities and mitigate both short- and longer-term risks.

Building a business case
Once you’ve identified the key stakeholders that you’ll need to get on board, you need to be selective with your arguments and tailor them to each stakeholder’s priorities and potential risk points. The same reasoning for IT may not land for procurement, while the legal team might have a slightly different perspective than the CEO.

At this stage having a more centralised approach to sustainability data can play an important role. By moving away from fragmented spreadsheet-based reporting, it becomes easier to meet reporting requirements while ensuring data is relevant and actionable for different functions.

IT departments focus on enhancing data integrity, facilitating system integration and filling the gap in emissions reporting. Whereas procurement teams focus on supplier performance, improving visibility into Scope 3 emissions  and addressing  emissions-related challenges with suppliers. 

Furthermore, decarbonisation isn’t just about compliance, it also represents a  revenue growth opportunity. The strongest business cases connect decarbonisation to financial value. At the macro level, what’s good for the planet is good for business. In order to address the concerns around the costs of decarbonisation, quantifying the business benefits and cost savings will help make the business case – especially for leadership and finance teams. Measuring metrics such as carbon cost savings, revenue growth and compliance readiness, will help build a case for decarbonisation by painting a more vivid picture of the short- and longer-term benefits. 

Creating an action plan
No business case is complete without a clear implementation plan, which outlines how the decarbonisation strategy will be implemented over time. This plan should define specific targets and explain how they will be achieved.  It should include the data needed, how it will be collected, and what technology or expertise will be brought in for data management, collection and analysis. It should also outline how suppliers will be engaged and supported in reducing their emissions, as well as  how internal stakeholders across functions will be involved to make the plan a success.

Prioritising action over perfection
Delaying decarbonisation not only increases risk but also results in missed opportunities for value creation and competitive advantage. For this reason, businesses cannot afford to wait for perfect data or fully mature plans before starting to take action.  

Even small, early steps can deliver meaningful progress, particularly in the beginning stages of implementing a decarbonisation plan. Prioritising action over perfection enables companies to build momentum, strengthen capabilities, lead their industries, protect and grow profits and stay ahead of shifting regulations.