5 lessons on decarbonization learned from working with corporates

Over the past five years, a slow but persistent change has shaped how we talk about sustainability. Business leaders no longer see sustainability as a compliance checkbox, but rather as a strategic driver of business growth.

Decarbonizing has become a business imperative, and more and more companies are realizing the value in it. However, it is a complex and lengthy process which requires alignment across multiple departments.

Having now worked with global enterprises such as Reckitt, Symrise, General Mills and others, across different industries, I’ve seen firsthand how climate ambition turns into action – or doesn’t.

Here are five lessons drawn from sustainability transformations that I have personally led with global corporations, with the hopes that it’ll help others in their process of transformation.

We can’t reduce what we cannot measure. The visionary leaders I have come across are those who have focused on shifting from measuring-for-reporting to measuring-for-decision-making.

Take, for example, Reckitt, a global leader in health, hygiene and nutrition with a revenue of £14.2 billion ($18.9 billion) in 2024. Reckitt’s team was motivated to acquire detailed insights into emissions per product, based on actual operations, with a high level of granularity.

In 2023, Reckitt collected more than 300,000 data points to refine its baseline. One of their brands shifted from using only 18 representative products to 2,190 unique items, which enabled them to quadruple the number of emission factors used, paving the way for targeted action with suppliers or ingredients.

Unless you can measure your carbon footprint with granularity and precision, both at the corporate and product level, you can’t take targeted, high-impact action. So, the first step towards any meaningful change is to build your data foundation and strengthen your capabilities to measure your activity-based emissions.

I was in a meeting with a sustainability lead from a large chemicals company a couple of years ago, and he told me, “We’ve already hit our carbon target for the year – just by switching to green electricity contracts across our European sites.”

It was impressive and I congratulated him. Then I asked, “So what’s next?” He paused. He didn’t seem to have a concrete plan for the next steps.

The company was tackling low-hanging fruit to drive quick, high-visibility wins, but there was no overarching plan, with a clear connection to supplier engagement, product-level footprinting and a long-term decarbonization roadmap. A year later, they were scrambling to respond to new regulations and customer pressure for product-level data with no real foundation to build on.

On the other hand, let’s look at the case of Symrise, a global supplier of fragrances and flavours, cosmetic active ingredients as well as functional ingredients. They successfully demonstrated the value of having a long-term vision.

Symrise is moving from computing product carbon footprints (PCFs) manually to a replicable and auditable computation engine. Thanks to the artificial intelligence (AI)-powered product footprinting technology, they will be able to scale the number of PCFs to thousands per year. Most importantly, they have a clear idea about how this innovation fits into their broader, strategic vision for sustainability.

Activities are to be matched with conversion factors (emissions factors or EFs) to be translated into carbon. An emission factor gives the relationship between the amount of a pollutant produced and the amount of raw material processed or burnt. There are discrepancies between emission factors depending on which library of EFs you use. You should use the same EF rule matching year-on-year and try to use consistent datasets each time.

AI enables us to associate the most precise individual EF with the activity, down to the production country or processes used. Besides precision, it also unlocks massive cost-savings.

Using AI, you can scale your product footprint calculation at a fraction of the cost it takes to manually do so. We calculated with our customers and found that on average, the cost of calculating product footprint can be brought down from €1,075 ($1,239) per stock keeping unit (SKU) to €53 (£61) per SKU, using AI computation.

It has unlocked tremendous efficiencies in the carbon accounting process by enabling enterprises to collect, measure and report data at scale, with more precision than was ever possible before.

AI's role in the climate transition and how it can drive growth is no secret. I can confidently say that it is one of the biggest enablers of corporate climate action.

Chief sustainability officers (CSOs) that only focus on sustainability without wearing a business hat will find less success with their executive board. This is why we are seeing a trend in CSO roles sitting at the intersection of sustainability, finance, strategy, public affairs and so forth.

Unless you make a compelling argument about how your sustainability projects will impact the business's bottom line, you will find yourself isolated in the boardroom.

Neil Russell, who until recently was the chief administrative officer at Sysco, had previously held roles such as interim chief financial officer and senior vice president, corporate affairs and chief communications officer at the same company.

This trend leads me to believe that to make budgets move, you will need to demonstrate the return on investment (ROI) of sustainability at every stage to your executive team. To be able to make those arguments, you need the right data to forecast the impact on business growth and revenue (see lesson 1).

My biggest takeaway is that decarbonization is not just a social and environmental imperative; it is a key business advantage.

In our annual carbon survey with Boston Consulting Group (BCG) last year, we found that 25% of companies reported annual decarbonization benefits worth at least 7%+ of sales. This equates to about $200 million in net benefits after investment.

You must be wondering, “How can it be such a critical business driver when there is a global shift in corporate climate action, with companies pulling back from their commitments?”

Well, this narrative is not quite true. According to PwC’s Second Annual State of Decarbonization Report, 84% of public companies are maintaining or accelerating their climate targets. The report also highlights that:

The financial advantage of embedding sustainability in the long-term business plan cannot and should not be ignored.

Do not treat your company’s sustainability performance as a compliance exercise – it’s a real business driver. Building resilient and sustainable supply chains can help future-proof your organization in the face of rising climate threats, so you must act now.