Decarbonisation summer series 04. Demonstrate ROI

Welcome to the final part of Verco's summer series on overcoming the cost of decarbonisation. This part focuses on making the business case for decarbonisation and the need for a clear return on investment.

Part 04. Demonstrate ROI

Build the business case

A clear business case is essential to drive decarbonisation. It overcomes barriers

relating to costs, competing business priorities and a wider geo-political context that is creating uncertainty around things like energy pricing and tariffs in the US.

The ingredients of a strong business case include:

A clear why that explains the risk or opportunity you’re responding to.
Tangible impacts which evidence the various benefits from a project.
The how, capturing the cost and resource requirements to deliver the project.

Win with a strong ROI

ROI is the red thread that runs through all of the elements of a business case. When making the business case for decarbonisation, it’s important to think broadly to maximise the likelihood of your project getting the green light.

The layers of ROI:

Financial payback: the obvious place to start is how soon you will recover the investment; 0-2 years is the sweet spot, 3-5 years is more realistic for anything other than quick wins, and 5+ years is a tough sell, but not impossible.
Cost considerations: cost savings are king, the trickier proposition is the CAPEX/OPEX trade-off. Are you proposing to increase CAPEX to reduce OPEX, or minimize CAPEX and face higher OPEX?
GHG savings: GHG reductions can relate directly to cost savings (e.g. reduced energy consumption). Another aspect of your ROI can be how you’ll avoid future costs and locked-in emissions, for example when replacing equipment and technology.
Risk mitigation: although it can be harder to quantify with certainty, projects that relate to sourcing and the wider value chain can show how they mitigate risk and create value. Illustrate impact by extrapolating current cost/pricing against future scenarios.
Trust and engagement: qualitative benefits might not be the headline in your ROI but projects that deliver engagement/training with key stakeholders should capture the value of stronger relationships and capacity building.

Webinar series: Supercharge your net zero journey

Whatever stage your decarbonisation journey is, our recent webinar series here provides insights into how you can best get a holistic view of – and predict the impact of – your projects with MyVerco, deliver impactful projects and deal with the complexity of Scope 3 projects.

How are you overcoming the costs of decarbonisation?

Verco has access to hundreds of costed decarbonisation projects, with evidenced ROI and OPEX/CAPEX considerations. Whether your priority is optimising obvious topics like energy management or driving action on underutelised decarbonisation drivers like Green IT and digital decarbonisation, we can talk you through the options available to you.

Let me know if you're interested in a call to discuss the right decarbonisation opportunities for your business.