Green solutions shore up balance sheets for African firms
Going green is proving lucrative for African firms, with over 40% seeing a direct boost to their bottom lines from decarbonisation efforts.
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by Seth Onyango, bird story agency
African firms have begun to shore up their balance sheets through decarbonisation efforts, with over 40% posting gains in their bottom lines from green strategies.
Despite global progress slowing, Boston Consulting Group’s (BCG) Carbon Emissions report shows that 43% of African firms surveyed are seeing tangible returns from green inititives, well above the global average of 25%.
Financial gains include reduced operating costs, improved energy efficiency, and enhanced reputation, setting African firms apart in the global climate action landscape.
Boston latest surveyed nearly 2,000 executives worldwide, including a substantial number from Africa.
Companies across industries are seeing that investments in sustainability are no longer just a compliance necessity—they are boosting bottom lines.
“Too few companies are seizing the financial gains offered from decarbonization,” said Diana Dimitrova, a BCG managing partner, director, and coauthor of the study.
“By mastering essential foundational actions like measurement, reporting, target setting, and taking advanced steps toward sustainability, these companies can become more efficient, more profitable, and demonstrate a stronger commitment to a greener future.”
This shift marks a critical turning point in Africa, where businesses have historically been underrepresented in global sustainability leadership.
“Notably, 43% of the companies surveyed in Africa reported significant benefits from decarbonisation, which is well above the average of 25% of companies globally gaining value from decarbonisation,” the report states.
African firms are benefiting from decarbonisation primarily through cost-saving measures.
Investments in energy-efficient technologies, waste reduction strategies, and renewable energy sources reduce operational costs while enhancing sustainability.
These measures, particularly in energy-intensive industries, are leading to annual financial gains of up to $200 million for some companies, according to the report.
Moreover, African companies are increasingly integrating advanced technologies, such as artificial intelligence (AI), to track and manage emissions.
Firms using AI for emissions reduction were found to be 4.5 times more likely to report significant financial benefits. By automating emissions tracking and improving energy efficiency, AI is becoming a crucial tool for these businesses to capture value from sustainability efforts.
Despite the success stories, the report also highlights areas where African companies lag behind global peers, with only 9% of African firms surveyed are reducing emissions in line with the 1.5°C target set by the Paris Agreement.
While Africa has shown impressive growth in emissions reporting, comprehensive reporting of Scope 1, 2, and 3 emissions—covering direct, indirect, and supply chain emissions—remains a challenge.
Nonetheless, Africa has become the only region to report an increase in comprehensive emissions reporting in 2024.
Seven per cent of African companies now fully report emissions, nearly doubling from last year. This upward trend signals that more companies are starting to take decarbonisation seriously and recognize its financial advantages.
For African businesses, decarbonisation is also providing a competitive edge in the marketplace.
With increasing demand from global investors, regulators, and consumers for sustainable business practices, companies that lead in sustainability are likely to gain market share, build customer loyalty, and attract investment.
The report suggests that these firms are better positioned to thrive in a global economy that increasingly prioritizes environmental stewardship.
For many African firms, decarbonisation is becoming an essential part of their business strategy, not just a regulatory requirement.
bird story agency
