How to turn carbon data into your biggest competitive advantage

As more companies surface carbon data for regulatory purposes, some are seeing the strategic opportunity this data can offer.

With demand for low-carbon materials rising, traders that can strategically leverage carbon data are gaining a significant edge. By incorporating real-time emissions data into procurement, sales, and marketing processes, companies can move beyond simply reporting on their own carbon footprints and instead proactively seek out low-carbon products, tap into the growing market for transparent, sustainable materials, and charge a ‘green premium’ to customers.

Here, we explore how businesses can turn carbon data into a valuable tool to unlock new revenue streams and enhance market positioning.

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This article is an extract from our free whitepaper:

From Compliant to Competitive: How Metals and Energy Companies are Turning Carbon Data Into a Market Advantage

The strategic opportunity for carbon data

Beyond their own decarbonization efforts, companies can now also be strategic about seeking out low-carbon materials and capitalizing on customer demand by charging a ‘green premium’ for transparent, low-carbon products.

The carbon data that a company uses for compliance purposes can become a competitive advantage when used at the right time and place. Access to accurate carbon data at the procurement or quoting stage, like that which CarbonChain provides, means companies are no longer ‘winging it’ when attempting to reduce emissions — they now know where to turn for green alternatives. With no lag time between transactions and emissions data, companies can use carbon data to inform day-to-day procurement decisions, transforming carbon data from a static and retroactive report into a strategic tool for decarbonization.

Supply side

On the supply side, companies should be thinking about what it means to achieve ‘green procurement’, getting a detailed understanding of the supply landscape for low-carbon products. Rather than simply gathering data after a purchase, companies should use upfront carbon data to inform procurement decisions. This may involve balancing price and carbon intensity, or signing long-term contracts to secure high volumes of attractive, low-carbon commodities.

“In the years to come, the value from green premiums will be accrued by those who make quick and bold decisions.

Understanding where green premiums exist today and where they will emerge ... can help materials players capture benefits for sellers and secure supplies of low-CO₂ products for buyers.” — McKinsey

Already, forward-thinking commodity traders are using cutting-edge tools like dynamic carbon quoting to evaluate the carbon profile of the products available to them — efficiently and at a large scale. The same data used to inform procurement decisions can also be provided to customers in flexible and easy-to-understand reports, allowing customers to understand the carbon impact of their potential trades and choose the products that best fit their needs before executing trades.

Demand side

Many companies are likely already feeling customer-led pressure for carbon data, and tools like CarbonChain allow companies to get ahead of it. “If companies are starting to get requests for emissions transparency,” says Stirling-Moffet, “demand for lower-carbon products is not far away. Companies should be incorporating carbon data into their procurement and sales processes to stay ahead of the curve and start building a competitive advantage today.”

“Newly emerging low-carbon commodities require the commodity traders’ skillset (commercial nimbleness, access to financing, ability to operate under uncertainty, ability to structure novel client-centric solutions) to thrive and the commodity trading community is likely to take a significant role in supporting the growth and accessibility of green commodities. Trading of low-carbon flows will be an important part of their revenue stream and a new set of frontier opportunities will arise offering ample opportunities to continue generating profits.” — Oliver Wyman

Traders that can sell materials that meet specific carbon thresholds can allow traders to win new client deals, even when bidding higher than their competitors, who may not have the low-carbon or carbon-transparent products to be able to compete. This is the ‘green premium’ in action.

“Using CarbonChain was smooth and frictionless. In just one month, they helped us extract all the raw data from our systems, produced a clear, insightful emissions report, and helped us deliver the information to our customer in the format required.”

Frederic Meeus, Global Head of Naphtha and LPG, Gunvor

Traders and manufacturers alike should be thinking about bringing their existing carbon data from the back office to the front office, recruiting their sales and marketing teams in order to turn carbon data into a competitive advantage. This might include activities such as segmenting customers based on their willingness to pay higher rates for low-carbon products or products with life cycle assessments (LCAs) or Environmental Product Declarations (EPDs). Green materials certificates may also help sales and marketing teams here.

‍

‍FREE DOWNLOAD

This article is an extract from our free whitepaper:

From Compliant to Competitive: How Metals and Energy Companies are Turning Carbon Data Into a Market Advantage

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