The ROI for sustainability has never been clearer

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Dear Business Leaders,

We are in a period of economic, regulatory and political uncertainty, the likes of which we haven’t seen in the recent past. It is an especially tough time for sustainability teams, which are faced with shrinking budgets, an environment of increased backlash and deregulation.

For too long, sustainability has been viewed as a line item rather than a strategic driver of business growth. That perception must change - because the numbers tell a different story. The return on investment for sustainability is undeniable because we have the data to prove it.

The 'climate pullback' narrative is not true but the disclosure data is

Despite recent media narratives suggesting a pullback from climate commitments, the reality is quite the opposite. 84% of public companies are maintaining or accelerating their climate targets, according to PwC’s Second Annual State of Decarbonization Report. The report also highlights that:

• More companies than ever are making commitments—over 4,000 companies reported through the Carbon Disclosure Project (CDP) in 2024, a 9x increase in just five years.

• Ambition is growing—37% of companies are increasing their climate goals, while only 16% are scaling back.

• Low-carbon innovation is thriving—83% of companies are investing in eco-design and sustainable R&D, because products with sustainability attributes drive 6% to 25%+ higher revenue than conventional alternatives.

Commitments persist through leadership changes—the survey found that climate commitments stick, even if leadership changes.

Companies investing in decarbonizing are witnessing significant gains. 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.

The ROI of investing in sustainability is measurable and valuable

At CO2 AI, we have measured the ROI of investing in a sustainability platform firsthand, across our enterprise customers. I want to share some of these data points with you below:

1. 300% ROI in the first year

Traditional emissions tracking is resource-intensive, requiring teams to manually collect, verify, and consolidate data from multiple sources—spanning suppliers, operations, logistics, and beyond. AI-driven platforms streamline this process by automating data ingestion, standardizing formats, and continuously updating emissions factors. thereby reducing errors and improving accuracy. This cuts operational costs, allowing sustainability teams to shift their focus from tracking to strategy.

The result? A 300% return on investment within just one year, driven by efficiency gains, cost savings, and faster decision-making.

2. 70% time savings in emissions tracking

Companies often struggle with fragmented sustainability data spread across spreadsheets, ERP systems, and supplier reports. Gen AI solutions can help large corporations obtain faster and more accurate emissions data. Our proprietary Gen AI solution analyzes millions of lines of corporate activity data to match individual Emission Factors (EF),  from a world-leading database of over 110,000 factors. Using a refined version of Retrieval-Augmented Generation (RAG) that leverages vectorial searches through multiple embedding models, CO2 AI can find and match emissions data with unprecedented speed and accuracy.

• Speed:  Build a baseline in hours, versus months previously.

• Accuracy: Each line of activity is matched with the most relevant EFs from an extensive database.

• Confidence: Automating data sanity checks reduces the risk of manual errors.

• Scalability: No limit on the number of activity lines analyzed.

• Cost efficiency: Only one AI engineer is required versus a large team of experts typically needed for manual categorization.

By reducing manual effort by 70%, sustainability teams free up time to focus on implementing decarbonization initiatives rather than getting bogged down by compliance paperwork.

3. 60% emissions reductions through granular insights

One of the biggest hurdles in corporate decarbonization is data blind spots—without granular insights, companies struggle to prioritize impactful interventions. Companies leveraging AI to improve emissions visibility have identified pathways to cut up to 60% of their emissions, often unlocking cost-saving opportunities along the way.

Take the case of our customer Reckitt, a global leader in health, hygiene, and nutrition:

Reckitt used CO2 AI to target their scope 3 carbon emissions, bringing emissions to a product-level for more than 90% of their product net revenue.

This enabled them to target key raw materials, both ingredients and packaging – 25 materials comprise around 50% of their total scope 3 carbon. One brand shifted from using 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.

Overall, Reckitt obtained precise emissions data for each of its 25,000 products, improving the accuracy of its emissions footprint by 75 times — moving from 333 representative products to 25,000. This data has revealed new ways to reduce emissions by 2030 and significantly contribute towards their Net Zero target.

The bottom line?

Sustainability is not a compliance exercise—it’s a business driver. It impacts your business growth and your bottomline. The companies that recognize this and act now will be the ones to seize competitive advantage, unlock financial gains, and future-proof their business models.

The cost of inaction is too high so which side of history will you be on?

This article is also published on CO2 AI. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.