Business and the environment between costs and opportunities

The old diatribe as to whether sustainability, and even before that the attention of companies towards the environment, is an opportunity or a cost is an issue that has come back plastically to the public's attention as a result of the recent regulations on the Carbon Border Adjustment Mechanism (Cbam), which hinge well on the wake of the continuous denialist statements coming from overseas. It is quite clear that the common perception of the question leans heavily in favour of the cost (perceived as a tax), rather than the opportunity, especially at a time of heightened geopolitical tensions.

One can certainly discuss the quality of the new regulations and the new obligations they impose on companies. However, if we want to have a balanced and responsible approach to the subject, we must take a few aspects into account. Firstly, regulations must be analysed. For example, the Cbam, which became operational in recent weeks and was immediately the subject of intense debate, provides for a cost of only 2.5 per cent of the full value of the certificates to be purchased for CO₂ emissions incorporated in imported goods for this year - a quota that will gradually increase to 100 per cent in 2034 - thus giving companies time to optimise costs and adapt. Secondly, European climate change regulations are not an end in themselves but contribute to the achievement of an emissions reduction target, so they should be seen as a whole. Thirdly, the regulations themselves are inspired by a vision in which the fight against climate change becomes, sooner or later, a global goal and priority. Therefore, this 'problem-solving' role that the European Union has given itself (and is playing) could, if well managed, create the basis for a technological competitive advantage for European companies that will have a positive impact on their development path.

These considerations bring us back to the main topic, i.e. whether we really want, at a political level, to work in the direction of mitigation of environmental impacts and, in parallel, climate adaptation. The awareness of the various social stakeholders on these aspects is growing, so that the need to combat the causes (emissions) and not simply the effects (land degradation) is becoming an accepted fact. But the still unresolved question is: is carbon mitigation an issue worthy of relevance and responsibility for current generations? Or is it a tax to be left to our children?

This is the question that many companies have asked themselves and which has led them to take up this issue. And not out of a purely social or philanthropic fact, but one of pure convenience; because it is true that efforts towards reducing carbon emissions represent an investment that is in some cases important for a company, but it is also true that these efforts are at the same time a great opportunity to revise the company's business model and its competitive positioning. For an increasing number of entrepreneurs, the 'carbon challenge' has therefore become the incentive to project the company more successfully into the future. Using the example of Cbam, according to iSustainability's simulations, a company importing 1,000 tonnes of steel per year can incur up to more than 200,000 euro per year for certificates if it uses the standard values set by European regulations. Collecting and using real emission data, the same cost drops to around EUR 160,000, a saving of EUR 48,000 each year, import volumes being equal. On larger imports, this differential grows rapidly, translating into hundreds of thousands of euros in avoidable extra costs for medium-sized companies. Added to this is a further level of risk related to non-compliance: the Cbam regulation provides for penalties of up to EUR 500 per tonne of CO₂, depending on the seriousness of the violation: from incomplete declaration to import without authorisation. According to our estimates for large industrial groups, the total exposure - between extra costs and penalties - can be in the order of EUR 1 million. The only way to prevent the Cbam from becoming a factor in the loss of competitiveness is to govern the mechanism proactively, turning the regulatory obligation into a management lever. The real discriminator will not be between those who pay and those who do not, but between those who are able to document, plan and optimise, and those who instead will suffer the system. A path that, if started in 2026, can make a difference in the coming years.

Ceo iSustainability