Today, sustainability has become a strategic necessity for companies in the modern world. Beyond complying with regulations or responding to consumer expectations, sustainability is now recognized as a key driver of long-term growth and profitability. In an environment where natural resources are limited and pressure to reduce environmental impact is growing, integrating sustainable practices can open up new business opportunities, reduce costs and enhance corporate reputation.
Here are four key practices where sustainability plays a crucial role in companies' profitability.
1. Attracting sustainable financing:
Sustainable financial products, such as green bonds and sustainable investment funds, are designed to attract investors looking to support projects with a positive environmental impact. Green bonds, for example, are debt instruments used exclusively to finance or refinance projects that have clear environmental benefits, such as renewable energy, energy efficiency or sustainable waste management.
Companies using these types of financial products can access a broader and more engaged investor base, which can result in lower financing costs. In addition, by demonstrating a commitment to sustainability, companies can enhance their reputation and strengthen their relationships with investors and other stakeholders.
At Celepsa, in recent years, we have been able to obtain a green loan for more than US$26 million for our Marañón Hydroelectric Power Plant, located in Huánuco, as well as a recent loan linked to sustainability for more than US$100 million for the refinancing of the acquisition of our Santo Domingo de los Olleros Thermal Power Plant, located in Chilca. These actions promote the country's energy transition with the implementation of a greater amount of available renewable energy; in addition to contributing to the related Sustainable Development Goals (SDGs).
2. Carbon markets:
The carbon market is a system in which carbon credits are traded, with the objective of reducing global greenhouse gas (GHG) emissions. There are two types of carbon markets: regulated by governments or blocs of countries that impose limits on GHG emissions, and voluntary; companies or individuals buy carbon credits to offset their emissions, even if they are not required to do so by law. These markets allow companies that have reduced their emissions below required levels to sell their carbon credits to other companies that need to offset their emissions. This system not only incentivizes emissions reductions, but also creates an additional source of revenue for sustainable businesses.
In line with this, we have two projects adhered to the Clean Development Mechanism (CDM), which were developed with the objective of contributing to the reduction of electricity generation emissions in the Peruvian matrix: the El Platanal Hydroelectric Power Plant and the Marañón Hydroelectric Power Plant, which have the capacity to issue carbon credits.
3. Energy efficiency:
Energy efficiency is the optimization of energy use, seeking to obtain maximum performance with the lowest possible consumption and with which companies can reduce their operating costs and emissions. Investing in energy-efficient technologies, such as LED lighting, efficient heating and cooling systems, and optimized manufacturing processes, can lead to significant savings in energy consumption. Companies that are able to operate more efficiently can offer more competitive prices, attract environmentally responsible consumers, and improve their market positioning.
At Celepsa we are committed to efficient energy management. Therefore, we changed and improved the technology of our runners at the El Platanal Hydroelectric Power Plant, increasing the effective power of our plant, thus reducing the frequency of repairs and increasing its useful life from 7 to 25 years to ensure the safety and quality of our power generation.
4. Resilience in the supply chain
The adoption of environmental, social and governance (ESG) criteria in business strategies is key to preventing supply chain risks and strengthening business competitiveness. Companies that fail to integrate these aspects risk facing financial penalties, while those that adopt them gain an advantage with consumers and regulators.
Aware of this, we implemented our Sustainable Supplier Development Program, which has boosted sustainability in 29 strategic suppliers, improving compliance with ESG criteria from 15% to 67%. This approach allowed us to strengthen their governance for an economic value equivalent to S/ 53 million, thus demonstrating that sustainability is an investment that generates direct benefits and enhances the competitiveness of our suppliers.
In conclusion, through innovation in sustainable financial products, participation in carbon markets, investment in energy efficiency and the extension of sustainable practices in the supply chain, companies can transform their sustainability efforts into competitive advantages. These approaches make it possible not only to contribute to the well-being of the planet, but also to strengthen the financial position and ensure long-term sustainable growth.
