Driving profitability through decarbonization
Decarbonization isn’t just about reducing emissions—it’s about building a more profitable and future-ready business. Rising energy costs, evolving regulatory requirements, and increasing demand for sustainable practices from partners and customers all underscore the financial rationale for reducing carbon footprints.
Investing in sustainable practices—such as energy-efficient equipment, waste reduction, and optimized materials usage—can lead to significant cost savings. Additionally, organizations that embrace decarbonization are better positioned to attract eco-conscious consumers and partners, while mitigating risks associated with carbon taxes and environmental regulations. Profitability and sustainability are no longer at odds—they are intrinsically linked.
To this point, I’m always asked in our leadership meetings: What are the trends in the next five or 10-year timeline that we need to get ahead of? How do we prepare ourselves to ensure we are agile and capable of future proofing our business?
These are very valuable questions, that should be considered by management and ownership of any business. However, my immediate response tends to always be: “Why are we asking about what will change and how we will prepare?” We don’t know the future, but it is good to consider it.
Alternatively, I pose a different question, “What will never change for the next three decades? These are the questions we should focus on because we can put the greatest focus and influence on those consistencies. Following deliberation, we always find there are two trends that will never change no matter what the external or internal environment may look like. They are the following:
1. No one will ever approach your collision centre and say thanks for the great work. I just wish you charged me more. If you charged me more, I would have been happier.
2. No one will ever approach your collision centre and say thanks for the great work. I just wish you took longer to complete the repair. If you took longer to complete the repair, I would have been happier.
When we consider these two paradigm consistencies, we review our operational plans and determine how we ensure today that we are building foundations to excel at delivering these values to our customers, for the short and long term? We always find decarbonization sits at the core of all our solutions. The following are a few examples of the philosophy Simplicity Car Care guides our operational strategy on achieving sustainability from an environmental and financial perspective:
1. Leveraging Technology for greater Repair vs Replace opportunities
2. Sustainable Procurement through the Three C’s of Procurement (Cost Management, Client experience and Carbon Reduction)
3. Cultural Integration
4. Scorecard the Business Case
In addition to the Simplicity network realizing reduced cycle times, enhanced Net Promoter Scores and increased market share during a period of declination in claims, it is important to look at other examples for proof of the ROI in ESG. Our operations team has discovered the following business cases during the conceptual design and change management plan when sharing the strategy with our stakeholders. The evidence is very compelling:
1. Sustainability ROI reports sponsored both Campbells Soup and Verizon. It was discovered that ESG initiatives were projected to deliver an increase sales revenue up to 20 percent and affect variations in customer satisfaction by 10 percent or more. It can also reduce the company’s staff turnover rate by as much as 50 percent, according to Alpha Sense.
2. In addition, Alpha Sense found that its studies on the S&P 500 portfolio produced the following results: The study identified that 79 percent of U.S. companies in the S&P 500, “earn a higher return on their carbon reduction investments than on their overall corporate capital investments.” It also found the highest returns were energy efficiency improvements that earned an average return on investment of 196 percent with an average payback period of two to three years.
These reports clearly indicate that investments in decarbonization are prosperous for all stakeholders in the macro economy, including our most important stakeholder, our planet.
LEVERAGING DATA TO DRIVE OPERATIONAL EFFICIENCY
Data is a powerful tool in the pursuit of decarbonization. By measuring energy consumption, material usage, and waste output, we can identify inefficiencies and opportunities for improvement. At Simplicity Car Care, we are leveraging data analytics to optimize processes, reduce energy costs, and enhance resource management. Data-driven insights allow us to benchmark performance across our network, ensuring best practices are shared and scaled. This continuous feedback loop helps us stay agile, making informed decisions that enhance both operational efficiency and sustainability outcomes.
EMPLOYEE ENGAGEMENT: A KEY TO SUCCESS IN DECARBONIZING
No sustainability initiative succeeds without the commitment and engagement of the people who bring it to life. Our teams are our greatest asset, and empowering them with the knowledge, tools, and motivation to champion decarbonization is critical. We focus on embedding sustainability into our corporate culture, providing training programs, and creating platforms where employees can share ideas and innovations. Recognizing and rewarding sustainable practices fosters a sense of ownership and pride, transforming sustainability from an abstract goal into a shared mission.
In addition, given that decarbonizing reduces consumption costs, we have identified unique opportunities to provide employees enhanced short-term reward strategies i.e., quarterly bonuses), through gain sharing programs.
One example is the waste of materials applied in the repair process. We establish we want our Paint and Materials budget to be a loaded 5 percent of sales. We monitor and track the costs verses the sales budget daily, with weekly reviews. At the end of the month, if the team can take our costs below 5 percent of sales, we take the data and share it with all the staff in the following distribution: 50 percent to the paint team, 25 percent to the body repair team, 15 percent to the detailing department and 10 percent to the front admin. The following is an example of a $2 million dollar facility annually.
This example demonstrates how tying in sustainability to the short-term reward strategy aligns employees with not only the profitability of the repair centre, but also, its sustainability efforts. The staff would generate a bonus pool of $3,150 per quarter. This example can be applied to any cost of goods sold or semi fixed cost centres.
SUSTAINABILITY AS A COMPETITIVE ADVANTAGE
Consumers and partners are increasingly making decisions based on sustainability credentials. By embedding decarbonization into our business strategy, we differentiate Simplicity Car Care as a leader in responsible and future-focused practices.
This approach not only enhances our reputation but strengthens partnerships with insurers, fleets, and OEMs who prioritize sustainable supply chains. In the long run, sustainability isn’t just a competitive advantage—it’s a necessity for growth and market leadership.
CONCLUSION
Decarbonization is a complex but necessary journey—one that requires strategic thinking, data-driven decisions, and a collective commitment to change. At Simplicity Car Care, we view this as more than an environmental obligation; it is a pathway to operational excellence, profitability, and long-term success.
As leaders in the collision repair industry, we have both the responsibility and the opportunity to shape a more sustainable future. The steps we take today will define our industry’s success tomorrow. Let’s embrace this challenge together.
