Lowering Businesses’ Carbon Footprint: Adoption of Eco-efficiency Indicators in Colombia and Peru

The Inter-American Development Bank (IDB) released a new report that presents a field experiment informed by insights from the behavioral sciences to help businesses initiate their journey toward lowering their carbon footprint. The intervention involved micro, small, and medium enterprises (MSMEs) in Colombia’s textile industry and Peru’s plastic industry. For this study, BID developed and tested the “Green Tool” to guide companies in creating and monitoring eco-efficiency indicators. The study addresses the critical need for businesses to adapt to the challenges posed by climate change and transition risks, such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), which requires significant adaptations from companies in Latin America and the Caribbean to stay competitive.

Among the key findings of the study, authors highlight the essential role of targeted interventions, mentorship, and the strategic application of behavioral tools in encouraging sustainable practices within the business sector. Moreover, they conclude that the study demonstrates the effectiveness of behavioral interventions in supporting businesses to transition towards lower carbon footprints, showcasing a path forward in the global effort to combat climate change.