Our relationship with the world around us continues to change on a daily basis. People care a lot more about the impact we’re having on the environment than they did a couple of decades ago, with green schemes, sustainability drives and heightened social pressure to take care of the world we share.
For all businesses, including SMEs, there’s a sense of expectancy to ensure you’re doing everything you can to keep your carbon emissions and other harmful environmental outputs to a minimum. If you run an SME and are unsure exactly how to do that, this guide is here to help.
Whether it’s understanding exactly what kind of impact you’re already having, or the desire to reduce the size of your footprint, we’re here to help you move towards a business model which sees reductions on your impact on the environment.
Understanding your carbon footprint
To be able to address and decrease the size of your carbon footprint, it’s important to first understand exactly what it is and how it can affect your business. Let’s explore that now, as we get to grips with just how important lowering your CO2 emissions can be as an SME.
What is a carbon footprint and net zero?
You’ve probably heard the terms “carbon footprint” and “net zero” before – but how familiar are you with exactly what they mean?
Your carbon footprint is the collective name given to the amount of CO2 which your business produces and releases back into Earth’s atmosphere. In a sense, it defines the amount of damage you’re doing to the environment.
Net zero refers to the balance between the amount of greenhouse gases you put in the atmosphere and how much you actively remove. When what you’re adding to the atmosphere is no higher than what you’re taking out, you’ve achieved net zero.
A lot of businesses will try to reach this benchmark, as it’s a solid indicator that they’re taking their environmental impact seriously.
Benefits of being net zero as an SME
There’s a good chance you want to take a step towards lower carbon emissions for purely ethical reasons. But that doesn’t mean there aren’t also a number of benefits to making the switch from a PR perspective. Here are some of the ways your SME might prosper:
Appeals to employees, customers and partners
Having the ability to shout about your net zero status will naturally make you more appealing to potential employees, customers and business partners. Modern consumers, workers and investors have become keener to buy from and deal with businesses that have made a commitment to becoming greener. This is something which could be a massive help when trying to attract the right kind of attention.
As well as this myriad of benefits, SMEs will also find that switching to a greener way of doing business can also have a positive impact on their bottom line. There are a number of ways reducing your carbon footprint will save you money. These include tax relief and exemptions on things like company cars, as well as saving on the rising Climate Change Levy rates.
Competitiveness vs larger businesses
In a market where you might be competing with companies bigger than yourself, it’s important to take every opportunity you can to get ahead. Positioning yourself as a sustainable or greener alternative to a business you might not be able to compete with financially could make a huge difference amongst consumers.
Enhances image and reputation
Similarly, your general image will be heightened in the eyes of the wider public. People tend to trust organisations that show they care for issues beyond their own personal interests. Becoming net zero is one of the best ways to demonstrate your wider ethics as an SME.
Preparedness for new government policies
With the growing importance of environmental issues at the top of governments priority list, having pre-existing policies in place could safeguard you against any sudden or unexpected regulation changes. This can be incredibly useful in saving you a headache or even substantial fees further down the line.
Carbon footprint statistics in business
While carbon emissions are something we more closely associate with visible output, online and digital companies are just as responsible for how much CO2 they produce. In fact, the internet itself, while seemingly a completely digital entity, contributes to the carbon footprint of a lot of businesses.
SME Today reports that the digital footprint of the internet accounts for as much as 3.7% of all greenhouse gas emissions. Worryingly, these figures are predicted to double by the year 2025.
It might feel odd to associate something electronic and so far removed from the industrial world with carbon pollution, but the internet still relies on a number of real-world factors to make it tick. It’s these constructs which contribute to greenhouse gases.
For example, both manufacturing and shipping, as well as powering and cooling contribute to CO2 production:
Manufacturing and shipping
Computers and smartphones are mass produced, before being shipped off all across the world for use. What’s more, servers are also needed to house and manage the data spread throughout the internet itself. These are particularly bad producers of greenhouse gases.
Powering and cooling
The powering and cooling process of smart devices and computers sees electricity drawn from local grids. The generation of this electricity is done in a variety of ways – some of which (such as coal and nuclear power) will also have a negative impact on the environment.
Even something as trivial as sending an email will see a person contribute negatively from a CO2 perspective. The sending of a message will result in:
Even just viewing a webpage can contribute to greenhouse gases. Every time you view a new page, the energy needed to make it visible accounts for as much as 1.76 grams of CO2 being pumped into the atmosphere.
Reports have found that smaller businesses contribute 6% of the total UK annual carbon emissions. If you consider that SMEs also contribute as much as 52% of the total GDP for the UK, this might sound like a fairly reasonable number.
Despite that, it’s important not to be complacent about carbon emissions. This 6% still accounts for 25.8m tonnes of CO2 being pumped into the atmosphere every year – a total which is itself misleading, as it doesn’t take into account the output of any supply chains who partner with an SME.
Larger businesses in the meantime would contribute up to 8%, while all other sectors accounted for the remaining 86%.
This worked out at a total breakdown in CO2 as:
If you’re worried about the amount of carbon your SME is producing, keep reading to find out what steps you can take to make your impact on the environment that little bit smaller.
Reducing your carbon footprint as an SME
Now you have a better understanding of what a carbon footprint is and how it might impact your business, it’s time to take actionable steps towards lowering yours. Let’s now discuss how to calculate, report and ultimately reduce the amount of carbon you’re sending out into the atmosphere.
How do I calculate my SMEs carbon footprint?
Working out the size of your company’s footprint isn’t an instant process, but it needn’t be excessively complicated either. If you’re confused about how to work out yours, there is a step-by-step advice process you can follow.
As per guidance laid out by the Greenhouse Gas Protocol, businesses are able to measure the amount of carbon they produce by breaking each channel of production down into three core categories.
Scope 1 – Direct emissions
This is the easiest category to collect data for, as it incorporates all the emissions which your company is directly responsible for. That will include commonly used things like:
- Petrol or diesel used by company cars
- Liquified petroleum and any other natural gas which is burned on your site
- Refrigerant losses
Scope 2 – Energy indirect emissions
By contrast, this is the section which focuses on energy outputs which your business does not own or control. That means stuff like electricity, heat and steam which you purchase directly from an energy supplier. In layman’s terms, it will largely incorporate the bills you pay to keep your office, factory or site operational.
Scope 3 – Other indirect emissions
This is arguably the hardest scope to accurately measure, as it needs to take into account indirect contributions from third-party aspects of your business. To give you an idea of what that means, it should incorporate things such as:
- Shipping and distribution
- Your overall supply chain
- The commute of all your employees
- Water supply and treatment
- How customers use your products
Once you’ve gained a better perspective of what you’re measuring, as well as the scope it falls into, you need to start collecting energy usage data from the last 12 months. As your energy bills will naturally rise and fall in accordance with the time of year, this needs to be a general average. The metrics you’ll need to find an average for are:
Once you have all the data, you can make the most of carbon footprint calculators. You’ll simply need to fill these out with all the information you’ve collected. At this point, the calculator will be able to provide you with a breakdown of what it believes your footprint size to be.
Reporting your carbon footprint
Once you have a clearer picture of what your footprint looks like, it’s time to make a decision on whether or not you want to report it. While only certain quoted companies are required to report their emissions, it can benefit an SME to be open and up front about their footprint – particularly if they’re at or close to a position of net zero.
Reporting your findings is a good way to boost trust in your business, and can generally be done in one of a number of ways. First, you need to assess who you think would be interested in or benefit from the knowledge of your SME’s footprint. That includes groups like:
Once this has been decided, you can move on to working out what kind of publication you want to share your information through. Again, you have plenty of viable options here, including the likes of:
- On your website
- Internally via a company newsletter
- Management reports
- As part of a press release
- Once you have your results, you can publish them internally or externally to show the hard work you’ve done as a business.
Reducing the carbon footprint of your SME
Whatever your footprint, there are always steps which can be taken to lower the amount of CO2 you’re throwing back into the atmosphere. Here are some of the most effective ways to reduce the size of your footprint.
Heating and air conditioning
Both heating and air conditioning are a major factor in energy consumption. Their impact can be lessened by improving insulation and updating the windows of an office you own. If you are not the owner, try to find other ways to block draughts or allow heat to escape. Also think about implementing dress code policies which allow staff to work in clothes which are comfortable for them.
Electric cars and other forms of vehicles are considerably better for the environment than traditional combustion engines. While they still use a minimal output of CO2, these types of vehicles will on average produce three times less carbon when being driven. As such, they’re a great investment for any businesses who own company cars.
Swap to a renewable energy provider
One of the most efficient ways to make an immediate change is to swap your energy provider to one who specialises in using renewable and sustainable forms of power. Often, these will be provided by wind turbines or with the use of green gas mills. There are a host of suppliers to choose from, so look around and find one which works for your needs.
Try to replace as many lights as possible with LED alternatives. This will not only save on your lighting bills, but also majorly reduce the amount of carbon your office produces. You can also maximise the natural lighting in a room by investing in blinds, as well as considering installing motion sensor lights to avoid wastage.
Create a carbon reduction plan
On top of making actionable changes to specific parts of your business, you can also take a wider approach to tackle your carbon output. Implementing a carbon reduction plan gives every member of your team the chance to see what steps you are taking and how they can individually help.
Making your online business more environmentally friendly
Your environmental impact isn’t solely linked to the amount of carbon you produce. There are a number of other factors which contribute towards how green or sustainable your SME is. Again, this is true whether you work in an industrial position or in a completely digital environment.
The three pillars of sustainability for businesses
As a business there are key metrics which will define your levels of environmental friendliness. These are referred to by some as the “three pillars of sustainability”. Let’s take a closer look at what these are and how they might impact you.
This is perhaps the most obvious pillar, as well as the one which gets the most attention both internally and externally. It focuses on protecting the environment, often by doing whatever you can to reduce the impact a business’ carbon footprint or other forms of waste production are having.
A business ultimately needs to make sure that they’re earning the money they need to remain solvent. The trick here is to ensure that they’re doing this in accordance with environmentally ethical practices. If a business diverts from the interests which best align with factors of sustainability, they might need to pivot or reposition themselves.
The word “social” in this sense doesn’t mean promoting what you’re doing on social media channels. Instead, it relates to ensuring that a business operates in a way that benefits their staff, the surrounding community and every person involved along each step of the supply chain.
By adhering to each of these core pillars of sustainability, a business is positioning itself to be seen in the best possible light by consumers, staff, and investors alike.
Making your SME more environmentally friendly
With a better understanding of the three pillars, it’s time to look at what you can do to reduce the environmental impact your SME is having. This is again something you can never be too proactive about, with every business always capable of doing something to improve their situation.
Try to make products sustainable
While it might be a challenge for some businesses, if possible try to make the product or service you offer as sustainable as possible. Whether you’re an e-commerce site which sells greener stock, or a marketing agency who makes a point to only work with brands who are ethically-minded themselves.
Create recycling policies
Make sure your office and wider company have dedicated recycling policies in place. This extends to everyday practices in an office (such as having a specific recycling area), as well as reusing packaging as much as possible where appropriate. Steps to begin the creation of a recycling template include:
- Identify all points at which waste is generated
- Work out how waste is being produced
- Assess the quantity, type and its environmental impact
- Work out the cost of current disposal methods
- Once you have all this detail recorded, you’ll be able to begin the process of working out how to combat each step of the chain. Begin looking at opportunities to reduce or recycle waste, while also setting company-wide targets.
Reduce energy waste
We’ve already discussed how simple things like water, heat, electricity and other common forms of energy usage can have a big effect on your carbon footprint and environmental impact. This is something which you can work out how to manage while you calculate your carbon footprint. Alternatively, you can carry out an energy audit to find out where you’re allowing unnecessary wastage to occur.
Look for sustainable shipping options
If you regularly ship items, try to take active steps to reduce the amount of unnecessary pollution you’re causing. Good steps to take here include using recyclable packaging, reducing the overall amount of packaging you’re using in shipping, and printing labels with a thermal printer to save on ink.
Try to become as remote-first as possible
While we’ve already seen how an online platform doesn’t necessarily mean completely reduced carbon output, it does at least reduce the need to commute and power an entire office building. Your CO2 output and energy bills won’t be totally removed, but it will take you a massive step closer to becoming net zero.
Blog provided by Retail Merchant Services.