Last reviewed 20 October 2020

Reducing your business’s overall carbon footprint or even becoming carbon neutral is no longer an ambition but a commercial imperative. As Dave Howell reports, your company’s green credentials are now as important as the quality and price of your goods or services to each of your customers.

The Climate Change Act (CCA) is now 12 years old. The government has also upgraded its CO2 target from 80% of the 1990 baseline to 100% by 2050, effectively stating the UK would be carbon net-zero by the middle of this century.

As a business owner, can you reach these targets? Indeed, what does 'carbon neutral' actually mean? There is a difference between what the CCA refers to as 'zero emissions' which defines CO2 emissions into the atmosphere. Whereas, 'carbon neutral' describes how accreditations can be used in association with a carbon neutral agency such as the Carbon Trust.

In their current report npower Business Solutions and Energy HQ concluded: the majority of businesses – 75% - believe that achieving net-zero emissions by 2050 is a realistic target and when asked whether they had a clear plan to hit net-zero emissions ahead of 2050, nearly two thirds (64%) agreed.

Over 50% of businesses have already invested in some form of on-site renewable power generation, while a further 22% are planning to invest. A significant number of companies (44%) are also looking at EVs (electric vehilces) as part of their energy strategy. Nearly 50% are also considering measures that can make more of an immediate impact, such as a smart energy management system.

The report also recognised the commercial importance of taking practical steps towards reducing the environmental impact a business has: “Many forward-thinking businesses see net-zero as an opportunity to diversify

their offering into new areas or develop new products that aid sustainability,” the report concluded.

For smaller enterprises, how they approach becoming carbon neutral begins with data. The government published a handy guide on how small companies can report their CO2 emissions. Carbonprint.com also has a range of calculators for all sizes of businesses. And the Carbon Trust has masses of information and guidance all businesses can use to design their own carbon neutral roadmap.

Practical actions

Duncan Oswald is a Senior Consultant at Eunomia. Duncan is an environmental consultant with 25 years' experience specialising in areas such as decarbonisation, resource, and energy efficiency, and the circular economy.

What are the practical steps a small business can take to reduce their carbon footprint?

“First, measure it. You have to know where your carbon footprint is coming from before you can take meaningful action to reduce it. This is usually split into Scope 1, 2, and 3.

“Scope 1 is direct emissions you make from your own activities (like burning gas in a boiler or diesel in a van). 2 is indirect emissions generated on your behalf (principally from generating the electricity that you use) and 3, is all the other emissions generated across your supply chain and through your products and services.

“Scope 1 and 2 are easy to measure, initially through utility bills, then more accurately through half-hourly billing data, which are available from your supplier, and finally through sub-metering individual loads. This last is a lot easier than people realise non-invasive, self-powered, Wi-Fi current clamps can give you real time consumption readings to any level of detail you want, such as building, floor, room, even individual item. Once you know where the power is going, you can reduce how much is wasted, reduce the emissions of the rest through green tariffs and, as a last resort, offset what remains.”

Is it realistic for small businesses to become carbon neutral or even carbon negative?

“Very much so, and also necessary. Since the Climate Change Act 2008 (2050 Target Amendment) Order 2019 was signed into law last year, the UK has had a legal commitment to achieve net-zero greenhouse gas emissions by 2050, so everyone is going to become carbon neutral.

“As with so many things in business, it’s better to take control of change and manage it, than let it happen to you. If you work out what your carbon footprint is, and where it comes from, you can not only develop a plan to reduce it in a way that benefits your company, you can also identify risks that might arise from the decarbonisation of the economy, like increasing taxes or bans on certain types of equipment.”

What are the key challenges facing small businesses that want to develop into low carbon or carbon neutral businesses?

“It varies enormously, depending on the business. An office-based service company may have emissions limited to the use of buildings and equipment and some transport, all of which can be easily managed through energy efficiency, decarbonisation of heat, renewables, and green transportation.

“An energy intensive industry may have specific requirements for the quantity of energy used, delivery method, temperature and so on. These issues are all solvable too: there are solutions based on geothermal heat, renewable electricity, hydrogen and other technologies under development for these industries. The first challenge is taking that first step to characterise your carbon footprint. Once you have a good picture of where your emissions are coming from, you can plan how to reduce them.”

What are the key benefits to small businesses if they can achieve net-zero carbon emissions?

“Reputational benefits are typically foremost in the minds of the board. Companies that sell directly to the public or customers with a high public profile seem to be at the vanguard of the push to decarbonise. Customers want to feel that the way they spend their money can influence our impact on the planet.

“Risk is probably next. The economy will decarbonise one way or another; companies that don’t engage with this trend will be swept along anyway but, will not be able to manage the enormous changes involved. Business owners often fear that becoming carbon neutral will be an expensive distraction from doing business and making a profit. It isn’t, it is an essential part of managing a business and it shines a light on bottom-line costs which can be reduced or even turned into sources of revenue.”

Is a low carbon business now a differentiator when consumers choose which companies to buy from?

“Companies with high public profiles are falling over themselves to get on board, from the tech giants to the oil majors. And this trend is not restricted to consumer choice. Scope 3 emissions come from your product in use and at end-of-life, and from your supply chain. Many of the companies approaching Eunomia for assistance with the development of net-zero business plans are suppliers to businesses that are driving down their own Scope 3 emissions. If businesses want to continue to supply these customers, they have to develop and implement a credible decarbonisation plan.

“Taking action to make your business carbon neutral, or even carbon negative, has so many positives that it would be worth doing even if it didn’t contribute to improving our chances of maintaining a habitable planet. Net-zero business plan projects engage and energise staff right across the business, they send out a clear message to your customers, mitigate the risk of negative impacts from a decarbonising economy, and highlight opportunities for saving costs.”

The drive to become carbon neutral is gaining pace. Covid-19 has transformed how businesses now operate. Reducing your company’s carbon footprint is possible with careful planning.

Ben Spry, Head of Risk Management at npower Business Solutions, speaking in another report from Energy HQ said: “It’s important to get a handle on energy data and working hard to understand how businesses use energy. It sounds simple but it often isn’t and products like an energy audit can help.

“Improvements in terms of quick wins, include looking at times of use, efficiency of infrastructure and processes, employee behaviour that can reduce emissions or costs, or drive revenue depending on what scheme you’re on. To take action, you need to understand how energy is being used, it needs proper planning and a roadmap. That’s where we can offer significant support.”

With Robert Buckley, Head of Retail and Relationship Development at Cornwall Insight, also advising: “Businesses have a really important role to play, and the role of corporate social responsibility is now much bigger than it was 10 years ago and extends way beyond energy. So, I am quite hopeful that the social, environmental and commercial impact of businesses will encourage some quite big changes in behaviour and elevate it from the functional to the more strategic. And, it’s here where consumers can have a really big influence because they can call out the good and the bad that they see and show businesses what they need to do.”

There is little doubt about the positive commercial and the environmental impact becoming carbon neutral can bring to any business, no matter their market sector. If you are not actively planning and then executing your own carbon-neutral plan, start today.