Carbon Footprint

Your business carbon footprint: what you need to know

Perhaps you’re a self-employed freelancer whose dedication to exceeding client expectations is equal only to a dogged determination to crack the elusive formula for a healthy work/life balance.

Or maybe you’re juggling the demands of a small to medium sized business in the knowledge that, as the owner and manager, the responsibility for delivering on everything from business development to compliance rests solely on your shoulders.

However large or self-contained your business, chances are you’re spread pretty thinly and lacking that most precious commodity that dictates so many of the decisions you make on a daily basis: time.  

So, when your in-box is at full capacity and your in-tray overflowing, is it any wonder even some of the more crucial ‘To Dos’ slip down the pecking order? Those tasks that are perhaps too complex… too time consuming… or simply too easy to put off ‘for now’.

At times, the urgent can overwhelm the important, and understanding how your business effects the environment, and what you can do to mitigate this impact, may well not receive the attention it deserves.

And even when you’re able to find a window in your schedule, the next challenge is knowing where to start. You may be completely overwhelmed by the prospect of what’s involved in carbon offsetting, and confused about how to navigate the journey ahead of you.

Why it’s important for a small business to consider the impact of its carbon emissions

You may question why it’s important for a small business to consider the impact of its carbon emissions. Perhaps you’re beleaguered by the detail and can’t even begin to speculate how a business calculates its carbon footprint. And you may be confused about what steps you can take to mitigate the effects of your business’ greenhouse gas consumption on the environment.

And then, once you’ve decided what measures to take to reduce your business’ CO2 emissions, the next factor to consider is what a comprehensive carbon offset programme looks like, and how much it will cost your business in money and time.

Indeed, some business owners may be utterly confounded by the primary question, what is a carbon footprint? So, for the purposes of avoiding any confusion, particularly for those small business owners who are starting out on this journey, this then seems the logical place to begin.

Even a cursory online search will reveal thousands of definitions, with a typical example reading something along these lines:

“A carbon footprint is defined as the total amount of greenhouse gases produced to directly and indirectly support human activities, usually expressed in equivalent tons of carbon dioxide (CO2).”

So in real world context, a journey on public transport by bus or train over a distance of 10 to 12 km (6.5 to 7 miles) is estimated to equate to 1kg of CO2 on your carbon footprint. Likewise, it’s the same if you operate your computer for 32 hours (based on an assumed 60 Watt consumption), and so on. 

Just as individuals create their unique carbon footprint, for instance when they drive their car, fly away on holiday or heat their homes, so too do businesses. A business’ carbon footprint can be defined as: “The sum of all CO2 emissions generated by its operations over a given time frame.”

In terms of what this equates to, it would typically include all emissions which are considered to be directly under the control of the business on a day to day basis, such as the fuel used to drive company vehicles, and the combustion of natural gas to heat buildings and operate machinery.

It also includes indirect emissions, such as the business electricity purchased and used for operations. These emissions would be considered ‘mandatory’ in respect of the legal requirement for reporting for larger businesses.

A company’s carbon footprint can also relate to emissions not under the direct control of the business, and are considered ‘optional’ as opposed to ‘mandatory’ in terms of disclosure.

Examples here would include employee’s mileage for work purposes; off-site logistical requirements such as public transport and hotel accommodation; and the emissions of services and products purchased by the business from its suppliers.

Currently in the UK, only the largest companies – just shy of 12,000 – are required by law to disclose details around their energy consumption. Recognising the challenges of navigating the processes associated with mandatory disclosure, the Government introduced the Streamlined Energy and Carbon Reporting (SECR) framework to help reduce the complexity of reporting.

Streamlined Energy and Carbon Reporting (SECR) framework

In so doing, the Government also saw this framework as a means of widening the scope, and encouraging more small businesses across the UK – those which currently fall outside the legal threshold to report on their energy consumption – to voluntarily invest the time and resource into understanding the impact of their carbon footprint, and to apply similar practices within their business.

But why would a small business owner invest valuable time in reporting their company’s carbon footprint when there’s no legal obligation to do so?

Because quite simply it makes good business sense. The principle being is that there are tangible benefits to carbon reporting and carbon off-setting for a small business that can potentially unlock additional commercial value and cost savings for their organisation.

It can help them build their brand identity, setting them apart in what may be an overcrowded marketplace.

It can inform the company’s Corporate and Social Responsibility (CSR) policy, perhaps giving them a valuable edge over the competition.

It can build reputation, fostering a positive impression not just for the individual business, but also in respect of its broader industry or sector.  

It can help a business to attract and retain people within their team who have the same mind set as their target customer, who speak the same language and share the same ambitions around sustainability.

And, of course, it’s all about winning over the ‘Green Pound’.

Consumers today are far more conscious of the impact their choices have on the environment, and businesses are responding to that pressure by becoming more proactive in how they apply their environmental policies – as well as more transparent in how they advertise their green credentials.

Indeed, according to a survey conducted by Retail Week/UPS [January 2021] 77% of UK consumers believe sustainability is important, whilst 75% of European consumers said they wanted to see retailers lowering their carbon footprint. 

And a recent YouGov survey* found that more than half of the respondents believed that the Government was not doing enough to reduce carbon emissions.

But when it comes to embarking on their sustainability journey, what steps should a small business be looking to take? And how can they demonstrate to savvy consumers that they are indeed ‘walking the walk’? The ideal starting blocks are provided by none other than the SERC framework.

Understanding the principles that underpin SERC – as well as following the basic guidelines and adhering to the criteria that larger, regulated businesses are already required to meet – allows smaller businesses to engage with consumers in a more progressive and transparent way, adding value to the customer’s perceived outcome that goes beyond that directly offered by the product or service.

By applying the same measures and talking the same language as their larger competitors, smaller businesses can create greater commercial leverage by appealing to the rapidly growing green consumer base.  And it helps them stay ahead of the game; should Government thresholds change in the future, those business owners who are already up to speed with what’s expected of them will be rendered ‘good to go’ from day one.

Once a business owner understands what their company’s carbon footprint is, and recognises why it’s important – both in terms of the environment and the company’s bottom line – then the next challenge is knowing what to do next….

Compliance with the reporting requirements can be complex and confusing.

Having identified their reporting obligations and determining the boundaries for each scope of emissions, businesses need to set up an accounting and reporting framework, one that can interrogate data sources, processes and controls to obtain relevant information. And they need to generate their annual carbon emissions report using the Government’s formulas, and disclose this information in line with SERC reporting requirements, such as via the annual company accounts.

Sounds complicated…?

Well, the good news is that it doesn’t have to be. Small businesses striving to become Net Zero – but struggling to meet the challenge – are not alone. As a leading UK specialist in the field, Eaasi Carbon helps businesses achieve their goals by providing simple, cost effective solutions to empower them to understand and start their journey to a more sustainable future.

In the first instance, Eaasi Carbon supports organisations by providing ethical and transparent options for switching to green energy supplier tariffs. And unlike other providers, Eaasi Carbon openly declares and caps its commission charges at £120 pa, saving its customers what could amount to thousands of pounds on hidden commission fees that are typically charged by other energy brokers and suppliers.

When it comes to carbon reporting, Eaasi Carbon provides a low cost, full service solution that gives companies a zero touch approach to the entire process, allowing them to track their CO2 emissions, navigate the legal requirements for reporting, and use the inbuilt tools to carbon offset.

And by mirroring the Government’s SECR framework, as well as using bespoke AI driven technology, Eaasi Carbon has created a platform designed to make the carbon reporting process as streamlined as possible for businesses.

“Our vision is to create a platform that strips away the jargon and makes the process of carbon reporting so easy that it becomes the default choice for businesses who, whilst they have no legal obligation, are nevertheless driven to do so by their inherent values and their commitment to fighting climate change.”

And finally with one click, Eaasi Carbon can provide the opportunity for business owners to choose to ethically offset their company’s carbon emissions so that they can become entirely carbon neutral, a prudent decision which could also potentially set them apart from their competitors, appeal to environmentally-conscious consumers, and impact their sales ledger for the better.

And yes, introducing these measures will require business owners to take some time out and to look beyond the horizon.

And no, it can’t be put off indefinitely because time may well be in short supply – and not just for beleagured business owners.

Sir David Attenborough perhaps sums it up best.

Speaking ahead of the COP26 climate summit in Glasgow in October last year he certainly didn’t pull any punches: “If we don’t act now, it will be too late… We have to do it now.”