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, whether it’s understanding exactly what kind of impact you’re already having, or the desire to reduce the size of your footprint this guide, produced by Retail Merchant Services, is here to help.
Understanding your carbon footprint
You’ve no doubt 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.
Save money
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.
Calculating your carbon footprint as an SME
Working out the size of your company’s footprint isn’t an instant process, but it needn’t be excessively complicated either. 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.
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:
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- Petrol or diesel used by company cars
- Liquified petroleum and any other natural gas which is burned on your site
- Refrigerant losses
Energy indirect emissions
This is 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.
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:
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- 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:
- Electricity in kilowatt-hours (kWh)
- Petrol or diesel in litres
- Liquified petroleum gas (LPG) in litres
- Natural gas in kWh or cubic meters
- Refrigerant top-ups in kilograms (refrigeration, fire protection and air conditioning equipment)
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.
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.
Once this has been decided, you can move on to working out what kind of publication you want to share your information through. There are 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
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 vehicles
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.
Lighting
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.
Hopefully this article will have helped you to get to grips with just how important lowering your CO2 emissions can be as an SME. If you’re unsure where to start, there are a number of places a business can turn to to get help. Often, these will be government-approved or even funded. Take a look at what you can do to kickstart your move towards a more sustainable way of doing business.
This Guide was developed by Retail Merchant Services. Read the full guide.
