Not long ago, it was novel to consider your carbon footprint and your business’ effect on the environment. However, in recent years, the UK has implemented laws making it a requirement for firms to report their carbon emissions. As a result, more companies are starting to make carbon an essential consideration in the procurement process. And buyers are starting to ask businesses for evidence of their efforts to reduce carbon emissions as part of their social commitment to the local environment.
More small businesses are now becoming concerned about their carbon footprints, too. What’s more, being recognised as a green business has many benefits, including company growth. As the Net Zero plan takes off, businesses of all sizes are committing to net zero emissions. But some may not realise it’s not possible to set a net zero commitment without first measuring their own carbon footprint.
What is a Carbon Footprint?
A carbon footprint is your company’s contribution to climate change. In other words, it’s the amount of carbon your business produces during operations and the production & sales of products/services. Your carbon footprint measures the amount of carbon released during the course of running the business.
Company carbon footprints usually include two types: operational and product carbon footprints. The company’s carbon footprint includes all the greenhouse gases released over a 12-month period and adds up to a total amount expressed as tonnes of carbon (carbon dioxide, also referred to as CO2).
Sources of greenhouse gases (carbon dioxide) produced by businesses include:
1. Emissions from sources owned & controlled by the company, including gas for heating or fuel used onsite and fuel for company vehicles. Emissions sources can also include industrial air conditioning, refrigerant losses, and manufacturing carbon emissions.
2. Emissions resulting from the use of electricity. As an electricity user, your company is responsible for greenhouse gases generated by the energy producer. The more electricity your business uses, the more energy the producer is forced to create, leading to higher emissions.
3. Emissions produced indirectly through the purchase of goods & services, distribution, and use of goods & services by clients, waste disposal, employee commutes/business travel, and more.
Most emissions sources can be calculated by an emissions conversion factor. Here’s the formula:
Data x Emissions Factor = Greenhouse gas emissions
A company can find UK emissions factors listed publicly, which can be used to create a spreadsheet for these calculations. There are also online tools available to help with these calculations.
It’s also possible to verify your company’s carbon footprint through recognised standards; however, it’s possible to do the calculations on your own when you’re just beginning. These calculations can then be used as a company benchmark for improvement in the future.
Steps to Determine Your Company’s Carbon Footprint
Here are some steps to help you get started with calculating your company’s carbon footprint.
1. What’s the Scope?
First, start by determining the scope of your carbon footprint. The scope depends on the type of significant emissions sources for your company. These are the sources you have the most influence over and have the most data available.
When calculating the company’s carbon footprint, you may want to start with points 1 & 2 (from the previous section). These are areas where you have more control over the processes. While you can also include point 3, these activities are usually the hardest to measure. However, you can include waste disposal, water, use of water, and business travel, which are the easiest to measure accurately.
You can also measure emissions from heating, air conditioning, electricity usage, and vehicle use.
2. Collect the Data
Once the emissions activities have been decided upon, it’s time to measure and collect the data for each of these activities. Again, it’s crucial to use the correct metric; for instance, vehicle mileage and litres of fuel use, kWh of gas/electricity from energy bills, cubic metres of water from the water bill, and more.
It’s helpful to track these metrics on a spreadsheet, keeping each metric separated from the others. Also, keep a separate workbook page for each metric to keep everything clear and sorted.
3. Calculate Emissions
Once the metrics have been calculated and recorded in the workbook (using the right carbon conversion factors for each), it’s time to calculate your carbon footprint. It’s usually good practice to do this annually; some businesses choose to align these calculations with their accounting period.
When calculating emissions, you can also use the online tool available from Carbon Trust’s SME Carbon Footprint Calculator or other similar online tools.
4. Use as a Benchmark
Once the first carbon footprint calculations have been completed, use these as a baseline to set goals for the coming years.
The Science Based Targets initiative helps companies determine what can be achieved; they currently recommend aiming for a reduction of 2.5 to 4.2% reduction of emissions each year. However, it’s OK to go faster if this works for your company.
5. Use Calculations to Determine Improvements
Once you have the baseline calculations on your company’s carbon footprint, now you’re ready to identify those areas that need improvement.
You may be surprised to find that certain actions even save your business money. For instance, if water usage is a problem, finding methods to reduce water use may result in significant savings.
6. Share Progress
As you reduce the company’s emissions, share your results with stakeholders. This is the right time to communicate your goals on improving the environment and reducing the company’s carbon footprint.
Carbon Offsetting as a Last Resort
Finally, you’ve probably heard of carbon offsetting. Carbon offsetting is the process of buying credits from programs that remove carbon from the environment. They may do this by planting trees, for example, which works to cancel out your company’s emissions.
Here, the temptation is to buy carbon credits rather than making the necessary changes to an organisation’s operations. However, your business can have a more direct impact on the environment by going through the process of calculating and reducing carbon emissions at the source (your business).
The reduction of carbon emissions is a worthy goal; however, it can be challenging. For this reason, you may want to consider hiring a sustainability consultant to help you identify issues and effective measures to guide you through the calculation of your carbon footprint.