If you’re searching for a way to reduce your company’s carbon footprint, congratulations; you have taken the first step to protecting your business and the planet.
In this article we will give you easy-to-used steps to calculate the impact your business has on the environment. This will help you identify reduction opportunities and unearth ways you can save money and keep ahead of the competition as the UK transitions to a low-carbon economy.
What is a carbon footprint?
A company’s carbon footprint is a measurement of the total amount of greenhouse gases (GHG) released into the atmosphere as a result of its operation, usually over one year. This ranges from the amount released through employees’ fuel consumption to greenhouse gases (GHG) used in powering machinery, and from the gas used in a home office to the emissions relating to online meetings – in essence the entire value chain.
The British Chambers of Commerce partnered with O2 to research how many UK-based small and medium-sized (SMEs) companies measure their carbon footprints. The findings show that only 1 in 10 companies calculate their greenhouse gas (GHG) emissions with many unsure about how to start a climate action plan.
Creating a climate action plan is no longer just a case of doing good by the planet; it makes good business sense with a raft of financial and competitive opportunities lying in wait for businesses who successfully transition to the new low-carbon economy.
One key step of creating a climate action plan for your company is to to calculate your annual carbon footprint. This allows you to identify which areas of your business produces the most emissions and offers up opportunities to reduce these emissions.
Reducing your company’s carbon footprint will give you a clear picture on how your company damages the environment while also highlighting ways you can mitigate this impact.
And again, mitigating your environmental impact will make financial sense. It could make you eligible for generous tax breaks. It could increase customer and stakeholder buy in. It could mean instant savings on energy.
To find out how your business could benefit from a Climate Action Plan, contact KGM Climate today.
Steps to calculating your company’s carbon footprint
STEP 1: Identify activities that emit greenhouse gases (GHG)
Select a span of 12 months, usually January to January, to carefully identify activities that could be related to greenhouse gas (GHG) emissions.
Scope 1 and Scope 2:
To begin, focus on scope 1 and scope 2 emissions.
Scope 1 emissions are direct greenhouse emissions that occur from sources that are controlled or owned by an organization. The most common emitters are:
- Gas supply
- Company vehicles
- Air-conditioning leaks
Scope 2 emissions are indirect emissions associated with the purchase of electricity, steam, heat, or cooling. In essence this would be your electricity usage that is purchased from the grid or from a local source.
Scope 3:
These emissions include all other emissions related to the rest of your value chain. This can go as far as the behavior of your customers once a product or service has been used. These emissions often account for 90%-95% of a company’s operations but as of yet, they are not legally required by law to reach Carbon Neutral. We will dive into scope 3 emissions in a follow-up blog.
STEP 2: Collect and Convert the data
Once you have identified the activities, you need to collect the data.
Most accurate: To get the most accurate result you need to collect specific data from each activity. For example, the kWh from your electricity bill or type of fuel used in a company vehicle, type of vehicle and the exact distance travelled.
Next you need to find the emission factor for your specific activity. Do this by looking at the GHG Standard website or if you are in the UK use the national DEFRA factors. On the positive side these emission factors are updated annually but on the flip side the documents are not very user friendly. To get professional assistance, set up a free consultancy call by clicking HERE.
Once you have the relevant data you can use the following formula to calculate the CO2e (Carbon dioxide equivalent) used to show GHG emissions.
Activity data x emission factor = tonnes or kg of GHG emissions
Take the data measurements for each activity you collected and multiply them by the applicable conversion factor. By adding these up and calculating them over a year’s worth of activities, you can find your total carbon footprint and make some changes as needed.
It may be difficult to get reliable and accurate data from all of your activities so you can use various online calculators for specific activities or industry averages like the McKay Carbon Calculator.
STEP 3: Prepare a reduction plan for your carbon footprint
Once you have the calculations, look at ways you can reduce your GHG emissions. There are many financial and competitive opportunities for companies that reduce their carbon emission and we will be exploring some of these in a later blog.
STEP 4: Offsetting your greenhouse gas emissions
If you are unable to reduce these emissions, you can offset part of the GHG emissions and even achieve a carbon neutrality to get ahead of the curve on climate change regulations.
What is carbon offsetting?
Carbon offsetting is when you offset your GHG emissions by donating money to a certified carbon offsetting company. The company that receives the donation will be directly working with projects around the world that help to prevent carbon emitting activities through the support of donations. A carbon offset can prevent a destructive climate action from happening in the future like deforestation or it can contribute to green energy projects or carbon capture projects.
Carbon offsetting is a debatable topic especially after its rise to prominence over the past few years. Many see this as a type of greenwashing as companies donate money to a project with no intention of actually reducing their carbon emissions. Others see offsetting as an essential means of financing projects and green initiatives that need support to protect forests and train locals in conservation efforts.
When it comes to reaching Net Zero, companies are required to support specific and expensive carbon capture projects rather that the much cheaper traditional carbon offsets. We will the different types of carbon offsetting in a later blog.
STEP 5: Communicate your results
The next step would be to communicate your findings and your emissions to the world! Well, depending on your size. If you are a small to medium-sized company the chances are you won’t be required to report your findings publicly. Some companies are obliged, however.
Complying with SECR
The United Kingdom’s Streamlined Energy and Carbon Reporting (SECR) was introduced in 2019, replacing the Carbon Reduction Commitment Scheme. SERC requires obligated UK companies that operate in high-emitting sectors to disclose their energy consumption and greenhouse gas (GHG) emissions data every year. Such organisations must report on any measures they are taking to minimise their carbon footprint and combat climate change.
The legislation is an acknowledgment that businesses have a responsibility to reduce their emissions. It helps businesses cut costs, increase productivity, and promote environmental sustainability.
Since the implementation of the SECR legislation, there has been a lot of confusion as to which businesses in the UK are obligated to report their GHG emissions and which businesses are not.
Carbon footprint – who is obligated to calculate?
It’s a company’s responsibility to comply with the legislation if it meets the criteria mentioned below, except it provides specific exemption reasons:
1. Any organisation already obligated to report under mandatory greenhouse gas reporting regulations.
2. Companies defined as “large” under the Companies Act 2006. That is any company that meets at least two of these criteria;
- Companies having 250 employees or more
- Companies having not less than £36 million turnover
- Companies with a balance sheet of £18 million and above
STEP 5: Hitting Net Zero
You may have heard the term Net Zero and maybe confused it with Carbon Neutral. Well, Net Zero is often seen as the next step and key to keeping the planet under 1.5 degrees of warming – a goal to avoid catastrophic climate change consequences.
To reach Net Zero, companies would need to almost completely stop pumping GHGs into the atmosphere and for the unavoidable emissions, they would need to compensate by funding projects that remove carbon from the atmosphere.
Science-based targets were designed to help companies achieve their Net Zero objectives and give a detailed account of what you need to do to help the world stay at 1.5 degrees.
While science-based targets can seem scary, they can also be seen as a blueprint of how the world of business needs to progress to help reach a zero-carbon economy.
Contact our team today for further advice and an obligation-free chat.
