Why your Business cannot ignore Carbon Reporting
By Andrew Grover, Advantage Utilities
Forward-thinking directors are already on the net zero pathway and using it to their commercial advantage. Yet many simply don’t know where to start.
Here’s why it’s not okay to not take any action and some practical advice to get your company on the right track.
On 20 April 2021, the UK government committed to reducing Greenhouse Gas Emissions (GHG) by 78% by 2035 compared to 1990 levels – the world’s most ambitious climate change target that will be legally binding by the end of June 2021.
This would bring the UK more than three-quarters of the way to net zero carbon emissions by 2050 – the original target the government signed us all up to in 2019.
As you’ll most likely know, net zero refers to achieving a balance between the amount of GHG emissions produced and the amount removed from the atmosphere. Businesses can do this by reducing their harmful activity, generating their own electricity or offsetting with green alternatives.
With the coronavirus pandemic and Brexit presenting smaller and mid-market businesses with more than a few challenges recently (and many much bigger ones too), committing to achieving net zero may seem like a step too far. But, there are business benefits to be gained.
With the government’s Ten Point Plan and £5 billion to support a green recovery and deliver net zero, there is much commercial opportunity for organisations to explore.
Working towards net zero doesn’t simply mean expense for your business. In fact, there could be savings to be made. With so many companies switching to renewable energy options, the price of wind and solar is dropping. Similarly, improving energy efficiency can significantly reduce energy bills. Could there be a saving for your business right in front of you?
What happens if you do nothing?
What’s more, your customers will be looking at their supply chain compliance. Supply chain rules are evolving and companies ultimately will have to comply with sustainability-driven criteria.
Many larger companies, multinationals and public sector organisations, like the NHS, have made net zero pledges, committing to ambitious science-based carbon reduction targets.
If you are part of a large business’ supply chain, for example, a food producer supplying a large supermarket or a parts manufacturer producing for a global automotive brand, net zero requirements for some, are already becoming par for the course in the decision-making process. Taking action sooner rather than later is advisable to ensure you stay on that preferred supplier list.
Being able to present the right information to your customers will provide commercial advantage not to mention offer the added benefit of strengthening your business’ marketing position to potential customers.
It’s also useful to know that some banks are now linking finance to your carbon impact. Not being committed to net zero or taking action and progressing with a net zero plan can affect your ability to borrow, potentially making it difficult to get finance or more expensive if your carbon impact is poor.
On the flip side, there can be financial incentives for businesses looking to make green improvements.
Enhancing reputation, recruitment and retention
When it comes to making sure your business is working towards net zero, implementing a sustainability strategy has to come from the top. Being a principles-led company and developing your Corporate Social Responsibility (CSR) and Environmental, Social & Governance (ESG) may help to focus your efforts but putting sustainability at the heart of your business culture and decision-making, helps to make change happen faster.
As you will know, business reputation is everything. It won’t be just clients who want to work with and buy from a responsible company but staff are also looking to work for sustainable businesses. They will expect it, especially Millennials and Gen Z, choosing companies that are able to demonstrate that action is being taken. So, where to start?
First step: Measure your carbon footprint
Becoming a carbon-neutral company starts with measuring your business’ carbon footprint – the sum of all GHG emissions. From assessing processes, products and services, supply chains, transport and logistics; you need to understand where your business currently stands in relation to its carbon emissions.
For example, does your business have high-energy outgoings from its operation or is it highly dependent on transport to ship goods? This data can be obtained from the likes of energy bills and business travel expenses.
Gathering this information will enable you to create a benchmark for carbon reporting going forward, allowing you to track progress towards net zero month-on-month and year-on-year.
How does a business start gathering the right carbon emissions reporting information?
The path to the adoption of net zero reporting can be gradual. Some companies try to do it themselves others feel it’s out of their comfort zone and look for support, freeing them to focus on their core business. An expert independent advisor can execute the necessary steps for you. They will bring insight from hundreds of previous energy efficiency projects and be able to advise on and implement cost-effective energy strategies and technology solutions that will take your business towards the goal of becoming carbon neutral.
Working towards accreditation standards like Future Net Zero also provides a simple and cost effective process that allows smaller and mid-market businesses to gather basic information to be able to record data, monitor progress and benchmark against competitors. Verified and audited by Future Net Zero, it offers a pathway to developing your green credentials.
Where can SMEs seek out net zero support?
There’s plenty of support available to help get you on the right track and create a tailored net zero roadmap. Look for a specialist business utilities consultant that can help to:
Identify the relevant metrics for your business such as, per employee, per £1,000 turnover or per metre square of office space, kWH of electricity or road miles
Establish what measurement you will use for example, CO2 emissions in kg
Understand the breakdown of carbon in the energy your business uses and where it’s coming from
Provide support with recording the data and carbon reporting – maybe your business has multiple sites for example
Assist your business with setting net zero targets that can be measured and shared with customers, investors and employees
Highlight net zero opportunities for your business including carbon emissions reduction, energy efficiency through green technologies and potential utilities savings.
Take your first step to net zero
Tackling net zero can seem expensive and time-consuming but smaller and medium sized businesses will reap the business benefits. It’s not going to happen overnight but taking action now to become a carbon neutral company is, most definitely, a step in the right direction.
At Advantage Utilities, we have made our pledge and are already working to reach Net Zero by 2035, as part of the Race to Zero campaign. Let us use our experience to assist your business one step at a time.