Carbon Reduction Plan: Reducing Scope Emissions
The Small Business Guide to Reducing Scope Emissions
No matter what business you are in, or the type of customers you serve, demonstrating your climate credentials is critical to success. It’s a fair bet that most of your stakeholders are focussed on environmental issues, climate change, and global warming,
They understand the reputational benefits of these commitments, including the increasing demand from talented existing and prospective employees to work for and with environmentally conscious companies. Most will have embedded a culture which demonstrates their commitment. Other benefits include improving the prospects of their long-term sustainability, the positive impact of stakeholder loyalty, and the impact to the bottom-line performance of the company.
Whether you have yet to start on a Carbon Reduction Plan, or you have already embarked on a Carbon Reduction Plan journey, this guide will take you through frameworks which will help you to demonstrate to your suppliers, customers, staff, and other stakeholders that you take combating climate change seriously.
But first, some statistics.
According to the National Federation of Self Employed and Small Business Ltd (the FSB) at the start of 2023:
there were 5.5 million small businesses (with 0 to 49 employees), 99.2% of the total business population.
In total SMEs accounted for 99.9% of the business population (5.6 million businesses).
SMEs accounted for three-fifths of the employment and around half of turnover in the UK private sector.
Total employment in SMEs was 16.7 million (61% of the total), whilst turnover was estimated at £2.4 trillion (53%).
Employment in small businesses (with 0 to 49 employees) was 13.1 million (48% of the total), with a turnover of £1.6 trillion (36%).
Micro businesses (employing fewer than 10 people) accounted for 96% of all businesses in the UK.
Small businesses were responsible for 52% of all private sector turnover in the UK.
The average turnover for a small business in the UK is £823,000.
The construction sector had the highest number of small businesses in the UK.
These figures were mirrored by the Office for National Statistics, UK. So, lots of businesses, lots of people, and a major contributor to the UK economy.
But, in terms of climate change, taken together, SMEs are responsible for a massive amount of greenhouse gas emissions which damage the environment. There are a number of different sources; some emissions come from the production process, some from the consumption of embedded gases in products they sell, some from business-related travel; the list is large.
The estimates of the volume and types of emissions vary, it is not an exact science, and as many SMEs are committed to reducing their emissions, we can expect the total to gradually fall. But emissions are not falling fast enough. If the UK is to achieve the target of being Net Zero by 2050, much more needs to be done, and quickly.
How can a Carbon Reduction Plan help SMEs combat climate change effectively?
We are frequently asked this question. The initial step is to design and implement a framework. There are different ways of doing this, but in our experience the steps below provide an excellent foundation.
Train your staff; they do not need to be experts, but they do need to be aware of at least the basics of the subject if they are to provide effective contributions.
Map the lifecycle of your products and services to sources of greenhouse gas emissions.
Set and commit to a Carbon Reduction Plan to tackle climate change.
Communicate the Carbon Reduction Plan to all stakeholders and ensure that there is a consistent understanding of how the strategic goals will be achieved.
Designate a Climate Change Champion. The Champion will typically be a senior member of the company (ideally a board member) who has the authority to direct and lead the programme. The Champion will also be the source of truth about the actions your company has taken, and successes it has achieved.
Implement a company-wide carbon reduction policy.
Develop operational plans which set out the steps that will be taken to achieve the Carbon Reduction Plan targets.
Set specific Carbon Reduction Targets using the SMART principles.
The Climate Change Champion should assign responsibility for implementing specific actions of the Carbon Reduction Plan to specific team members.
Include climate change KPIs in all staff performance reviews and reward success.
Establish workplace ‘think tanks’.
Benchmark your progress against ’best in class’.
Monitor progress and report results.
Collaborate with other local SMEs to facilitate a ’joined up’ approach to tackling climate change.
Join the ‘circular economy’ community.
The framework above provides a foundation for the present and the future. The detail will evolve with time and experience, but the overall strategy should be embedded into all of the company decisions and actions.
Calculate Your Current Emissions
Once you have decided to adopt a Carbon Reduction Plan framework, you need to know the current status of your emissions. There are a number of scope calculators available, including:
The Greenhouse Gas Protocol website - https://ghgprotocol.org/ and
The SME Climate Hub website https://smeclimatehub.org/start-measuring/
Both are free to use. There are many others so we suggest you undertake some research before choosing a specific calculator as changing calculators can often lead to confusion.
The mapping of the products and/or services you provide to the type and source of emissions is critical at this stage, so it’s worth commissioning an expert to confirm the completeness and accuracy of the mapping at this stage, as mistakes or omissions can be costly.
Emissions split in three main sections, called scopes. Each is described briefly below, but please contact us for a more in-depth conversation about what to include in each category, the sources of your data, and the best way to record the data.
Scope 1 - direct emissions - arise from assets which the company either owns or controls.
Scope 2 - indirect emissions – come primarily from energy the company purchases from suppliers. This is often the easiest set of emissions to calculate and monitor as the details are typically included in the energy bill.
Scope 3 - indirect value chain emissions - result from the use from assets not owned or controlled by the reporting organisation, but which emit greenhouse gases during the lifespan of the product or service in the value chain. Even though these emissions are out of the control of the reporting company, they typically represent the largest portion of the greenhouse gas emissions inventory. This is usually the most difficult scope to obtain emissions data for, so start with what you can obtain easily and build as you go.
Knowing what emissions to include in each scope is vital. It is also vital that you determine the most efficient and effective application to record your results. Most companies begin by using a spreadsheet, but that often becomes unwieldy very quickly, which necessitates transferring data to another application. That process is one reason why so many companies begin the journey but become disheartened at the amount of rework which a transformation of this nature involves, and therefore effectively stop the reduction programme.
One other important thing to consider is that collecting and recording data manually is expensive, time consuming, and prone to transcription error, so automate as soon as possible – but choose the automation application carefully to make sure it meets your needs now and in the future.
It is also critical that you talk with your suppliers and customers to ensure they know what you are doing and what it means for them. Keep them updated, they are your lifeblood.
Calculating your scope emissions requires you to identify the sources of the data. That provides the valuable evidence you will need to present to stakeholders. Communicate the results through your website and, if appropriate, your annual report– these are excellent media to demonstrate your commitment to combating climate change.
It also provides a benchmark against which you can measure the progress of your reduction programme but bear in mind that the absolute figures will change over time. In addition the amount of information you gather – especially for Scope 3 – will increase over time. One potential consequence of this is that your carbon footprint may actually increase in the short term. That’s common, so it’s important to identify the differences so as not to get disheartened if that does happen.
Understand the risks and the challenges.
You have a framework, the Carbon Reduction Plan strategy is in place, you have started to calculate and record your scope emissions and you have a dedicated Climate Champion. From that foundation, identify the risks and make sure your risk register accurately and fully reflects the current situation. As always, determine the appropriate mitigation action for the risk.
Include the risks in your risk appetite, and be certain as to how that appetite has been impacted (it may not change in the holistic view, but it may do so in the detailed analysis).
The risks will change as your scope emissions basket (especially Scope 3) evolves and grows, so it is vital to revisit the register on a frequent basis. Risk owners must be made aware of their responsibilities, and this could be incorporated into the KPIs mentioned in the framework section above.
Risks are dynamic though, and the same risk may be more or less critical at different times depending upon the overall risk assessment. If you know and understand the risk profile, you are in a good position to direct resources in the most effective and cost-effective manner, thus boosting your productivity and the bottom-line performance.
Make a Start on you Carbon Reduction Plan
It sounds obvious, but many SMEs procrastinate because they think the process is too expensive, time consuming, and complex – especially for Scope 3. Getting the basics right can be a lengthy process. That’s where the knowledge of an experienced consultant is invaluable, at least in the early stages of your journey. An experienced consultant will ensure the completeness of the mapping process, then guide you through how to plan the project, build and implement the strategy, train your staff, build the risk register, determine the risk appetite, and at each stage further embed the culture which is essential to the success of your reduction programme.
Typically a consultant will start with the low hanging fruit to build the knowledge and confidence of your staff, inspiring them by nurturing them through the early stages. By introducing small changes to working practices, identifying appropriate data sources, and demonstrating emission reductions, you increase the likelihood that your strategy will succeed.
How We Can Help with a Carbon Reduction Plan?
We have a great deal of experience in the field of combating climate change. Our staff are accredited by The Carbon Literacy Project, and we have trained a multitude of people from a plethora of businesses, helping them to become accredited as Carbon Literate. Our services include providing advice and guidance to:
Develop your Carbon Reduction Plan.
Assessing the carbon footprint of your organisation
Developing your approach to carbon reduction through appropriate communication with your suppliers, clients, and other stakeholders.
Want to learn more? Visit one of our Carbon Reduction pages to find out more about how we can help:
Bespoke sustainability workshops.
Our Sustainability Workshops are designed to inspire and educate individuals and organisations on the importance of sustainable business practices.
Calculate and Reduce Your Scope 1, 2, and 3 Emissions
Are you ready to take control of your emissions and make a positive impact?
Compliance with The Environment Act 2021:
Working Towards a Sustainable Future
