• Ryan Hollis

How to Reduce your Business Carbon Footprint

Updated: Mar 8

Do you own or work with a small or medium sized business that is trying to understand how to reduce greenhouse gas emissions? Are you convinced your customers want a product that has a lower carbon footprint, and the communities you operate in are concerned about greenhouse gas emissions? Or perhaps you sense that the carbon footprint of your product or service is a risk to the sustainability of your business, and you want to address the issue in some way, but are not sure where to start?


Well let’s start with the broad issue at hand, which is climate change, and how greenhouse gas emissions are causing earths atmosphere to warm up which is negatively impacting on the environment, people and communities, but it is also affecting global and local economies.

The role of carbon dioxide emissions in climate change

Climate change is occurring because of carbon dioxide, and other carbon dioxide equivalents (like methane, nitrous oxide and hydroflurocarbons - see the table below for a bigger list and their carbon dioxide equivalent levels) absorb and re-emit heat in the atmosphere. These are commonly called greenhouse gas emissions when they are human generated. They do occur naturally in the earth’s atmosphere, but it is our human activities like burning fossil fuels which are taking their concentration in the atmosphere to really high levels, changing the planets natural processes, and ultimately creating climate change.


A list of greenhouse gases and their global warming potential
Table 1: Types of Greenhouse Gases and Global Warming Potential

There is plenty of reliable evidence now that shows we are taking a huge risk with the stability of our planet and its life supporting systems if the global average temperature of earth’s atmosphere continues to rise. A lot of scientific studies have been completed to show that to reduce this climate change risk, the world needs to stabilise temperature rises to a below 1.5 deg C above pre-industrial temperatures (Reference 1).

Business participation is crucial to the 1.5 dec C target

Achieving this huge task means ensuring global greenhouse gas emissions peak around 2020 and reduce by 50% by 2030, before reaching net zero by 2050 (Reference 1).


Sound like a target businesses can commit to when thinking about lowering their carbon footprint? Absolutely. Achievable? Well to achieve this on a global scale will require one of the fastest ever economic and societal transitions we have ever seen.


But so what, because it is necessary to ensure things like our ecological footprint as humans is minimised. And aside from the planet’s health and biodiversity, if we do achieve it, it will also mean less pollution impacting human health issues, and actually far greater economic development in the long run.


OK, so we agree on the outcomes we need, and that it's important to get involved as a business. To achieve the ambition of 1.5 deg C and 50% less GHG emissions by 2030, all business sectors will ultimately have to get involved. Some will do it voluntarily, some will react to policy, some to external stakeholder pressure, and some eventually will do it as a matter of business survival.

Hang On! Are greenhouse gas emissions the same as carbon emissions?

The term carbon is used in many different ways when discussing greenhouse gas emissions and can be confusing at times. Governments, the media, and businesses are more commonly using the term carbon footprint. It also resonates with consumers. Look it up in the dictionary and you probably see this "amount of carbon dioxide (CO2) emissions associated with all the activities of a person or other entity (e.g., building, corporation, country, etc.)".


So, in our view, the answer is yes, the carbon footprint of a business determines the greenhouse gas emissions it generates. The important point is this;


By measuring your carbon footprint, your business can find opportunities to lower carbon emissions, positively impact climate change and talk about it in a way that your customers will understand.

What does the carbon footprint of my business look like?

Your carbon footprint is most obvious in your direct business operation - how much natural gas or other fossil fuels you consume, electricity generation you consume, and other processes you use that generate carbon dioxide emissions (maybe you are in the business of cement production for example). The amount of renewable energy you purchase, your operation's energy efficiency, like machinery fuel economy, all positively impact your carbon footprint.


Working to reduce your direct carbon emissions is the best step to take. But you can also look to see where fewer emissions can be generated within your value chain. That could be emissions related to the transport your suppliers use, or raw materials you source to make your product, your business travel, or where your products end up at their end-of-life. The Greenhouse Gas Protocol website shares a wonderful resource which identifies all the emissions related within the steps of a business value chain.


Scopes and Emissions Across the Value Chain - Calculating your Business Carbon Footprint
Diagram 1: Carbon Emissions in the Value Chain

The bigger the value chain (you might call it your supply chain) your business requires then the larger carbon footprints you might have to address.


Direct emissions from your value chain activities can represent carbon footprint reduction opportunities if you firstly know where they are and what their total carbon footprint is. An opportunity for many SME businesses to reduce their value chain emissions is simply by changing suppliers who themselves have a smaller carbon footprint, or just reducing the use of goods and services that have a high carbon footprint.

Calculating your carbon footprint

A carbon footprint is the total amount of greenhouse gas emissions that come from the production, use and end-of-life of a product or service. Calculating carbon footprints within your business and its value chain is often the best first action you can commit too. Carbon footprinting is well explained in several international standards and guides, and some businesses are well positioned to do it themselves.


For those businesses that don't feel they can calculate their own carbon footprint, there are some cool apps that can help you, or sustainability professionals you can engage to help you with the work. Obviously, this is where we at everfocus specialise and would love to talk with you to reflect on where your challenges and opportunities lie as a SME business.

We know our business carbon footprint, what now?

Set a target and strategy

Knowing your footprint, you need to decide how you are going to reduce it over time. Decide on your base year with which you will compare future carbon footprint reductions, good practice is to keep this no more than 2 years back in time. It’s important to build momentum when starting your journey to being more sustainable.


Set a target within 3 months of making your commitment to do something about your carbon footprint and decide on your target year to make the improvement. A good suggestion, if you want to align to other businesses supporting the 1.5 deg C target, is to target a minimum pace of halving carbon footprints every 10 years. That works out to be around a 7% reduction in your carbon footprint each year.

Plan and proceed

Prioritise your actions to reduce emissions, starting with the low hanging fruit, like energy efficiency improvements which will bring co-benefits of lower business costs and higher profits. Energy efficient lighting is a classic example where businesses can easily start to reduce their carbon footprint. Reviewing your air conditioning practices is another great way, perhaps by using digital automation to conserve energy in their operation. If you have a business vehicle, or fleet of vehicles, plan how you might move towards a zero emissions fleet, that again will lower your energy usage and carbon footprint.


Whilst carbon offsets are also a valid way to reduce your carbon footprint, we recommend it is used as an absolute last resort, to ensure you identify all your contributing processes to the businesses carbon footprint.

Measure and disclose

Disclose your business carbon footprint, and your plans to reduce emissions - this might be in your annual public reporting for large companies, or right down to a newsletter or social platform that smaller businesses use to communicate with current and potential customers. To show your customers and target audience you have been carbon footprinting your business, looking at the full life cycle assessment of your products, and are taking clear action to reduce your carbon footprint, helps strengthen your reputation as a sustainable business. And it's a fact that over 4 in 5 consumers would prefer to purchase a product that is sustainable over one that is not.


Once you are up and running, and start implementing actions, it is also very healthy to evaluate your results. Take a closer look at your energy use, did the new lighting and air conditioning controls you installed lower your electricity usage by the expected amount, perhaps you might need to take corrective action around workforce education on how to use the new technology. Good practice is to complete an evaluation of your results yearly and update your carbon footprint plan with the lessons you learn.


A diagram showing the plan do check act cycle of continuous improvement
Diagram 2: Plan - Do - Check - Act Cycle

How to reduce your value chain emissions

As we highlighted above in diagram 1, value chain emissions include all emissions outside of your company boundaries. They can often be the largest share of your carbon footprint.


To start, map out the carbon footprint of your value chain in a way that shows where biggest emission sources are, and focus on reducing the biggest ones systematically one by one.

Setting value chain emission reduction targets take a bit longer

Whilst it is good practice to keep the same size reduction target for the carbon footprint of your value chain (same base year, same halving of emissions by 2030), it will take a bit longer to map out the value chain as compared to mapping your own business operations. You will need to survey and engage with suppliers and downstream distributors, that takes time, and as such a good practice is to set your target within one year of your initial commitment.

Influence by ambition and purchasing power

One great action you can take with suppliers that you are a key customer for, is to request them to commit to the same ambition of 1.5 deg C and halving of their direct emissions by 2030. Alternatively, if you are looking for a new supplier of goods and services, include in your evaluation of their offering their climate strategy and transparency of data. If you have industry partners that need similar suppliers, collaborate with them to leverage your purchasing power together.


A different avenue to reducing your carbon emissions, particularly fossil fuels, is to review how your business can enable reductions in commuting travel emissions. Due to COVID-19, there has already been a temporary shift to working from home, which you might extend to be a permanent feature for your workforce.


Cars currently represent the largest source of transport emissions in Australia. Car emissions have grown by 25% since 1990.
Diagram 3: Cars represented the largest source of transport emissions in Australia in 2017

Alternatively, if you lease your business premises, and are due for a renewal, you can incorporate reviewing alternative locations which reduce employee travel as well as supplier and distributor transport routes. Perhaps the new site has its own electricity generation (solar power plant), or has eliminated the need for natural gas usage, or generates its own wind energy. Going further, sites with a positive ecological footprint and low environmental impact, are not only good for your carbon footprint, but studies have shown green workspaces improve mental health and productivity of employees.


Further to alternative site locations for your business, if you want to really stretch your targets, you can think about industrial ecology, and how you may co-locate with other businesses that can use your carbon dioxide waste streams. One particularly interesting example of this is co-locating a brewery business next to a vertical gardening business. The brewery can send their waste carbon dioxide to the vertical garden where it is utilised (and eliminated) in creating a more productive growing system. Here is a real example of this at Terella Brewing.

Measure and disclose - again!

It goes without saying that the same measure and disclosure practices for your own business process emissions reductions, apply for your value chain emission reductions as well. This is done as one process for efficiency, but also to help identify learnings you see across your value chain that you can also implement within your business.

Our business carbon footprint is good, but how do we become great?

Feel like you're on track to making that goal of halving your carbon footprint by 2030? There is more you can do now to start preparing for net zero in the longer term. You can start to integrate climate within your business strategy. This could mean altering your business model and product design, to something that is more service based and circular, or if your business relies of physical materials, move towards resource efficiency that allows recycling, reusing, and repurposing to maintain perpetual use of that material.


Your business could even invest time or resources into growing solutions that work across your whole industry. You could drive collaboration in delivering new climate-enabling technologies, or influence policy makers to improve their frameworks so that they will deliver the 1.5 deg C ambition.


The pathways for involving your business in meeting the 1.5 deg C ambition are limitless. Whichever pathway you take, they all have the potential to improve the sustainability of your business, through positive environmental impact, lower costs, and more revenue.

Free Resources

Perhaps the best free resource we can share for small and medium sized businesses is the "The 1.5oC Business Playbook - building a strategy for exponential climate action towards net-zero emissions". It is a playbook focussed on simplicity and speed and is grounded in the latest science and aligns to delivering the UN Sustainable Developed Goals. We use it to guide our own efforts here at everfocus and encourage your business to explore it too.


Cover of "The 1.5 deg C Business Playbook" Building a strategy for exponential climate action towards net-zero emissions
Diagram 4: The 1.5 deg C Business Playbook

How can we help you?

If you feel you do need external help to explore and reduce your carbon footprint, we would love to be part of your journey.


At everfocus our vision is that both our local and global community embrace sustainability and work collaboratively to achieve it. Our mission is to create a valuable service that enhances business focus on being sustainable.


We take out the complexity, find simple and practical solutions that will last in your business, and leverage a collective team experience of 40+ years working across sustainability issues in many different industries.


The logo of boutique sustainability advisory, everfocus.  We help businesses be sustainable, and be better.

References

1. IPCC. Summary for Policymakers. In Global Warming of 1.5 C. An IPCC Special Report on the impacts of global warming of 1.5 C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. Geneva, Switzerland: World Meteorological Organization, IPCC (2018).

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