Sustainable Business Series 2022: Reducing your carbon footprint, carbon neutrality and net zero


This blog post has been produced for the Greater Birmingham Chambers of Commerce as part of the 2022 Sustainable Business Series.

The Sustainable Business Series seeks to help local firms understand the role that they play in progressing to net zero, as well as the opportunities and challenges that may arise from the net-zero transition. Through an expansive range of blogs, webinars, events and podcasts, the Sustainable Business Series offers useful information to businesses interested in adopting a sustainable business approach.

See the Sustainable Business Series webinar’s and events here.

Latest trending topics, that are few decades old and well developed, yet new to us in the business world. The question on most small and medium sized business owners mind is, where to start, how much is it going to cost, how will it benefit the business and the local society (or the UK or the world).

Well, it’s simple, a SME can start by putting the house in order. And if you are smart about it, understand the overall concept, acquire few mathematical and leveraging skills along the way, it might cost nothing or very little (especially compared to your return on investment).

Start with an energy audit. If you are in to trading or services industry, it would be a breeze. But if you are in to manufacturing, it gets a bit complicated. Still, it’s doable. Break the operation into small chunks and see where the energy is being used up. Look for energy intensities and areas where there are wastages. Leakages in the transmission of heat or cooled air, lighting, machinery that is obsolete, building insulation etc are hotspots. Once you think you have done all you can, obtain the services of an anergy auditor. They don’t cost much; maybe £300 to £500 a day and you can recover your full cost the moment you get your new energy bill!

The Carbon footprint is a bit complicated. The reason being that there are six major atmospheric releases causing global warming, that are for, ease of reference being covered under the term carbon. Carbon is predominant in quantity, but the other greenhouse gasses are nastier. However, all gasses are considered from a point of view of ‘global warming potential’ and converted to equivalent carbon emissions, and hence the name ‘carbon footprint’. Relevant calculation and conversion tools can be found on free to use websites and ‘greenhouse gas protocol’ is one that I use.

To enable the above foot-printing to begin, some homework is required. GHG emissions are reported depending on their point of emission and ownership. So, the company must understand and define emissions scopes 1, 2 and 3. Ideally the company can work with scopes 1 and 2 to begin with and commit to develop the scope 3 during the 2nd or 3rd year.

Organisational ‘carbon neutrality’ is when an equilibrium is reached in emitted and withdrawn carbon from the atmosphere. So, a SME can avoid and reduce carbon emissions as much as possible and then offset the remainder.

‘Carbon neutrality’ and ‘net zero’, conceptually mean the same thing. It’s the contextuality that is different. Whilst carbon neutrality is from the organisational contextuality, ‘net zero’ is from a global context. To achieve net zero, the company attempts to keep the global warming to a pre-agreed increase level (1.5oC over pre-industrial average) by contributing to avoiding and offsetting carbon emissions.

All this, a SME can initiate through its own people resources. The appointing of a cross functional team and obtaining relevant training, where knowledge gaps exist, will get you there. Once the information and the internal effort reaches a point where you know you need outside assistance, a consultant could be brought in to fill in the blanks and for any corrective measures (if any).

Once, the company develops, and discloses the information, there is another mandatory phase. And that’s the ESG assurance from a 3rd party such as SGS United Kingdom Ltd. The assurance will enable the company to continuously improve and validate the internal processes and procedures, and disclosure output. 

Also, you can read through the book ‘ESG for SMEs’ (authored by me) available on Amazon, and it would point you and your team in the right direction, one step at a time.

Indika Edussuriya