Since the Paris Agreement, those pursuing the media will be severely pressured to avoid the accumulated targets of big corporates by announcing their net zero steps and schemes, such as the Science Agenda Raised Initiative (SBTi) raised by the Media Agenda.
But what about small business? Shane Hughes, Carbon Consulting Lead, Rambler explains that sustainability and climate change are not just for well-known brands. No minimum size required. Net zero race is not a queue for a theme park ride Efforts and commitment from SMEs are vital if the UK wants to achieve its net zero target that SMEs make up more than 90% of the UK’s business population.
Environmental policy formulation is only one way. Whether this policy-making momentum will be sufficient to address the challenges that society may face is entirely a matter of debate, but it is clear that government control will only become more limited. An example is, among others, the introduction of Procurement Policy Notice (PPN) 06/21 in September. This PPN stipulates that any company that wants more than £ 5 million in government spending must have a Net Zero strategy. It’s not just the government, but major buyers are also beginning to need a change in their supply chain: Network Rail has promised that 75% of its suppliers (by emissions) will have a science-based target (SBT) by 2025; Nandor Chickenland Limited is committed to reducing price chain emissions by 42% per meal by 2030; Canary Wharf Group is committed to having an SBT of 60% suppliers by 2025.
Contracts are becoming dependent on environmental compliance and good sustainable performance is quickly becoming the new face of opportunity, sometimes pointing to the bottom line of a business. Check out the sustainability boom associated with money and investment, or the packet of food in your closet is now announcing its carbon footprint. A recent study by Deloitte on consumer behavior and sustainability found that about 1 in 3 consumers said they stopped buying certain brands or products because of sustainability or ethical concerns.
Most importantly, the science of showing the risk of climate catastrophe has become unequivocal. The center of gravity has shifted and even workers are becoming more vocal about their willingness to work for organizations that are taking their climate response seriously, a powerful call for action at a time when the employment market is fluid and employee retention has become a huge and immediate challenge.
Of all the possibilities, most of the above arguments have already been won The real challenge for small businesses now is how they work, rather than how they should work. Given so much greenwashing and uncertainty what is it like to see a credible net zero strategy? Is it too much for a company to accept?
SBTs have been the main route for big corporates to demonstrate credible ambitions but, surprisingly for some, the acquisition of an approved SBT is not just a saving for big corporates. Often small companies avoid processes like SBT because they do not have a sustainable division and the administrator’s burden of managing such a scheme is inconsistent. Rambler sees it through a lot of certification schemes. An approved SBT is really very achievable for SMEs with a five-step pragmatic approach to start delivering the change needed to address the challenges of climate change:
Large or small, any company setting carbon reduction targets must calculate their chances for selected base years (e.g. 2019 or 2020) 1 and 2 CO2 emissions (e.g. gas, electricity and fuel used in proprietary vehicles). It should be relatively straightforward and luckily there are plenty of free resources available, such as this Carbon Trust Net Zero Journey Planner and this Carbon Calculator. One expert suggests that in most cases choosing market-based reporting for Scope 2 electricity would be the preferred method, especially when your onsite renewable installation capacity is limited and you have to rely on green electricity tariff purchases to decarbonize your electricity costs.
Value Chain Scope 3 The process of calculating emissions is much more time and expense when calculating emissions (such as business travel or use of your product or emissions from the products and services you purchased). However, unlike the larger companies, SMEs do not need to set opportunity 3 targets for SBTi. So go for it! Complete step 1 and submit your CO2 emission number and select a 1.5 ° C target (which is equal to 4.2% reduction pa). There is an option for a well below the 2 ° C target (2.5% reduction PA) but that option is not generally recommended for companies that want to demonstrate a credible level of climate commitment to employees, customers and regulators. SMEs have a dedicated ‘streamlined route’ for an approved SBT, which will cost only $ 1,000 instead of $ 9,500.
SMEs do not need to submit a Scope 3 target, however, they must be committed to measuring and reducing their Scope 3 emissions. This gives them some time to invest in gradual skills and capacity building and to learn more about this critically important window in the value chain. Start by making an estimate for all 15 Scope 3 emissions using the GHG Protocol Quantum tool. The tool contains some unnecessary errors and uses proxy data from the US so Ramboll has developed a slightly more refined and country-specific version to use with clients, but it says that using the free tool is enough to start a business. Since it is approved by the GHG protocol, it has reliability.
SMEs should use the estimation process to identify which is the largest source of their Scope 3 emissions and should overlay it with the knowledge of local government requirements for future proof and define which Scope 3 emissions data collection should start. For example, the UK has the Streamlined Energy and Carbon Reporting (SECR) regulation, which requires Scope 3 business travel emissions reporting and PPN 06/21 requires business travel, upstream and downstream transportation, employee commuting and waste emissions. With the goal of including 95% of total Scope 3 emissions in overtime reporting, businesses should increase the percentage of Scope 3 emissions over the years that they collect and report data.
Finally, SMEs should identify and implement emissions reduction measures. This step can be run in parallel with other steps. There is no need to wait for all the data if there is a clear and unambiguous way to reduce the impact of an organization on climate change. However, once traders get visibility of their total emissions, it will begin to announce their carbon reduction plans in line with their 1.5 degree Celsius target.
The latest thought
Finding a business solution to work in a sustainable society is a stressful affair. Entrepreneurs need to take the challenge seriously from both a regulatory and innovative perspective and act now. They should not be pushed into a false sense of security because the government has not yet looked into them. The law will come, and SMEs need to make sure they are not shaken. The growing sophistication of the sector has brought environmental compliance within reach. Businesses ignore this at their own peril, because they will pay later