If you’re feeling overwhelmed, fear not as we’re here to give you a one-stop, easy-to-use guide for small business carbon footprint calculations.
There is no current requirement for SMEs in the UK to measure and report their carbon emissions.
However, a Global research conducted by the Economist Intelligence Unit (EIU) shows a 71% rise in the popularity of searches for sustainability over the past five years. What does this mean?
Considering the rise in consumers’ environmental consciousness, investors and suppliers’ pragmatic approach to sustainable corporate policies, and the growth in general desire to do better for the planet, it is likely that we will witness a massive increase in SMEs starting the process of calculating their carbon emissions.
If any of those reasons are of interest to you, we have some great news for you! Calculating small business Greenhouse Gas emissions (GHGs) is what we do best, so we thought it may be useful to impart some of our knowledge for those looking to do the same.
After scouring the web for blogs and articles on how businesses (especially SMEs) can calculate their carbon emissions, we found that:
- There isn’t a master guide with all the information your business would need in a one place.
- Most of the articles are riddled with jargon that is difficult for non-specialists to understand.
- There is a fair amount of conflicting advice out there, making the whole process seem more out of reach for smaller businesses.
If you’re feeling overwhelmed, fear not as we’re here to give you a one-stop, easy-to-use guide for small business carbon footprint calculations.
If you’re looking for the “why”, you’re in the wrong place - check out our blog on why small businesses should calculate their carbon footprint.
If terms like scope 1, 2, and 3 emissions confuse you - check out our handy sustainability jargon page. Please let us know if there is one you would like us to add, we’d be happy to do so!
Now that you are sufficiently prepared, let’s get straight down to it...
The Process of Calculating Carbon Emissions relating to a business
The best place to start is with the GHG protocol: Corporate Standard. This is the go-to methodology for calculating carbon footprints. If you are considering calculating your businesses carbon footprint, that is the place to start. There you will find all the detailed methodology for measuring different aspects. If you are wanting to find out more about the process involved...read on!
The first step is to decide on an accounting period, this is usually a calendar year as it makes it easiest when collecting data. This is the period of time that you will be considering for this calculation. When people talk about the about the carbon footprint of a business, it is usually the emissions caused by that business within a year time period.
What causes emissions?
The next step is to map out your business in order to identify the areas that you need to consider. With this map, you can assess what the company does and how it achieves its goals. Then we need to figure out how these actions cause emissions and finally how we can actually measure those emissions. Try answering the following questions:
- What does my business do?
- What materials and processes are required to achieve these operational goals?
- What actions cause emissions within those operations? This should include the whole value chain.
- Of these emission sources, which are my responsibility?
- Of these emissions that are my responsibility, what are measurable consequences of this action that I can use to quantify the degree of that behaviour and connect it to emissions?
The best way to make sure you have covered all the bases is to sit down with the list of categories from the GHG protocol and systematically go through them.
Here they are:
Scope 1
- Fuel
- Gas
- Fugitive emissions - refrigerant leaks etc
Scope 2
- Electricity
- Purchased heat or steam
Scope 3
- Purchased Goods and Services
- Capital Goods
- Fuel and Energy-Related Activities Not Included in Scope 1 or Scope 2
- Upstream Transportation and Distribution
- Waste Generated in Operations
- Business Travel
- Employee Commuting
- Upstream Leased Assets
- Downstream Transportation and Distribution
- Processing of Sold Products
- Use of Sold Products
- End-of-Life Treatment of Sold Products
- Downstream Leased Assets
- Franchises
- Investments
The Greenhouse Gas Protocol doesn’t include some elements that we believe are important as they do have emissions associated with them. Namely:
- Working from home
- Web hosting
- Online tools
Where can I find carbon footprint data?
With a list of emission creating activities we now need to collect data. Some of this is going to be easy like kWhs for electricity found in your energy bills. Some of it a little more difficult such as Employee Commuting and WFH emissions (top tip: build a survey to send to employees for these two).
Where to look:
- Energy bills
- Accounting software
- Expense software
- Delivery data
Now you need to convert this activity data to kgCO2e. This is done using “conversion factors”. Very helpfully, hundreds of academics around the world have researched product lifecycles and economic systems to ascertain the kgCO2e per functional unit (a functional unit is a nice way of quantifying an activity, such as kWhs in the case of electricity consumption).
According to the UK government official statistics, 1kWh produces about 0.22 kgCO2e (not including transmission and distribution).
Therefore, we can multiply our number of kWhs with the emissions factor to get kgCO2e.
kWh X kgCO2e/kWh = kgCO2e
These factors are dotted around the internet but the best place to start if you’re based in the UK is the publicly available UK GHG conversion factors. There are also some large private datasets of which one of the largest is ecoinvent. Unfortunately, this is behind a paywall but if you are serious about these calculations it can make your life a lot easier.
Once you have completed this for all of your business activities, you add them up for the entire year. This yearly quantity of emissions is your carbon footprint.
How to use your carbon footprint calculation
Once you’ve calculated your carbon footprint, you can begin to use this data to understand where you can reduce your emissions.
You should set suitable targets achievable over 5-10 years to reduce your emissions. Have a look at the Science Based Targets initiative for an idea on what those reduction targets should look like. Longer term targets to reduce as much as possible (some standards state 90 - 95%) are known as Net Zero targets.
Once you have set these targets you can offset your carbon footprint to go carbon neutral! Get in touch if you would like to purchase Gold Standard Verified Emission Reductions from us at C Free.
This all still seems quite overwhelming
You’re not alone in thinking like this. A survey by Sage with over 2,000 decision-makers at SMEs in the UK showed that even though a lot of businesses wanted to become more sustainable, they faced certain challenges:
- 33% said cost
- 27% cited lack of time &
- 25% said lack of in-house skills
We understand these issues, it’s what we have based the formation of our business on. We have developed a set of tools and algorithms that make this whole process easier and more efficient. We use machine learning and AI to process large sets of data for you, giving accurate carbon footprints without having to go through each and every transaction, delivery, or employee survey. All raw data can be different, hence why simple online tools can still be time consuming to use. We build tools specific for your data so that we can use it year on year to track reductions.
Get in touch if you’re curious or book in some time and we will take you through the process.
