A Pathway to Net Zero for SME's
Updated: Dec 14, 2020
What is Net Zero?
Put simply net zero carbon (or carbon neutrality) means either:
a) Causing zero carbon emissions - e.g. sourcing 100% of energy requirements from renewable / no-carbon energy sources;
b) Removing from the atmosphere the same amount of carbon that is caused by an activity, service, product, etc. - e.g. planting enough trees to offset the same amount of carbon emitted
For the typical UK SME achieving either of these in practical terms across all activities and operations is likely impossible or at best prohibitively expensive and onerous. As new solutions and strategies develop over time, this may become less challenging, however there is only so much SMEs can currently do. To reach true net zero by 2050 (2045 in Scotland) UK and devolved governments will have to step up with clear legislation and funding. The current pricing signals and ‘laissez fair’ approach will not deliver the required emissions reductions.
However, businesses cannot afford to wait for governments if they want a smooth transition to net zero. The best initial steps towards net zero for SMEs is simply to have their house in order regarding their carbon emissions.
Net Zero Pathway for SMEs - Taking Control
SMEs should formulate a plan and take clear and demonstrable steps to measure, control and reduce carbon emissions (under their control) from business operations and activities as far as is practicably possible, to provide the best possible contribution to achieving net zero carbon by 2050/2045 and mitigate climate change.
Controlling and reducing carbon emissions is clearly an ongoing process; the first steps – starting with scoping and measuring (below) - should be taken as soon as possible.
There are multiple reasons why SME’s should take steps towards reducing their carbon footprint:
To demonstrate social and environmental responsibility, and respond to requests from business, customers and investors for carbon emissions data;
To build / enhance and future-proof brand and company value;
To mitigate impacts of carbon taxation and legislation (i.e. risk management);
To reduce operational costs – and, potentially, develop new income streams;
To ensure continued efficiency and continuity of business management and operation.
Commit to act
Scope & Measure
Develop Net Zero Plan
Implement and Act
Verify and demonstrate
A crucial early step is to scope and measure carbon emissions using accurate and consistent data.
Defining boundaries for carbon emissions over which an SME has control / influence (i.e. the carbon footprint) – which could include energy used in buildings, business travel & transport, waste and supply chain activities.
Collecting and presenting the data so that it can be clearly understood and analysed to inform an effective and realistic carbon management strategy, targets and action plan.
We help SMEs at each and every step towards understanding and reducing their carbon emissions. This includes:
Scope & Measure
Establishing and undertaking efficient data collection
Creating a robust baseline from which to measure
Conducting energy audits
Develop a Net Zero Plan
Establishing management strategies based on findings and analysis
Setting science-based targets
Identifying strengths, weaknesses and opportunities
Producing zero carbon pathways
Implement & Act
Providing oversight and advice
Verify & Demonstrate
Benchmarking, disclosure and assurance
Reporting – PRI / CDP / TCFD / GRESB / UNSDG / SASB / GRI
Governex is an ESG advisory business that helps businesses with corporate governance as well as answering the question of how they make positive contribution to the environment and social issues.
We help organisations implement the right shift in focus from a purely financial commitment to include environmental, social and governance commitments. All in the context of meeting business purpose, strategy, integrity and diversity.
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© Governex Limited 2020
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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