Learn how to track the carbon emissions of your business
The recent New Zealand government legislation making climate-related disclosures mandatory for large organisations is expected to have a knock-on effect to businesses of all sizes – including SMEs who supply or plan to supply larger businesses.
Whether you work with an organisation required to disclose their climate-related emissions or not, there’s now an imperative for you to understand your business’s carbon footprint, because sooner or later, it will become the norm.
However, for SMBs right now, it remains a competitive advantage. So, how do you measure the carbon footprint of your company or your product? What carbon emissions do you need to track and how do you communicate that in a business sense?
Here’s what you need to know about how carbon footprints are measured and how to calculate the carbon emissions of your business.
What is a business carbon footprint and why should you measure it?
Your business’s carbon footprint is an estimate of the emissions released by your business activities over the year.
The benefits of understanding your business’s carbon footprint are numerous:
- Increase your business’s opportunities both to individual consumers and large organisations
- Increase your business’s reputation and be on the right side of history
- Attract and retain employees by showcasing how you’re doing good
- Be seen as a leader at the forefront of change
Greenhouse gas (GHG) emissions reporting is only entering the mainstream now, and by taking the time to understand your business’s carbon footprint early, you’ll give your business a first mover advantage.
Let’s look at what you need to measure to understand your business’s carbon footprint and how.
What you need to measure to calculate your business’s carbon footprint
There are plenty of free online calculators to help you calculate your business’s carbon footprint. These are great resources to use when you understand what you need to measure, but they won’t do your business any good if you don’t.
So, what do you need to measure and why?
According to the leading GHG Protocol corporate standard, a company’s greenhouse gas emissions are classified into three scopes:
- Scope 1 emissions are direct emissions from company-owned and controlled resources
- Scope 2 emissions are indirect emissions that a company owns from the generation of purchased utilities such as electricity and gas.
- Scope 3 emissions are indirect emissions that a company does not own; things like business travel, waste generation, employee commuting, and purchased goods and services.
Although as an SMB in NZ emissions reporting is voluntary (at this stage), there are still loads of benefits it can yield for your business, which begs the question, what should you measure?
Right now, the answer depends on why you want to do it; Is it to prepare for future mandates? Appease your clients’ requirements? Clean your conscience? Or pivot your brand to appeal to the growing conscious consumer?
Whatever it is, understanding what you want to get out of it is key.
For example, if you’re looking to prepare for the future or ensure your emission data will appease larger organisations then understanding the regulations outlined in the legislation for public and private entities by the NZ government is a good place to start.
Both the CNGP and CRD regimes are modeled after and align with the globally implemented framework set out by the Task Force on Climate-related Financial Disclosures (TCFD) which outlines how enterprises can adhere to climate-related disclosures to the best international standard. Although as an SMB you won’t need to disclose your C02 emissions to this same level of detail. Understanding what larger organisations must report on will give you an idea as to where to start and what to focus on. If you can help them identify and report on their scope 3 emissions, you will be in a better position to do business with them.
Regardless of why you’re doing it, it’s best to follow a trusted example so no efforts are wasted. Measuring against a common standard like the ISO 14064-1 for organisations is one of the most recommended places to start. It will give you a list of what you should include, and measure, when calculating your business’s C02 emissions so you can feel confident in the claims you then make on behalf of your business.
With all that said, there are 5 areas in any business that are worth measuring regardless of what you’re intending to do with the results. At ESP we’ve been helping businesses of all sizes measure their carbon footprint since 2004 and these are what we’d recommend measuring:
- Vehicles including owned cars and taxis
- Flights
- Energy use
- Waste
- Freight (e.g. courier services & deliveries)
How to calculate your business’s C02 emissions
Enter a quick Google search on, ‘How to calculate your business’s C02 emissions’ and you’ll be met with a plethora of free calculators that you can use to get the job done. These, of course, will give you a good indication, but they require a lot of manual data entry making them significantly more error prone than other tools out there. Not to mention as they are often a free, one-off tool, most are based off estimations and not geared toward, or aligned with any international standard. While you will receive a number you can use, it is not always a reliable one you can apply across your business.
Aside from these free calculators, chances are you’ll also come across a growing range of emission management platforms that are geared toward enterprise-level organisations. These tools have their place but are often too expensive and detailed for many SMB’s needs.
That’s where CarbonHUB comes in.
It’s been built specifically for small-to-medium sized businesses that are interested in knowing their business’s C02 emissions. It’s simple to use, affordable, and designed to the ISO 14064-1 standard meaning that the results you’ll glean are trustworthy and aligned to what enterprise-level organisations are interested in.
