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Develop a low carbon strategy for your business
Develop a low carbon strategy for your business
Many companies in Scotland are working to reduce their greenhouse gas emissions and transition towards being low carbon operations. This guide explores what low carbon and net zero mean, why it’s worth developing a low carbon strategy for your business and how you can do this successfully.
Many experts view climate change as a defining issue of our time.
Impacts like shifting weather patterns have the potential to threaten food production and livelihoods worldwide, alongside risks of rising sea levels and flooding.
The Paris Agreement in 2015 saw 196 of the world’s governments commit to preventing dangerous levels of climate change by limiting global warming to well below 2C.
Assessments suggest that, without concerted efforts from governments, citizens and businesses, climate change will likely exceed 2C. This could have a significant effect on people and ecosystems across the globe.
What is net zero?
Many companies set net zero emissions as their target. If a company reaches net zero, it means that its business activities result in no net impact on the climate from greenhouse gases.
This can include the removal of any remaining greenhouse gas emissions using carbon offsetting.
Low carbon economic opportunities
The move towards more sustainable business models is underway globally and gaining speed. Every sector in every market will be transformed.
Scotland’s climate change legislation is world leading. The Scottish Government has a target date for net zero emissions of all greenhouse gases by 2045. These commitments show that Scotland is accelerating its transition towards a low carbon economy.
Companies, ranging from multinationals like Unilever and BP to Scotland's leading sustainable SMEs, understand the important role they must play in reducing operating, product and supply chain emissions. They also recognise the vibrant economic opportunities presented by a low carbon business model.
What is low carbon?
'Low carbon' is shorthand for a reduction in carbon dioxide, as well as other greenhouse gases (GHGs) like methane, nitrous dioxide and CFCS.
By converting all of these emissions into 'carbon dioxide equivalents' (CO2e) you can easily compare your company's overall greenhouse gas impact using one figure.
Put simply, if you reduce the CO2e of an activity, you lower its global warming impact.
Why adopt a low carbon strategy?
Companies across Scotland are aiming to reduce carbon emissions and, in many cases, become net zero operations.
There are many benefits to developing a low carbon strategy.
By minimising the carbon footprint of your business, you can cut energy costs, increase sales, find new markets, support customers' low carbon goals, improve employee morale and reduce overheads through efficiency savings.
Calculating your carbon footprint: what you should know
Emissions are broken down into three categories by the Greenhouse Gas Protocol:
- Scope 1: All direct emissions from the activities of an organisation or under their control. This includes fuel combustion on site, such as gas boilers, fleet vehicles and air-con leaks.
- Scope 2: Indirect emissions from electricity purchased and used by the organisation. Emissions are created during the production of the energy that's eventually used by the organisation.
- Scope 3: All other indirect emissions from activities of the organisation, occurring from sources that they do not use or control. These usually create the greatest share of the carbon footprint. They cover emissions associated with supply chain impacts, business travel, procurement, product use and final disposal.
You should include their direct (Scope 1) and indirect (Scope 2) energy emissions when you lay out your low carbon plan. However, depending on which standards they follow, some companies choose not to include all Scope 3 emissions. It's crucial to clearly state what you are including in your strategy.
If you sign up for the Science Based Targets initiative (SBTi), PAS 2060 or the GHG Protocol Scope 3 Standard, all significant Scope 3 emissions are included in calculations.
To report on the GHG emissions associated with your business activity, you'll have to convert your carbon emissions into 'activity data' like:
- Distance travelled
- Litres of fuel used
- Tonnes of waste disposed
You can find the latest UK Government conversion factors for reporting GHG emissions on the GOV.UK website.
The carbon footprint of individual materials can be found using the free Idemat app.
What is carbon offsetting?
Carbon offsetting is the practice of putting funds towards organisations that help the environment by lowering or reducing carbon emissions. Reforestation projects are one example.
It's best to use a verified scheme (for example, Gold Standard schemes) where possible, with additional environmental and social benefits.
Creating your low carbon strategy
So, how do you start to build a robust and practical low carbon strategy? How can you embed good practice and ensure all operations understand and reduce their carbon impacts?
Although each strategy is unique, the following guidance covers some common and crucial considerations.
When creating a low carbon strategy, many organisations start by focusing on their leadership and commitments.
Are the board and directors fully onboard? Without strong leadership and responsibility at a senior level, it can be difficult to truly embed a low carbon ethos in your company. Perhaps consider a dedicated low carbon sponsor at this level to oversee long-term success.
A low carbon policy provides a succinct overview of the company’s overarching commitments. It's vital to ensure this aligns with overall company strategy.
Make sure there's a clear plan for embedding low carbon within the company. For example, how will you harness the motivation and ideas of staff?
To help drive your sustainability strategy forward, consider the development of a low carbon team from different sections and levels of the organisation.
Understand the risk, opportunities, interest and collaboration potential of your stakeholders. This includes customers, investors, sectors, staff, local communities and supply chains.
Consider how your company will adapt to new markets and the impact of climate change itself. Join other like-minded groups and companies on your low carbon journey.
Assessing your carbon impact will require clear and transparent calculations of your carbon footprint.
Your assessment must be underpinned by robust systems for data collection, monitoring and reporting. Without this, your ability to credibly report your emissions, achieve targets and manage the increasing demands for transparency will suffer.
Careful consideration and definition of the scope and boundaries of activities, products and services within the carbon assessment is key. For example, are you considering all company sites and operations? Will you consider indirect emissions (Scope 3) as well as your direct emissions?
Be clear about why you make your choices. Do not cherry-pick. Always follow the five key principles of the Greenhouse Gas Protocol (GHG): relevance, completeness, consistency, transparency and accuracy.
Download the Greenhouse Gas Protocol Corporate Standard (PDF, 3.5 MB)
A clearly written description of your methodology should be used.
Decide on a baseline. Normally, a defined twelve-month period is used as an historic point of comparison. This allows you to more easily track carbon reductions and assess progress against targets.
This carbon assessment will help you understand the scale of your impact, helping you to prioritise actions accordingly.
With good carbon data now available you should now be able to start developing clear, robust low carbon objectives. However, to ensure these are achievable, think carefully about carbon reduction opportunities within your company.
This will include energy and resource efficiency opportunities, changes in assets (for example a move from diesel to electric vans), and the generation of low carbon electricity through renewables.
If your company is aiming for net zero or carbon neutrality, you'll need to consider carbon offsetting for any carbon emissions remaining after company reductions have been made.
A road map or implementation plan leading to your target is essential. Key considerations are investment requirements, expected technology advances, in-house innovation and design, and projected business growth. Consider creating intermediary targets for your long-term goals.
Even if you can't quantify some of your emissions accurately yet or decide on a realistic target, these can still be an important part of your low carbon strategy and should have actions associated with them. Examples include ‘embodied’ carbon of products (for example, the carbon impact from raw materials, production, use and disposal) or investment impacts.
Remember collaboration and innovation with stakeholders will be key to supporting long term success in achieving net zero.
Before voluntarily reporting carbon footprint, targets or net zero/carbon credentials, many companies consider external verification from third parties.
For example, auditing bodies and consultancies can provide third-party assurance for your reports, or certification to the carbon neutrality standard PAS 2060.
Of course, this can be completed in house, but third-party verification can add credibility and provide you with recommendations on improving your reporting, data and calculations methodology.
The following list provides some common standards, pledges and initiatives to consider:
- The harmonised Greenhouse Gas Protocol and PAS 2050/ISO 14064
- Standard for Carbon Neutrality, BSI PAS 2060
- Carbon Trust Product Footprint label
- UK Green Business Council Net Zero Carbon Buildings
- Carbon Disclosure Project
- The Climate Pledge
- UN Race to Zero
Contact us
If you’re interested in finding out more about the topic of this guide or any other aspect of making your business more sustainable, our sustainability team are here to help.