So, in practical terms, what should an SME be considering?
For Wasley, the first step is to assess your emissions through a GHG inventory or energy audit. “The findings will help you to quantify emissions, set a baseline, and highlight areas with the biggest potential for reductions.” It may seem daunting, she warns, but there are resources available to SMEs to overcome information barriers.
A good starting point is the GHG Protocol, which hosts accounting tools applicable to a range of businesses, in addition to country-specific and sector-specific tools. The US Environmental Protection Agency’s Center for Corporate Climate Leadership Simplified GHG Emissions Calculator is a simplified calculation tool to help small businesses and low-emitter organizations, regardless of their location, to estimate and inventory annual emissions. Herman also suggests contacting higher education institutions, where many professors want their students to have real-world case studies. “You could get an intern or a student to conduct a basic energy audit or make a sustainable business plan for your business.”
… then look for the efficiencies
Armed with the facts, look for efficiencies by reducing consumption, switching to low-energy or renewable products and cutting waste. Having implemented reduction measures, you can start thinking about electric vehicles and switching to renewable energy, whether through green tariffs from your utility or on site — for example, by installing solar panels.
Wasley advises pragmatism: “Start with the low-hanging fruit: look at the more direct Scope 1 and Scope 2 emissions to begin with, which don't take a lot of time or resources. Don’t aim for major changes immediately because unless you’re prepared to rebuild your entire company, it won’t be realistic. It’s crucial to set targets that are both achievable and ambitious. Many of our carbon-reduction efforts are focused on 2050 but that’s a long way off; set a ten-year target, measure your progress and adapt your plan as you go.”
It is also useful to benchmark your efforts and the efficiencies you are seeking to make against your peers. Another resource from the Center for Corporate Climate Leadership that Wasley recommends is the GHG Inventorying and Target Setting Self-Assessment, a technical tool that allows companies to evaluate their approach, as well as offering useful insights into what other companies are doing.
If you are part of a supply chain, and your customer has requested information, don’t be afraid to ask them for help, adds Herman, because they may have resources in place to help collect that data. “Much of our work is supporting clients to track their emissions, and those of their suppliers. I have advised many SMEs on how to calculate their GHG emissions because ultimately they don’t want to risk losing a customer.”