To become sustainable, small and medium Small businesses to become sustainable need to take bold actions to reduce their footprint setting a path to carbon neutrality – while inspiring their customer and employees.
Introduction
Leading companies are on track to carbon neutrality. Not only they work on the present but are investing in the future. Amazon has commited to become carbon neutral by 2040, while Apple claims to already be carbon neutral (not exactly as their suppliers and manufacturers will only switch to renewable energy by 2030). Even cities such as Copenhague committed to carbon neutrality by 2025. Research shows that 25% of the world’s top corporations have commitments for climate action by 2030, x4 the number of companies with commitments since the Paris agreement in 2015.
These are extraordinary times. Greenhouse gas emissions are responsible for global warming, changing or destroying ecosystems, and come at enormous human and economic costs. If we continue business as usual there are dark clouds ahead, the projections done by the Intergovernmental Panel on Climate Change (IPCC) show that if we do nothing:
1) We would double the CO2 in the atmosphere between now and 2050;
2) An increase of the global mean temperature in the range of 1.5°C to 4.5°C, this means, that locally the temperature increase might be higher (imagine a summer at 50°C, before the end of the century);
3) Sea-level rise of about 0.3—0.5 m by 2050 and about 1 m by 2100, together with a rise in the temperature of the surface ocean layer of between 0.2° and 2.5°C.
Path to carbon neutrality
It is not a question of “why” but of “how”. While large companies have an army of employees that can take the lead and financial muscle to make changes, small businesses are lacking behind. But size is an advantage when defining a path to carbon neutrality.
“COVID-19 is awful. Climate change could be worse.”
Bill Gates
The good news is that there are small companies successfully doing this transformation, and all business leaders can learn from their wins. Here are the key elements to succeed in becoming sustainable.
Start now
Unfortunately we do not have time to wait. Every company, big and small, needs to create a plan to avoid a climate disaster—to use the zero-carbon tools available today, develop and deploy new solutions, and help others to mitigate the impacts that we are already seeing today. We are building programs that will help innovations scale around the world, and making the case that we need to invest in solutions that will limit the worst impacts of climate change.
Some governments and private investors are investing and developing policies that will help us get to zero emissions. And we need to act with the same sense of urgency that we have for COVID-19.
But there is also an advantage, first movers will be in a better position. Companies create higher value by investing in sustainability. Harvard business review already wrote about this in 2012, showing how companies that invest in sustainability do better financially (article here.
Set an ambitious goal
Most successful transformations come from ambitious goals rather than incremental changes. This means aiming for carbon neutrality in operations and supply change.
If you want to succeed, you need to be bold. In sustainability this means: reducing your footprint, securing and sourcing sustainable products, diverting from fossil fuels… Become an agent of change. Some companies are surpassing the 100% goal and are removing CO2 from the atmosphere, Stripe, the online paying platform, became carbon neutral in 2018, and has pledged last year to contribute $1M per year to remove carbon dioxide from the atmosphere.
Finally, the goal needs to be communicated effectively to the employees, the customers and other stakeholders. They need to become your sustainability partners for your company to succeed.
Move fast
This is a clear advantage for small companies, as a small company, change can happen much faster. Amazon will only become net zero carbon by 2040. Their plan is to quantify total greenhouse gas emissions attributed to their direct and indirect operational activities. Then, they will develop tools and programs to reduce their emissions, with an overall goal of carbon neutrality by 2040.
However, there is no quick fix for climate change. We need sustained action worldwide. Companies can quickly offset their emissions quickly, but the challenge will be avoiding those emissions in the first place, and this will take a longer time.
Keep track
Measure, reduce and offset your carbon emissions. Those are the three pillars of carbon neutrality. The assessment starts with the measurement of all business carbon emissions from the energy that powers the operations, to production, including transport.
First, start by measuring your direct emissions (Scope 1), that come directly from the offices and factories that you own or operate and that are under your direct control. The fossil fuels used onsite in manufacturing or in company vehicles as well as the residues that you generate.
Then, focus on indirect emissions. Scope 2 accounts for Greenhouse Gas emissions from the generation of purchased electricity, steam, and heating/cooling. These emissions are produced at the facility where electricity, steam and cooling or heating are generated. But as a consumer, you are responsible for the emissions. As an example, Apple’s stores, offices, and data centers are powered by 100% renewable electricity.
Finally, measure and monitor scope 3 emissions, that result from the goods and services you buy or outsource, employee commuting and business travel, waste, water and the whole lifecycle emissions of products or services that you sell. Coming back to Apple, right now their operations, from commute to business travel, are carbon neutral. However we will have to wait until 2030, so all their products will be too. In order to do that, their supply chain – that includes hundreds of manufacturing suppliers – will have to switch to 100% renewable sources of electricity.
Share your wins
Communicate with your clients and your employees your goals to drive change. Setting a positive tone is key. Clients priorities have changed, in the last few years, sustainability is key.
86% of millenials expressed interest in sustainability
Institute for Sustainable Investing. Morgan Stanley.
Employees need to aspire to something greater, sharing key values is more important than ever, as younger generations are well educated and more concerned on sustainability. To make change possible you should engage and communicate with them. Without the employees support it is difficult to carry an effective transformation as everyone does their own thing.
Learn how we at Decarb became a carbon neutral company. If you need help, contact us, we will be happy to help with your path to carbon neutrality.
