There has been much hype surrounding climate change and emissions trading schemes. But what does carbon management mean for SME owners and how can it benefit their business?
While SMEs may not be required by law to report or reduce their carbon emissions, taking the right steps to improve or enhance their environmental credentials makes good business sense.
As with many business issues, being prepared and taking action sooner rather than later are the keys to a smooth transition and can help deliver the right business outcomes. Understanding what action to take is critical. To help you take some big steps in the right direction, here is a snapshot of carbon management lore.
There are two pieces of government infrastructure that SMEs may have heard about:
1. The National Greenhouse Energy and Reporting (NGER) Act: Implemented on July 1, the Act requires Australian corporations to account for greenhouse gas emissions and energy production and consumption, if they are above the specified thresholds.
2. The proposed Emissions Trading Scheme scheduled to commence in 2010: The emissions measurement required by the NGER Act also lays the groundwork for the affected businesses to engage in emissions trading through existing channels and, eventually, via the Australian Emissions Trading Scheme.
Although the greenhouse gas emissions and energy production and consumption of most SMEs will typically fall below the legislated thresholds of the NGER Act, they are still likely to feel the impact indirectly. The trickle-down effect from increasingly carbon-conscious clients seeking out more sustainable suppliers will force a review of smaller business’ practices and operations.
The business of carbon management
As we evolve into what is rapidly becoming a carbon-conscious economy, it is inevitable that all businesses will be forced to become accountable for their carbon footprint, that is the impact of their operations on the environment.
The benefits to business, big or small, of taking early and proactive steps to reduce and manage their carbon emissions and energy production and consumption can be both financial and reputational.
From a financial perspective, reducing and offsetting the business’ environmental impact can help to improve business efficiencies, streamline operational processes and ultimately bring cost savings. For example, a business that reduces its energy use by replacing equipment or undertaking more energy efficient practices will also be reducing its electricity bill. Improving the business’ environmental credentials can also help to boost its reputation among clients, customer and employees alike, all of which can also help to drive bottom line growth.
How to become carbon-conscious
The first step to becoming carbon-conscious is to understand the actual impact of the business operation on the environment.
The easiest and most effective way to assess this is by conducting a carbon audit; an inventory of all the greenhouse gas emissions and energy consumption and production within the business.
This audit will locate exactly where reductions can be made and the cost implications and savings. Actions might include reducing air and taxi travel, switching to GreenPower or simply switching off the lights and computer at the end of each work day.
Carbon management is a burgeoning industry, so it is important to select a supplier which complies with recognised international standards and protocols, provides audits that are suitable for reporting under the NGER Act and has proven its own green credentials through programs such as the Department of Climate Change’s Greenhouse Friendly certification.
Carbon credits and offsetting
Once a business has assessed its entire carbon footprint and taken the necessary steps to reduce it as much as possible, there is also the option to offset past emissions through the purchase of certified carbon credits.
Carbon offsetting allows businesses to compensate for greenhouse gas emissions from past or future operations or practices. Once businesses have identified their carbon footprint, carbon credits can be used to offset emissions that cannot be viably reduced internally. Think of it as outsourcing emissions reduction.
Carbon credits are created by activities that either remove greenhouse gases from the atmosphere or prevent them from entering. One carbon credit is equivalent to one tonne of greenhouse gas emissions and its purchase, and subsequent retirement, will effectively offset that quantity.
These credits are available globally in two markets: ‘compliance’ and ‘voluntary’:
Compliance market: will be introduced here in Australia when the proposed Emissions Trading Scheme launches. Businesses that fall under the reporting requirements of the NGER Act will be required to buy and sell carbon credits through this market.
Voluntary market: Market for individuals and all other businesses wanting to participate in offsetting their carbon emissions.
By investing in carbon credits, businesses are funding the reduction of greenhouse gas emissions through the protection of forests, investment in alternative energy sources or energy saving practices.
-Dave Sag is founder and executive director of Carbon Planet (www.carbonplanet.com).
Reducing emissions in the workplace
Even before embarking on undertaking a professional carbon audit on your business, there are some simple things that can be done across the office to get you started:
1. Have an environmental policy in place so people know what is expected of them
2. Start to measure your emissions in detail and benchmark against your peers
3. Reduce paper use through electronic billing, invoice and payment systems; use recycled paper and request staff to print double sided or read documents on the screen
4. Encourage staff to reduce air-travel by consolidating business trips – consider videoconferencing or conduct meetings via webcam
5. Encourage staff to walk or travel by public transport to meetings rather than using taxis
6. Install more energy efficient equipment or machinery
7. Ask suppliers about their green credentials and make this a key procurement selection criteria
8. Shut down computers, or at very least set them to sleep when not in use, turn off monitors at the end of the day, and un-plug items such as mobile phone chargers that are not in use
9. Switch office lights off at night time or when meeting rooms are not in use and erect signs to remind people to turn lights off
10. Introduce recycling bins across the office and encourage staff to use them
11. Turn the thermostat up one degree, and where possible open windows. The right office plants can also do wonders for the air.