Some may think that net zero is the production of zero greenhouse gas emissions, however this is impossible, and therefore not true. Net zero means not adding any further emissions to the atmosphere, in order to balance out what we are producing. The UK government has stated that it intends to achieve net zero by 2050, along with 136 other countries also pledging this. During the COP26 summit, nations will be asked what steps they are taking to achieve this. But what does this mean for you and your business?
In order for the government to achieve this, all companies, no matter the size, will have to contribute to their part of achieving net zero. A BT survey recently carried out with Small Business Britain stated that “although 99% of small firms recognise the importance of sustainability, three quarters of them (77%) don’t know how to measure their carbon emissions and need support”. Below, we outline the 2 most important steps in achieving net zero for your company.
1 . Firstly, you can start by measuring your current emissions to see how much you are producing. In order to do this, you’ll need information outlining your business’s;
- Scope 1 – Fuel consumption. This is primarily fuels burnt on site or by a company vehicle.
- Scope 2 – Energy consumption. In the form of electricity, heat or steam.
- Scope 3- Any indirect emissions that occur because of your business activity. This includes, waste, emissions related to the purchasing of goods or services and employees travelling to and from work.
In order for this to be effective, it is recommended that you go into as much detail as possible on the emissions your business is producing. You can then use this information as a guideline to which areas need targeting as a priority. You can enter your carbon emission details on Carbon Trust’s website to get a basic overview of your organisational footprint.
2 . Once you have established a detailed report on the volume of carbon emissions your business is producing then you can start setting your targets. Consider setting your targets as early as possible rather than waiting until 2050. That way, if you set your target for 2035 and are a couple of years late in reaching it, then the consequences are not as significant. Remember to set yourself short-term goals in order to reach your long-term target. Key factors to bear in mind when setting yourself targets include;
- What emissions reductions will you need each year to reach your long-term target?
- You should consider having systems in place where you monitor the progress you are making and can bring you back on track if required.
- If having an early net zero target is not feasible, then you should put emphasis on the importance of reaching your short-term targets
Whilst taking these actions may seem overwhelming, there are many plus sides to doing so, including;
- Increased profits – reductions in your business’s indirect and direct costs perhaps through a reduced electricity bill or reduced fuel consumption that goes towards your goods/services will result in improved profits in the long run. Evaluating your business’s consumption metrics may also result in streamlined operations.
- Reputation – People are expecting companies to be more sustainable nowadays. With Generation-Z and millennials placing more pressure on businesses to take account of their environmental and social actions, you can use your transition to net zero as a marketing tool for your company.
- Attract future investment – Recently there has been a rise in the different types of green investment and funding available to companies. Demonstrating that you have measured your net zero emissions and are on the way to achieving your net zero goals, puts investors’ minds at ease that your company is meeting the environmental standards of the future.
However, transitioning to becoming green will require investment. For example, on the journey to becoming net zero, you may consider switching to electric vehicles – and goods like these are often more expensive than the alternatives, particularly if you are buying more than one. To alleviate some financial pressure, you could contemplate the idea of receiving funding and support in the form of grants from your local council, with them often having a range of sustainability grants. Other organisations also offer sustainability funding, for example SHAKE Climate Change, offer grants of up to £140,000 to entrepreneurs and start-ups combating climate change in agriculture and food production industries. It is worth doing some research into local and national grants that you could apply for in order to help you reach your net zero goals.
The bottom line is that net zero is happening and you and your business needs to be ready for it. The key is to have a plan in place, as you will not be able to achieve net zero overnight – it is a journey, and you can only have a plan if you start by measuring your current emissions now.
This article was written by the SCF team at Price Bailey LLP. We have invaluable experience of the early-stage funding market, global market intelligence skills and all-things sustainability. For help and advice on setting net zero targets for your business, you can contact a member of the SCF team using the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.
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