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Getting to net zero: a how-to guide for small businesses

Top tips tuesday

Small businesses are a huge part of the UK economy, making up over 99% of UK businesses and providing 60% of private sector jobs. No attempt to achieve a net zero economy can succeed without them on board.

Yet a recent study found that most small businesses are confused about the concept of net zero. They are getting conflicting messages about the environment, they aren’t clear what action they need to take, and some even see carbon reduction as a barrier to business growth. Here we explain what net zero is, why it’s a good idea for your business and how to get started.

What is net zero?

To prevent the worst effects of climate change, the world needs to reduce its greenhouse gas emissions to zero as soon as possible. There is huge potential for cutting our emissions, from lifestyle changes such as driving and flying less to technologies such as carbon capture and storage. But it would be impossible to reach a point where humans produce zero greenhouse gas emissions.

This is why we talk about “net zero” rather than absolute zero: it means that we remove enough emissions from the atmosphere to balance what we are producing. We can do this through supporting the earth’s natural tendency to absorb carbon through “carbon sinks” such as forests and wetlands. (Everybody has heard of planting a tree to help the planet, but restoring wetlands and peatlands is even more crucial.)

In this way, we can reach a point where the emissions created by human activity are completely balanced by the emissions our activity removes from the atmosphere: a state called net zero. The UK is one of six countries to give itself a legally binding deadline for reaching net zero, which will require both drastically reducing our emissions and investing in ways to remove the remaining emissions from the atmosphere.

Why set a net zero target?

The “big picture” reason is of course the climate emergency. The Intergovernmental Panel on Climate Change (IPCC) has warned that global warming of just 2°C above pre-industrial levels would have drastic consequences. As well as changing the face of the planet and wiping out many species, it would threaten the resources that human life depends on, such as energy, water and food. We are on track for this scenario unless there is a significant drop in the greenhouse gas emissions we generate. But there are also more short-term, business-specific reasons to get involved in the push towards net zero.

Public concern about the climate is growing, with 80% of UK residents reporting that they are either “concerned” or “very concerned” about climate change. Not surprisingly, they are increasingly seeking out more environmentally sustainable products and services. In other words, making a visible effort to cut your emissions is good for business. It also helps when you’re hiring; over a quarter of UK workers are so keen to work for a company that cares about the environment that they would actually take a pay cut to do so.

The international goal for climate change is to limit warming to well below 2°C above pre-industrial levels, ideally keeping it at 1.5°C or below. Nearly every country on earth has signed the 2015 Paris Agreement, an international treaty committing them to emissions cuts in line with this goal. This means reaching net zero by the middle of this century, which is why so many countries have made 2050 their deadline and many businesses have followed suit.

Unfortunately, whether you’re a government or a business, the danger of setting a target to be achieved in the distant future is that you are less likely to take the urgent action needed today. Aiming to reach net zero at the last possible moment is also an inherently risky move; many big projects end up going over deadline, but in this case the consequences could be runaway climate change.

Getting started: measuring your emissions

This doesn’t mean that you have to start by setting a target. Whether you’re a corporate giant or a small business, the first stage of your net zero journey should involve calculating your current emissions. Trying to achieve net zero without first doing this is like trying to map out a route without knowing where you’re starting from. To do this, you need to set the boundaries of your business. Where does it begin and end? Which operations and sites does your business directly control? If the structure of your business is very simple, this might seem like a silly question, but it is important to be clear on this.

Then you will need to measure all the emissions from your company’s operations. This means measuring the sources of emissions (e.g. energy consumed), then calculating the actual emissions, which will vary depending on which greenhouse gas is being generated.

For example, most businesses will be emitting a lot of carbon dioxide through their energy use. You would measure your gas and electricity used in kWh and your transport fuel consumption in litres. But a business in the agricultural sector might have the bulk of its emissions in the form of methane, so it would be important to measure that. The global warming potential of different gases varies, but is measured in “carbon dioxide equivalent”, or CO₂e.

For example, one tonne of methane has a carbon dioxide equivalent of 28 tonnes. The UK government regularly publishes conversion factors allowing you to calculate the CO₂e of different gases. As you gather the data which will make up the total emissions footprint of your business, it’s a good idea to get as much detail as possible. Installing sub-meters will let you measure the energy use in different parts of your sites and perhaps the energy used by specific processes. You can then use this information to identify which areas should be targeted as a priority.

To learn more about setting targets for net zero and successful implementation, read the full article on our Knowledge Exchange Hub. The Hub is free to join and is packed with expert advice and support for ambitious small business owners.

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