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We’ve committed to reaching net zero... now we have 2 problems
Hello again, and welcome back to the blog.
As of July, 1500 UK businesses have committed (through the SME climate hub) to becoming carbon neutral by 2050. Of these, 80% of firms expect to beat the government, and reach carbon neutrality by 2040 or earlier. There are more signing up all the time.
There are a few (arguably too many) ways of pledging your goals. Along with the SME Climate Hub, there is The Pledge to Net Zero, Race to Zero, and The Climate Pledge.
The numbers, of course, are a a good thing. SMEs make up conservatively 12% of UK emissions, and commitments show business leaders are willing to put brand and reputation on the line, so that they can operate consciously. Conscious of the world and conscious of the communities they affect.
Problem 1
So... we've made the pledge, where do we start?
The problem is lots of businesses don’t know. 1500 business have shown people generally want to do good things, and leave a positive legacy. But we know from speaking to small firms all over the world that reaching this goal can seem a mammoth change.
Do we change our products? Should we be planting more trees? Should I force everyone to cycle everywhere? Without a fully employed sustainability professional, it’s difficult to know where to start...
Ah, what the heck. At Do It Properly we’ve spent the last year helping SMEs, and have been interested in circularity for a hell of a lot longer than that, so, we thought we’d clear the air with step one... knowing how much you emit!!
Scope what?
There are 3 classifications of operational emissions, called Scope 1, 2 and 3.
Scope 1 - 10-15% of operational emissions. GHG emissions from direct operations, company owned vehicles, facilities emissions etc...
Scope 2 - 20-30% of operational emissions -
Purchased energy/ GHG for operations. For example, if you run a manufacturing facility and buy cooled water/ gas to power your site.
Scope 3 - 40-80% of operational emissions
Emissions created by value chain operations and manufacturing.
Scopes 1 and 2 are regulated and require reporting to environment agencies once a company reaches a certain size (typically 250 employees or more).
Scope 3 is complex and uncontrolled, and only certain elements need to be reported. This is understandable. At this point in the game, to expect SMEs to dictate terms to their entire supply chain would be waaaay too much.
Problem 2
If you care about reaching net-zero, Scope 3 emissions should form the central part of your strategy.
Focusing on Scope 3 emissions will have the biggest impact on your operational footprint. Dealing with the E, the S, and the G is a global issue, and it is through value chains that most companies build their products, deliver their services, and interact with the rest of the world. It’s only by looking at scope 3, that companies can get a focused, product level view on their emissions. It brings clarity and lets you put a metric on a complex set of relationships.
In addition, your scope 3 emissions are another company’s scope 1 and 2 emissions. If you and your partners have goals of becoming a B-Corp, or gaining status as a sustainable business, your scope 3 problem is a must solve. And let’s not forget, this is not a cost problem. Collaborating with and investing in your value chain should create value.
If you’re still with us, hopefully we’ve given you food for thought. If you’d like to think some more...
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George