What Is a Carbon Neutral Business? A Basic Introduction
Carbon neutrality means reducing your organisation’s net carbon footprint to zero by lowering greenhouse gas productions as much as possible and then offsetting the remainder.
The aim for your business is seeking to create an ecological balance between processes that generate greenhouse gases and those which remove them from the atmosphere.
The aim to become a carbon neutral business is not an easy one and it is a journey that is likely to benefit your business in many tangible ways.
What is Carbon Neutrality and Why Does it Matter?
Greenhouse Gases, and The Hole in the Ozone Layer are at the forefront of public consciousness, however government representatives across the world have been discussing them for more than two decades without coming to a clear consensus on how to tackle either.
Rather than waiting for definitive legislation from government officials, enlightened business leaders across the globe are taking matters into their own hands and committing their company’s efforts to address this potentially catastrophic problem.
Carbon neutrality proponents have recognised the need to phase out the use of harmful energy sources as much as possible, replacing them with more sustainable, renewable power generation technologies such as solar, wind, tide, and biomass.
The shift towards renewable energy sources is accelerating at a rapidly increasing rate as the generating costs plummet. Thus, to become a carbon neutral business is to be an intrinsic part of this industrial evolution.
The Climate Change Act and its Impact
With the introduction of the Climate Change Act in 2019, the UK government made a legislative commitment to encouraging businesses to become carbon neutral.
The UK became the first country to introduce legally binding emission reduction targets, and it has helped us reduce our emissions by over 40% in just three decades, while simultaneously the economy has grown by 67%.
The UK has proudly joined an international coalition of countries and cities, and is looking forward to working towards a healthier, safer future together.
Currently, there are 32 cities worldwide who have pledged to be carbon neutral by 2050. This global push is further proof of the impact of the concept of carbon neutrality.
This policy drive in the UK has set in stone the commitment to a greener and indeed leaner economy.
To become a carbon neutral business is a central spur of the Act and one that the current government is broadly supportive of. It is a conditional type of legislation and one that compels businesses to action. No longer can companies be complacent in the face of such changes.
Abiding by the Act could also be the catalyst that drives your business to achieve carbon neutrality. Sometimes compulsion is great driver for change. In this case, the UK government is at the forefront.
Some High-Level Examples of Carbon Neutral Businesses
In May 2019, the whole of the United Kingdom operated for just over a week without using any electricity generated from burning coal.
To quote Fintan Slye, director of the National Grid: “We believe that, by 2025, we will be able to fully operate Great Britain’s electricity system with zero carbon.” This is the essence of carbon neutrality and one which may encourage your company to become a carbon neutral business.
A surprising aspect of carbon neutrality is the number of top businesses that either have achieved carbon neutrality or are on their way to that peak.
Google, as one example, have been carbon neutral since 2007 and pledge to be carbon free by 2030.
Others such as Avis are well on their way to becoming a carbon neutral business.
It is gratifying to see such high-level corporate businesses working in this positive and progressive fashion and it provides prospective firms who aspire to this model great inspiration to follow suit.
There is much to consider and perhaps much to change. It need not be an arduous task, but rather one that takes many small, incremental steps.
Why are so many companies investing time, money, and significant effort to achieve this environmental status symbol?
In the first instance, it has become more prominent with governmental policies and regulations, as we have seen with the Climate Change Act (2019), as well as 32 cities worldwide taking on carbon neutrality goals as we approach 2050.
Like a snowball rolling down a hill, more and more organisations are joining the move towards carbon neutrality for lots of tangible reasons. The five key areas are: Environmental protection; Cost reduction; Good PR (and fulfilling CSR); Customer expectations; The continuing dwindling physical resources and raw materials required to produce goods (e.g. IT) and the massive use of fossil fuels associated with said production.
Whatever the reason that piques a business’ interest and prompts action towards becoming carbon neutral, the benefits can be far more widespread, adding value in more than one area.
If we take IT, particularly the manufacture of laptops, as a cogent example, the key areas mentioned are straightforward to outline.
The benefits of becoming carbon neutral
Before we consider the steps that an organisation needs to take to become carbon neutral, let us take a moment to look at the benefits of such a commitment in greater detail.
The most apparent benefits of committing to the carbon neutrality path are, of course, the environmental ones but in the competitive business world, taking the moral high ground and committing to saving the planet can be a hard sell when profit margins are being squeezed, and global competition is getting tougher.
Companies like Google and the others mentioned earlier understand that going carbon neutral makes sound business sense aside from the key environmental factors.
The attraction to become a carbon neutral business is also commercial and the two can work in synergy.
The economic discussion of sustainable energy
Rising energy costs are a huge drain on businesses, particularly in the IT sector.
The costs are a massive component of a company’s operating budget and one that cannot be underestimated.
Many businesses are currently reliant on non-renewable, fossil fuel energy sources which have been steadily increasing due to the twin factors of growing demand and dwindling supply.
In contrast, renewable energy sources are becoming increasingly more cost-effective, thanks to reduced costs and ever shortening payback periods.
In addition to utilising renewable energy sources, the rapid evolution of affordable, energy-efficient, electric vehicles and the increasing availability of EV charging stations is making it easier to move away from increasingly expensive, polluting fossil fuels as we displayed earlier.
Supply and demand issues are pushing up the costs of raw materials while millions of tonnes of valuable raw materials are still being disposed of in landfill sites across the world.
Reclamation, recycling, reuse, and remanufacturing offers a practical, cost-effective solution by prolonging the lifespan of products and components.
Growing consumer needs and expectations
Recent market research shows that business and domestic consumers are giving more weight to the green credentials of their suppliers when making a buying decision.
The research clearly indicates, more than ever, that consumers prefer to buy from suppliers with a demonstrable environmental conscience.
As a result, the inclusion of environmental considerations in tender processes is becoming the norm rather than the exception.
IT is no different and there are a few companies at the forefront of these seismic changes. In the UK, Circular Computing™ is one powerful example.
We completely changed the business paradigm with a laptop that was completely remanufactured without causing any damage to the environment and provides carbon neutral solutions to laptop provision.
Carbon neutrality is also an employee issue. Human capital is high on the agenda of most successful businesses.
Attracting and retaining high performing people, at all levels of the organisation, is critical to maintaining your competitive advantage.
As unemployment rates fall, it becomes harder to hold on to excellent staff, but research suggests that there is more to it than a desire for higher wages.
The best staff care about the environment and want to work for, and take pride in, environmentally responsible companies.
Becoming carbon neutral is an excellent way to tap into these motivating factors while reducing the cost of replacing valuablestaff.
With a carbon neutral business, there is an ethical core that attracts staff. This is the intangible benefit of such a move and one that brings with it the advantages outlined.
Also, the workforce of the future will be one with a carbon neutral focus, as modern education and training is geared to such a goal.
Good PR is priceless
Any business can become carbon neutral and, in so doing, make a valuable contribution to protecting our planet and its fragile ecosystems.
Early adopters of such initiatives are seeing the commercial and PR benefits of such efforts.
Achieving and maintaining carbon neutral status is something that businesses can actively promote. This is another area that is often overlooked on the road to becoming a carbon neutral business.
Keeping your suppliers informed of your initiatives is an essential part of your carbon neutral journey.
Your commitment and your actions will encourage them to do more themselves. Look for joint publicity opportunities where you can both benefit from closer collaboration towards carbon neutrality.
It is all too easy to assume that everyone in your business is familiar with the impact and outcomes of your sustainability activities. Do not wait for the carbon neutral certification before telling them about the progress you (and they) have made. It will also promote goodwill throughout your business.
How offsetting contributes to Carbon Neutrality
Offsetting carbon emissions is a key area and one which can be discussed in succinct form. It is perhaps less daunting than other aspects, though is not without controversy.
Offsetting involves investing in initiatives that are created to produce a reduction in carbon dioxide in the atmosphere equivalent to the amount of CO2 your business or product produces.
Historically, offsetting efforts have ranged from long term projects, including tree planting schemes to shorter-term initiatives such as methane gas capture from landfill sites or the provision of energy efficient cooking apparatus in developing countries.
Offsetting has received a negative press in some quarters as it has sometimes been seen as a ‘copout’ and convenient way to avoid any meaningful changes in CO2 production, hence the controversy.
Evidence suggests that it is much more commonly used to offset any remaining carbon footprint after reduction measures have been exhausted.
Further carbon reduction ideas
As its name suggests, carbon reduction focuses on making long term changes to reduce your organisation’s carbon footprint.
Here are various examples of the types of actions that businesses are already using to reduce their CO2 emissions:
Switching to renewable energy sources such as solar panels, wind turbines and hydroelectric schemes.
Switching all or part of their vehicle fleet to electric vehicles.
Updating old incandescent lighting systems to more energy efficient LED lighting.
Introduction of automated power shutdown systems.
Retrofitting improved insulation and fitting more energy efficient heating systems.
Reducing the quantity of waste material that is sent to landfill through better recycling or turning waste into energy.
Introducing teleconferencing to reduce road and airline travel.
Finally, sustainable procurement activities (e.g., buying remanufactured IT equipment such as laptops).
Obligations of the carbon neutral journey
The world is rapidly approaching a tipping point where the principle of carbon neutrality and its various accreditations will become as ubiquitous as other well-known certifications including ISO9001 (quality), ISO 14000 (environmental management), ISO 5001 (energy management) and Investors in People (staff training & development).
Approaching carbon neutrality may be obligatory in this sense, but as aforementioned, incremental steps, taken as part of an overall road map make perfect sense.
Businesses should strive to make ongoing reductions in their carbon footprint, reducing their dependence on offsetting to achieve carbon neutral status. Finally, becoming (and remaining) carbon neutral has sound commercial as well as environmental benefits, and is achievable for most organisations, be they public or commercial.
Knowing your carbon neutral targets
The central analytical process towards becoming a carbon neutral company is to assess your current carbon footprint.
Although it sounds daunting, it may not be as complicated or as time- consuming as you might think. There are numerous free online calculators available which simplify the process, especially for small and medium-sized businesses.
Carbon foot printing software is available for larger, more complex businesses.
We’ve previously discussed offsetting, now the aim is to assess your company’s annual target.
In their fifth report, the Intergovernmental Panel on Climate Change (IPCC) set a target of keeping global temperature change to below 2%. It makes sense therefore, that where applicable, businesses play their part in achieving this ambitious, but achievable, goal by setting a science-based target.
While complete carbon neutrality is the overall target, specific action-based goals such as switching to 100% renewable energy are more realistic for smaller or SME businesses.
Carbon neutrality certification
We have looked at certification, now we can look at who decides such.
Carbon neutrality is an internationally recognised certification issued by an accredited, independent certification body which assesses your business against the criteria of the Carbon Footprint Standard.
Certification can be achieved for organisation’s products and services, supply chains or events. It is a worthwhile gain as it gives your business the official credentials to prove their worth and the spin-offs from it.
The circular economy: an essential approach
The circular economy provides an excellent model for not just sustainability but achieving carbon neutrality.
To become a carbon neutral business, one might think of also taking part in the circular economy. This is an alternative, more progressive approach that builds economic, natural and social capital through restoration and regeneration.
A circular economy focuses on maintaining the value of products, materials and resources through a combination of re-use, recycling and remanufacturing. As a result, the consumption of raw materials, and production of waste are significantly reduced or even eliminated.
The circular VS the linear economy
While the linear economy concentrates on the extraction, consumption and disposal of materials, the circular economy takes a much longer-term view.
It starts with the aim of using as few resources as possible during manufacture. Then it considers how to keep those resources in circulation for as long as possible while extracting the maximum value from them throughout their life cycle.
Ease of dismantling, repairability and remanufacture are built in at the design stage.
When the product finally comes to the end of its “normal” lifespan, a circular economy approach seeks to recover, repurpose, and regenerate those products thereby significantly extending their service life.
The circular economy positive impacts
The world has the best chance of avoiding dangerous climate change by moving to a circular economy, thereby enabling countries to meet the goals of the Paris Agreement on Climate Action. This is the key finding of The Circularity Gap Report 2019, released by the Circle Economy, a group supported by UN Environment and the Global Environment Facility.
The report highlights the scope to reduce greenhouse gas emissions by applying circular principles – notably re-use, remanufacturing and recycling – to key sectors.
It comments that most governments barely consider circular economy measures in policies aimed at meeting the Paris Agreement targets.
The report also finds that the global economy is only 9% circular – just 9% of the 92.8 billion tonnes of minerals, fossil fuels, metals and biomass that enter the economy are re-used annually. Climate change and material use are closely linked.
Circle Economy calculates that 62% of global greenhouse gas emissions (excluding those from land use and forestry) are released during the extraction, processing and manufacturing of goods to serve society’s needs; only 38% are emitted in the delivery and use of products and services. Yet global use of materials is accelerating, it has more than tripled since 1970 and could double again by 2050 without action, according to the UN International Resource Panel.
Carbon neutral businesses in the UK
As aforementioned, there are some great examples of UK businesses that are carbon neutral.
Circular Computing ™ is at the vanguard.
Carbon Neutral Britain™ is another, a business which provides carbon offsetting.
Circular Computing™ plants five trees for every laptop they produce, is one tangible strategy. Sky too has achieved carbon neutral status, as have Logitech and Quorn Foods.
This is good news as you approach and try to become a carbon neutral business. You are far from alone.
The high-level companies who have achieved such a commendable goal may lead the way, but they are goals that smaller to medium businesses can aspire to without huge pain points or sacrifices.
To quote the venerable philosopher Lao Tzu: ‘the journey of one thousand miles starts with a single step’.
Written by Sean Urquhart – Lead Copywriter at Circular Computing™