Carbon Accounting: A Simple Guide for Small Businesses

By Rebecca Trudgett, Founder – Switchfoot Accounting
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Let’s be honest, the term “carbon accounting” can sound intimidating. It conjures up images of complex spreadsheets, technical jargon, and hefty consulting fees. You want to do the right thing, but do you really need all that headache?

In reality, carbon accounting doesn’t have to be an onerous task. In fact, carbon accounting can actually have surprising benefits for your business, as well as the wider world.

If you’re passionate about sustainability and reducing your business’ carbon footprint (in real-world impact, rather than values statements on a website), carbon accounting can provide the hard data you need to monitor emissions and identify priority areas for change. All this provides incredibly powerful data for achieving business success – in terms of both profit and purpose.

This short guide is designed to provide a practical, straightforward approach to carbon accounting, tailored specifically for small businesses like yours.

Why Should Your Small Business Care About Carbon Accounting?

You might be thinking, “I’m just a small business, my impact is minimal.” While it’s true that your individual footprint might be smaller than that of a multinational corporation, collectively, small businesses make up a significant portion of the economy and therefore, a significant portion of global emissions.

Moreover, there are compelling reasons beyond environmental responsibility for your business to embrace carbon accounting:

• Attract and Retain Customers: Consumers are increasingly eco-conscious. They actively seek out businesses that demonstrate a commitment to sustainability. By measuring and reducing your carbon footprint, you can attract and retain these valuable customers.
• Boost Your Brand Reputation: Being seen as a responsible and sustainable business enhances your brand image. In a competitive marketplace, this can be a significant differentiator, setting you apart from your competitors.
• Improve Competitiveness For Bids And Tenders: Sustainability credentials are increasingly prevalent within procurement processes. Effective carbon accounting provides a clear way to address questions and thereby increase competitiveness.
• Reduce Costs and Improve Efficiency: The process of carbon accounting often reveals areas where you can improve efficiency and reduce waste. This can lead to significant cost savings in the long run, from lower energy bills to optimised supply chains.
• Gain a Competitive Advantage: As sustainability becomes more important to consumers and investors, businesses that proactively address their carbon footprint will have a competitive edge. This can open doors to new markets and partnerships.
• Prepare for Future Regulations: While regulations around carbon reporting are still evolving, it’s likely that they will become more stringent in the future. By getting ahead of the curve now, you can avoid being caught off guard and ensure a smooth transition.
• Access New Funding Opportunities: Increasingly, investors are looking for businesses with strong ESG (Environmental, Social, and Governance) performance. Demonstrating your commitment to carbon reduction can make your business more attractive to potential investors.
• Improve Credentials For Applications: Whether you’re seeking a B Corp certification or some other form of sustainability accreditation, carbon accounting can provide empirical evidence to make your application stand out.

How to Implement Carbon Accounting in Your Small Business:

Now that you understand the “why,” let’s dive into the “how.”

Here’s a simplified, step-by-step approach:

1. Identify Your Emission Sources: The first step is to pinpoint where your business generates greenhouse gas emissions. This might include:
   • Energy consumption (electricity, gas, heating)
   • Transportation (business travel, deliveries)
   • Waste generation
   • Supply chain emissions (products and materials you purchase)
   • Employee commuting
2. Measure Your Emissions: Once you’ve identified your emission sources, you need to quantify them. This can be done using various methods, from simple estimations to more sophisticated tools. There are also online calculators and resources available specifically for small businesses.

Don’t get bogged down in achieving perfect accuracy at this stage; focus on getting a reasonable estimate and refining it over time. It’s helpful to understand the different scopes of emissions:

1. • Scope 1: Direct emissions from sources you own or control (e.g., company vehicles).
   • Scope 2: Indirect emissions from purchased energy (e.g., electricity).
   • Scope 3: All other indirect emissions that occur in your value chain (e.g., supply chain, transportation). While Scope 3 can be complex, focusing on key categories is a good starting point.
2. Set Targets and Reduce Emissions: Once you have a baseline measurement, set realistic and achievable targets for reducing your emissions. This could involve:
   • Improving energy efficiency (e.g., switching to LED lighting, upgrading equipment)
   • Switching to renewable energy sources (e.g., solar panels, green energy tariffs)
   • Reducing waste and recycling
   • Optimising your supply chain
   • Encouraging sustainable transportation options for employees
3. Track and Report Progress: Regularly track your progress towards your targets and communicate your achievements to stakeholders. This could be done through a simple sustainability report or by highlighting your efforts on your website and social media.

Start Small, Think Big:

The key to successful carbon accounting for small businesses is to start small and focus on continuous improvement. Don’t try to do everything at once. Instead, identify a few key areas where you can make a difference and build from there. Remember, every small step counts.