As we start to see the devastating effects of climate change ramp up around the world, more and more businesses are getting behind triple bottom line accounting. Carbon accounting must play a key role in this if we’re going to achieve the UK’s net zero target; after all, to make meaningful change you must first know what it is you’re trying to change.
At present, only some of the bigger SMEs are required to report on their carbon output. This means a significant portion of UK businesses—SMEs make up 99% of all businesses—don’t have to if they don’t want to. This article is a call to action, asking businesses that don’t have to, to want to.
I know last year was tough (for some businesses that may even feel like a massive understatement). But we’re entering a new year, wounds licked, egos checked and eyes wide open. As David Attenborough’s witness statement made clear, we don’t have time to dawdle on our response to the climate emergency.
This article is called ‘The benefits of carbon accounting for SMEs’; the single biggest benefit is that there’ll still be a place for your business to thrive if you get on board now. Noah’s Ark wasn’t built in a day, so let’s get moving!
What is carbon accounting?
In case I’ve jumped the gun and you’re reading this thinking ‘What the heck is triple bottom line and carbon accounting’, I’m including a summary of my take on the terms:
- Triple bottom line accounting enables businesses to measure their performance based on more than just how much money they’re making; it looks at measures that prioritise people and planet alongside profit.
- Carbon accounting, in a business context, requires businesses to count and report on their carbon emissions so that they can work towards reducing their footprint.
What are the benefits of carbon accounting for SMEs?
Delightfully, there are more benefits for businesses looking to count their carbon than just the aforementioned ‘a planet humans can exist on’ point. These include:
- Potential economic savings: carbon accounting requires SMEs to identify business activities that use a lot of energy. If this hasn’t been looked into before, you might be surprised by how much money you’re pouring down the drain on unnecessary energy usage. The same goes for business travel; when you look at your travel policies through green-tinted glasses, you might spot a few areas you’re spending money unnecessarily!
- Attracting and retaining talent: it’s one you’ve probably heard over and over again (possibly solely from me) but talent in 2021 wants their worklife to have some kind of purpose. Demonstrating that you’re taking the climate emergency seriously by committing to carbon accounting and its offshoots is a great way to attract and retain this talent.
- Attracting and retaining customers: what I said above stands for customers too. People are waking up to the fact that their pounds have power, and are using their purchases to vote for a greener world. Pawprint is currently in the process of applying to become BCorp certified, and one of the requirements is that we screen our suppliers through an ESG lens. As more businesses seek this certification, this will ripple out to all corners of the business world so get ahead of the shift!
- Qualifying for investment: on the topic of green finance, the number of investors/funds that will only invest in companies with eco credentials is growing. If you’re a small company that relies on investment, don’t limit your pool by ignoring this trend.
- Engaging employees: I wrote in a previous article about the cost of unhappy employees; £340 billion every year, according to Perkbox. On the other hand, engaged employees boost productivity by 18% and profitability by 12%. With the generation that wants to protect the planet rapidly spilling into the workforce, an activity like carbon accounting can be an excellent employee engagement tool. Carbon accounting is your compass, your employees are how you’ll get there!
Top tips for carbon accounting in an SME
Communicate your targets and involve employees in achieving them:
In Carbon Intelligence’s 2018 report, a thousand junior employees were surveyed; 74% had no idea what their organisation’s carbon reduction targets were and 57% said their employers weren’t doing enough to involve them in cutting their carbon footprint at work.
So the first point of call, once you’ve set your targets, is to make sure employees know about them. A few paragraphs in a long email probably isn’t enough; dedicate time and energy to communicating your vision in a way that can’t be missed or ignored. I guarantee that once employees hear what the plans are, they’ll want to get involved.
The second point of call is to have a strategy for how employees can help. I won’t interrupt the flow of this article with a massive plug (just a small one), but Pawprint can support you through this. Our tool is designed to help businesses engage employees on sustainability initiatives. Keep reading to learn more.
Empower employees to track their own progress
A 2020 report by McKinsey found that engagement is boosted when employees have power over their own journeys.
In fact, they actually call out ‘behavioural science and digital technology’ as a means of achieving this, which made me smile; Pawprint combines behavioural science, carbon data and digital technology to guide people and businesses along their eco journey. We’re that solution!
With Pawprint your employees can:
- Measure their carbon footprint, at home and at work
- Access jargon-free scientific information about carbon footprints and eco living, and take challenges that will reduce their impact
- Track their carbon reduction
- Feedback eco ideas and sentiment on the business’ carbon reduction goals
Leverage passionate employees to convince leadership to act
Carbon accounting is a great first step for companies that want to support the environmental movement. But once you know where your inefficiencies lie, the next step is getting leadership to buy into the necessary changes. Here again, your employees are invaluable; those that are passionate and willing to get involved can be leveraged to convince leaders that it’s time to act.
On the odd occasion that I find myself getting down about climate change (I keep myself determinedly optimistic as much as possible) I try to remind myself that behind every business, business decision, policy, investment (etc. etc. etc.) there is a person or people. When I remember that, I can’t not be filled with hope.
For all its awfulness, the pandemic has propelled the climate emergency to the forefront of people’s thoughts and demonstrated why we must do something about it. Many of these ‘people’ own, or are decision-makers in businesses and I am hopeful they—we—now see the responsibility that comes with. As I said, Noah’s Ark took more than a day to build. Let’s get started.