Net Zero – Can’t See the Wood for the Trees.

How are you feeling Clark?

What’s the problem?

Good job I came along, sounds like this is a job for an accountant, an auditor to be precise.

How dare you, some of my best friends are auditors. Well some of my best acquaintances. And anyway who said saving the world was supposed to be fun.

Somewhere between 25kg and 250kg per year, no one is absolutely sure and it depends on a lot of things. Unfortunately there aren’t any common standards for auditing your exact carbon footprint either, but the important thing is to start somewhere, work with the right people, pick a reasonable methodology and stick to it.

Don’t worry I won’t desert you. On one hand B Corps are all the rage these days, they look at your business holistically, help you be transparent and send your customers a clear message about your intentions which is great but, for most smaller and medium sized businesses, it all boils down to the same questions…

Exactly, So first off pick one of the internationally recognised standards for greenhouse gas accounting and reporting. The most widely used is the Greenhouse Gas protocol, but you should pick the one that is most useful and relevant to your business and region.

Well they define emissions under three headings. All direct emissions from activities under your control, indirect emissions from the electricity you purchase and use and all other indirect emissions from activities, from sources you don’t own or control.

Snapchat? Ah, we’ve known each other so long. I forgot to tell you we all moved on to TIkTok a couple of years ago.

I know, sorry. Fear not, the basics of counting your carbon footprint are going to stay the same, and the process should get much easier the more people do it and publish their data.

Well it’ll make it much easier to calculate the carbon footprint of your inward and outward supply chain for a start. But let’s start with the basics of what you measure.

it all starts with an audit of what energy you are using, it’s most useful if you can look at a 12 month period. Your accountant might even be able to help. So look at your electricity and natural gas use – the kilowatt hours will be on your bill, and your total water supplied and treated should be on your water bill as well.

You’ll also need to add in any fuel used in company owned vehicles (invoices and receipts are the most accurate way to do this). You’ll also want to keep track of receipts for details of any other travel and use a distance calculator for any road, rail or flights.

Yes, yes we do, but we are still on the easy bit, next you’ll need to calculate your waste to landfill and recycling, many business will be able to get this direct from their provider but there will likely be some estimates involved and if your business is based in a serviced or shared office space they may be harder to make accurately. It may even be worth doing a waste audit, as it could help to bring your tax bill down by helping you reduce the waste you send to landfill

Don’t get carried away, things can get a bit trickier from here on in when we try and calculate indirect emissions…

I’ll get to them soon, promise, first let’s talk about indirect emissions.

Pay attention to Clark, they are carbon emissions from all activities that you don’t own or control.

Emissions from your team commuting for one, though you should be able to make a reasonably accurate estimate, and any steps you can take to encourage people to walk, cycle or get public transport to work will all help.

And finally, the really hard to calculate stuff, any emissions from the production and transport of stuff you buy, as well goods or services you supply. Depending on your supply and distribution chain these could be more challenging, but you can make a reasonable estimate

I knew that you’d understand Clark, eventually.

Well, you’re going to need to convert the data you’ve collected into greenhouse gas emissions using something called an “emission factor”

No, it’s much more exciting than a TV show.

Yes, it comes in a spreadsheet and helps you do sums.

If we are going to save the world we need to do a lot of counting. You can find the emission factors released by the Government here, the update them annually. The one you’ll most likely need is this one

Oh, sorry, that was for something else, it’s this link

Well I’m sure an accountant could help, and also there are online calculators like this one and this one that make things easier, such as the McKay Carbon Calculator which you can find on the Government website or this one from the Carbon Trust which they’ve designed specifically for SMEs.

You mean “What are the three ways that the Government would like businesses to commit to climate action?”

There are levy’s like the ones on Aggregates and the Climate Change Levy to encourage the use of more recycled materials in construction and incentivise energy efficiency in all workplaces. There’s also the Landfill Tax which…

Very good Clark, you’re not too shy to say that you’ve been paying attention.

There are a few, yes, for instance you can claim ‘enhanced capital allowances’ (a type of first year allowances, which is in addition to the Annual Investment Allowance) for things like new zero emissions delivery vehicles, some cars with low or no emissions as well as energy and water saving equipment providing they are on the government lists.

There are some grants available from Innovate UK – which offers grants targeted at companies developing technology for sustainable purposes – and The Sustainable Innovation Fund – to help stimulate clean growth recovery in light of COVID-19 across all the sectors of the UK economy. There is even one to create woodland and plant trees.

I think we’d all like to see the Government do more, if you are lucky enough to be based in Scotland then you can access interest-free green loans up to £100k to help pay for energy and carbon-saving upgrades and potentially a cashback grant of up to £20k.

Sadly for you, no, the business has to be based there, if you were you would also be able to access the Low Carbon Transport Business Loan which offers up to £120,000 interest-free to help reduce the carbon impact and fuel costs of their transport arrangements through the purchase of new, more efficient vehicles.

Don’t give up Clark, the important thing is to commit to making a change and then make a start by calculating your emissions. You can sign up to make that commitment and get some government support and tools to help you here. One thing’s for certain though.

You’re going to need an accountant.

Not on our own. We’ll need auditors too.