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How can small firms reduce their carbon footprint?
Tuesday, July 10, 2007
Expert Panel on Newbusiness.co.uk website
We asked Donald Maclean from Audits Unlimited, Dale Vince from Ecotricity and EBICo's Phil Levermore how small firms can reduce their carbon footprint.
Donald Maclean, managing director, Audits Unlimited
The carbon footprint of an organisation is the amount of energy it and its employees consume during a year. This is then converted into tones of CO2 emissions taking into account gas, electricity, water, LPG and transport consumption.
Reducing your carbon footprint makes not only environmental sense but economic sense as well. Everyone is all too aware of the massive rises in the costs of utilities in recent years. Any savings which can be achieved will directly affect the bottom line. This can be quite significant given that utilities, on average, account for between 5% and 10% of most company’s annual budgets.
However, before you can start saving the environment and money you need to have an accurate picture of your consumption. You may think that your bills are fairly accurate, but from our research we estimate that some 80% of businesses in the UK are paying too much for their utilities. However, many organisations find they do not have the time or skills in-house to keep track of utility bills and monitor the energy markets for the best times to purchase contracts.
Businesses are increasingly turning to independent utility consultants for advice on how to measure and monitor consumption of electricity, water, gas and telecoms. Also new devices called smart data loggers have been introduced to the market which organisations can use to measure consumption in real-time. These non-invasive sensors continuously collect data on usage and this is then sent to a central computer for collation and analysis. When analysed by utility experts, this data can identify any anomalies and highlight areas where savings can be achieved. For example, water and gas leaks frequently go undetected for some time, resulting in a large bill at the end of the quarter. Smart data loggers can send an SMS or an email as soon as a leak occurs. Analysis of the data can also flag up instances of lights being left on overnight, wrong thermostat settings and office or factory equipment using too much energy.
Once an accurate picture of consumption has been established, there are a number of ways in which your carbon footprint can be minimised. It is worth taking advantage of the free energy and water conservation surveys offered through organisations such as the Carbon Trust. There are even soft loans, enhanced capital allowances and grants available for purchasing energy-saving equipment.
It is also worth considering buying 'green energy' instead of 'brown energy' through suppliers or installing an on-site source of renewable energy such as wind, solar, heat pumps or biomass boilers. If your company uses a lot of water it is worthwhile considering a rainwater-harvesting system which collects rainwater in large tanks which is then filtered and can be used for flushing toilets, washing hands or in production processes (e.g. cooling machinery). There are also a host of energy-conservation measures which can be implemented such as boiler controls, draught-proofing, insulation, variable speed drives, voltage optimisation, power factor correction, energy efficient lighting and lighting controls.
In addition, it is possible to offset your carbon through buying trees and investing in renewables. It is worthwhile drawing up an energy policy for your company. This can recommend actions on such things as recycling and how employees travel (car sharing and company cycle schemes, for example).
There are many steps businesses of any size can take to reduce their carbon footprint and their utility bills. Much of this advice is freely available and in the case of independent utility consultants in most cases there is no net cost as fees are taken from the savings achieved.
For more information visit www.auditsunlimited.co.uk
Dale Vince, chief executive and founder, Ecotricity
It's not always easy for small businesses to imagine that they have an impact on climate change. But everything adds up: electricity, heating, cooling, machinery, office equipment, transportation, packaging, waste disposal, water use and so on. Regardless of the size of your operation, by using and wasting less you can save money and reduce your impact on climate change.
However, since burning of fossil fuels to make electricity is the UK's biggest single source of CO2, the biggest single step a business can take is to switch to a green electricity supplier. But it's not easy to choose the best one; the one with the biggest impact. Green tariffs are available from almost all suppliers in the UK – they offer a percentage of green content – typically from 100% to 10%.
However, most of these green tariffs are supplying 'old green energy' from sources built up to 50 years ago. Buying this green energy is said to reduce your carbon emissions but it only does this at the expense of the person who used to buy it before you did: net UK emissions of CO2 stay the same, yours go down, someone else’s go up. It's a con at the heart of many green tariffs. The UK currently only has 5% green energy available, which is nowhere near enough. The only way to fight climate change and to really reduce emissions is to build new sources of green energy, every year. That's what we do. We call it 'new green energy'.
The best way to judge how much each company is doing to build new green energy sources, and therefore how green their offering to you really is, is to look at how much they spend each year doing that. We collate and publish this information each year for all UK electricity suppliers. It's expressed as '£ per customer spent each year on building new green energy sources' and you can find it on the web at www.whichgreen.co.uk. The results are startling: half the big six don't spend anything at all and only one independent company has ever spent anything.
The data shows that we spend more each year per customer than all other suppliers in the UK put together, and then some. We're working with all sorts of companies, large and small, from Sainsbury's and Ford to local shops and farms. Over 1,000 SMEs have already joined us.
Phil Levermore, managing director, EBICo
Publication of the recent energy white paper underlined the government's commitment to CO2 reduction, proposing a domestic carbon reduction commitment (CRC) to be applied to larger (6,000 MWh per annum) domestic companies and organisations. However, setting and achieving climate change targets can be a 'win-win' opportunity for most organisations, even for those without a statutory carbon reduction target. The environment gains from the company's CO2 reduction but, with an appropriate approach, the company can win from reduced energy costs and enhanced public/customer image.
As with any capital project, the success of a carbon reduction programme (CRP) will depend, crucially, on the quality of the evaluation and planning that goes into its development, its alignment with the overall business plan and the financial discipline applied to the programme's implementation. EBICo Limited recommends the following stepwise approach in developing and implementing a CRP.
Step 1 in a CRP is to identify a project sponsor, leader and core team. The CRP team should agree, with the company senior management team, the programme aims and approach along with milestones, deliverables and timescales
Step 2 establishes the business case for the CRP. This will involve an assessment of the business drivers along with a baseline assessment of the company's current CO2 emissions and forecasts of business-as-usual emissions levels. Given this, an assessment of the potential for company value enhancement can be made at this stage and a business case assembled for the CRP
Step 3 involves the identification, assessment and appraisal of risks and opportunities to the CRP and the use of standard financial appraisal procedures to formulate specific cost-benefit analyses
Step 4 sees the development of the carbon reduction implementation plan (CRIP), which will involve consultation with the key stakeholders identified in Step 1 and presentation to, and sign-off from, the senior management team.
Step 5 launches the CRIP and involves the detailed management of the implementation plan, the updating of the emissions inventory, the monitoring and reporting of progress and the purchasing of any CO2 offsets that have been identified as necessary in the CRP
Click here for a link to this story online at newbusiness.co.uk
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