Cutting your carbon emissions
What climate change is, its effects on your business and the business benefits of helping to tackle it
Climate change is the term used to explain the changing weather patterns the earth is experiencing. Because of climate change, the UK is seeing hotter summers, milder winters, higher sea levels and increased flooding.
It is widely accepted that human activity is contributing to climate change through the production of greenhouse gases. These gases - particularly CO2 - are being released into the earth's atmosphere, where they form a layer, which prevents heat from escaping, causing a warming effect.
Businesses can help to tackle climate change by reducing the levels of greenhouse gases they produce. Some businesses, particularly those that are energy-intensive, will have requirements to reduce their greenhouse gas emissions as a result of the UK's commitment to the Kyoto Protocol.
However, all businesses can make changes that will make a difference, such as using less energy or swapping company cars for greener models. It may bring you business benefits too, including cost savings and tax breaks.
How to cut carbon emissions from energy use
Reducing energy use is one of the simplest ways to reduce the carbon footprint of your business and help reduce the effects of climate change.
All businesses can reduce their energy use, benefitting the environment and their bottom line. Saving energy can also have other benefits, including boosting employees' morale and an improved business reputation.
There are many changes your business can make to cut carbon emissions from energy use. Find ways to reduce energy use in your business on the Carbon Trust website.
The changes you make can be as small as turning electrical equipment off overnight or changing your light bulbs to energy-efficient ones. Traditional light bulbs can waste up to 95 per cent of the energy they use as heat. Energy-efficient bulbs are up to 80 per cent more efficient than traditional bulbs and each bulb could save you up to £40 over its lifetime. As part of the effort to reduce emissions, inefficient light bulbs are being phased out. Read about the ongoing phase out of inefficient light bulbs on the Energy Saving Trust website.
You may want to consider larger measures where the financial benefits are more long term, such as investing in new energy-saving plant or machinery.
You may also be eligible for tax breaks, if you invest in certain energy-saving equipment. See the page in this guide on tax breaks to encourage energy efficiency.
Buildings can be a major contributor to carbon emissions, often through inefficient energy use. See the page in this guide on how to cut carbon emissions from business buildings.
For information on reducing energy use in your business, read our guide on how to save money by using energy more efficiently.
How to cut carbon emissions from business travel
Transport is a significant - and growing - cause of carbon emissions. Some businesses, such as those in the transport sector, will be able to cut carbon emissions to a larger extent than others, but there are actions that all businesses can take.
The first step in cutting your CO2 emissions is to evaluate the impact of your business travel on the environment. This includes:
- travel to and from meetings and other out-of-office appointments - whether this is by car, plane or train
- journeys that employees make to and from work
- the way your business makes and receives deliveries
The Carbon Trust can help you work out the carbon footprint of your business, including the impact of business travel, and give free advice on cutting carbon emissions. Find a carbon footprint calculator on the Carbon Trust website.
Once you have examined your business travel, the next step is to look at ways to reduce or minimise the impact of these journeys. You might consider encouraging your employees to:
- book several appointments in the same area on the same day
- work from home
- use methods of transport with less environmental impact, such as walking, cycling and trains
- use low-emission vehicles and alternatively powered vehicles
- drive vehicles more efficiently
If you transport goods as part of your business, you should ensure that you do this in the most efficient way.
How to cut carbon emissions from business buildings
Buildings are responsible for around 40 per cent of the UK's carbon emissions, with business properties accounting for around half of that.
There are plenty of simple, low-cost measures you can take to cut energy use within your buildings and lower CO2 emissions. These include installing movement-sensitive light sensors in toilets and other little-used areas and turning down the thermostat by a couple of degrees. See our guide on how to save money by using energy more efficiently.
There may be additional things you can do - such as installing double-glazing and improving roof insulation - to help make buildings more airtight. Find guidelines on the energy performance of buildings.
Energy efficient building regulations
If you are having new premises built, or you are making structural changes to your existing premises, you must make sure they meet the requirements of Part F of the Building Regulations. Read about the conservation of fuel and power under building regulations.
All commercial buildings require an energy performance certificate (EPC) when they are bought, let or sold. An EPC indicates how energy efficient a building and its services are. An EPC also contains recommendations for cost-effective changes that can be made to improve the building's energy efficiency and cut carbon emissions. See our guide on energy performance of buildings duties: an overview.
You must make sure you comply with the requirements of the European Energy Performance of Buildings Directive. These include getting your air-conditioning systems regularly inspected and obtaining an energy performance certificate when you construct, sell or rent buildings.
You may be eligible for a number of tax breaks if you introduce energy efficiency measures. See the page in this guide on tax breaks to encourage energy efficiency.
How to source and design low-carbon products
Designing your products and services so that they produce less carbon is not only good for the environment, it will also make them more appealing to more environmentally-aware customers.
It can also help your business to win contracts, such as government tenders, where the use of environmentally-aware suppliers is encouraged.
Low carbon goods and the product life-cycle
To make low carbon goods, you need to consider environmental impact at every stage of your product's life-cycle.
The stages to consider include:
- Raw materials - these must be fit for their purpose, but try sourcing suitable alternatives that are more carbon efficient.
- Manufacture - can you make your product more simply, cutting the amount and number of materials? Could your manufacturing be more efficient, reducing waste and energy consumption? Are there renewable power sources you can use or can you generate your own energy?
- Retail - can you cut the distance your products are transported for sale - reducing fuel use and freight costs? Can you minimise packaging to reduce transport costs and waste?
- Use - can you design your product so it lasts longer or can be more economically repaired? Can you provide better instructions for users so they get a longer life out of the product?
- End of life - when the end user has finished with the product, is it designed to be reused, eg in a secondary market? If that's not possible, can you design the product so it can be recycled?
You can calculate the carbon footprint of your products - and identify areas for improvement - using the environmental standard PAS 2050. There can be a real commercial advantage to adopting the standard, as it can help your customers to make more informed purchasing decisions.
Sourcing low carbon supplies and materials
Using suppliers of low-carbon products can have more benefits than just helping your business become more environmentally responsible. It can also show stakeholders - such as investors, employees and customers - that you are taking your environmental responsibilities seriously.
Even a simple step of buying products from local suppliers can cut down on the distance they are transported. Your local enterprise agency or trade association may also be able to help you find local suppliers of low carbon products.
Tax breaks to encourage energy efficiency
Tax breaks are on offer as an incentive to encourage you to adopt certain environmentally-responsible practices. For example:
- Using sources of energy that have less environmental impact can make your business eligible for a reduction in the climate change levy.
- You can benefit from investing in energy saving plant and machinery through tax breaks called enhanced capital allowances (ECAs).
- You can also use ECAs for investing in company cars that have low CO2 emissions.
- Encouraging staff and business travel by sustainable methods can attract certain tax benefits - see workplace travel planning.
If your business is in an energy-intensive sector, you may need to have an emissions trading permit.
Purchasing carbon offsets
Your business should measure and, where possible, avoid and reduce emissions. This can also help your business save energy and money in the longer term. However, there are emissions that cannot be avoided, and you may wish to balance the impact of such emissions through the purchase of carbon offsets.
Offsetting involves paying someone, somewhere else, to save emissions equivalent to those you have produced. These emissions savings - or 'carbon credits' - come from a variety of projects in a number of different countries. However, you should remember that offsetting alone will not necessarily make your company carbon neutral.
How can you check the quality of offset products?
To help you choose good quality offsets make sure you use an offset provider that can:
- calculate your emissions accurately
- deliver credits within a year of your buying them
- declare clearly how much the credits cost per tonne
- provide you with information about the role of offsetting in tackling climate change and advice on how to reduce your carbon footprint
If you intend to purchase carbon offsets, you should take the time to check that you are confident that the offsets represent real, independently verified emission reductions or offer other benefits - such as environmental or social - that you would like to support.
Becoming carbon neutral
Many businesses want to become carbon neutral - ie to reduce or offset their emissions so that their total net emissions are zero. The business benefits of this include:
- demonstrating a clear commitment to tackle climate change
- engaging employees and consumers on environmental issues
Under the government's definition, becoming carbon neutral involves three stages:
- calculating emissions - determining which emissions you're going to calculate, and collecting activity data on these
- reducing emissions - assessing what reductions you can make and deciding how to achieve this
- offsetting residual emissions - acquiring carbon credits to offset any emissions you can't reduce
The British Standards Institute (BSI) has also developed a Publicly Available Specification (PAS) 2060 on carbon neutrality. You can find PAS 2060 to buy online on the BSI website.
Calculate and communicate your organisational carbon footprint
Calculating a basic carbon footprint that includes the main emission sources is straightforward.
How to calculate your organisational carbon footprint
There are five key steps to follow to calculate your organisational footprint. These are:
- Decide on the method to follow - a consistent method will help to ensure an accurate result.
- Define the organisational and operational boundaries - the operational boundary determines which emission sources you will quantify, so it's important to be realistic when choosing it.
- Collate the data - you'll need to collate consumption data for all the emission sources within your chosen boundary.
- Apply emissions factors - you'll find the latest emissions factors on the DEFRA website.
- Verify the results - this is optional, but it adds credibility to your calculation.
If you have taken action to reduce your carbon footprint you may want to verify this. This is optional, but independent certification will add credibility to your reduction claims.
Communicate your carbon footprint internally and externally
Communicating your carbon footprint externally demonstrates that you are concerned about the impact that your business has on the environment. This is important to customers, investors and trading partners and can give your business a competitive edge.
You might want to have your footprint verified by a third party if you're going to publish it externally. This gives stakeholders confidence in your data. You'll need to provide full details of the steps you followed to calculate your footprint and be open about the impact any business changes might have had.
Telling your employees about the business's carbon footprint helps to involve them in carbon reduction and management. It also encourages them to make further savings if you explain the difference their energy-saving efforts make.
If you make year-on-year reductions in your footprint you can certify your reductions on the Carbon Trust Standard website.
Avoiding carbon credit scams
Carbon credits are financial instruments which permit the holder to emit one tonne of carbon dioxide. These can be traded if the emission allowance is not used.
Carbon markets are not intended for personal investors - if you buy carbon credits for money, you can fall prey to rogue traders and be unable to recoup your investment. Scammers can also use uncertainty around carbon markets to deceive businesses into handing over money.
What is a carbon credit scam?
Your business may be contacted by someone offering:
- carbon credit certificates
- voluntary emission reductions (VERs)
- certified emission reductions (CERs)
- a 'green' scheme or project that generates carbon credits as a return on investment
Such scheme do operate legitimately, however certification is voluntary and involves a wide range of bodies and different quality standards that are not recognised by any UK compensation scheme.
Projects generating carbon credits are usually based overseas so UK authorities have no way of controlling the quality or validity of the schemes.
You should be wary of any scheme which offer green products and services as financial investments. Many businesses have reported they can't sell or trade their carbon credits, and have lost any money they've invested.
Fraudsters can also attempt to pressure businesses into buying non-existent 'green' products through deception. Some contact businesses using the name "Carbon Registry" as part of the Department of Energy and Climate Change (DECC). They will attempt to convince you to buy carbon credits, VERs or CERs at high prices under the threat of government enforcement or legal action.
How to protect your business from carbon credit scams
Always be wary if you're contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.
It is important to know that carbon credits, emissions trading and such "green investment schemes" are not currently regulated by the Financial Conduct Authority (FCA). Even if an FCA-authorised firm is involved in the sale of carbon credits you have no right to redress or compensation if something goes wrong. You should always get independent professional advice before making any investment.
If you are contacted by someone claiming to work in a government department and applying pressure, take their details and contact the department through their main telephone number or contact form. You can find UK government department contact details on GOV.UK and contact details for Northern Ireland government departments on nidirect.
How to report carbon credit scams
If you have any concerns about a suspected investment scam, contact the FCA on Tel. 0800 111 6768 or by using their scam reporting form.
If the scam involves someone claiming to represent a government body such as DECC, you should contact the PSNI directly on Tel. 101 (the non-emergency number) or online through Action Fraud.