Net zero, carbon emissions and sustainability are well used daily terms across the business landscape and in the media. This is a positive thing, and long may the conversation – and action – around reducing our impact on the environment continue and build for individuals, businesses, the government and other official bodies.
Businesses large and small are taking steps to run more sustainable operations, whether forced due to regulations or voluntary, but in either case, the stumbling block in such activities is often the supply chain. Not only does the greatest environmental footprint usually lie within this space, but when there is a lack of data and transparency it can present a major hurdle. When businesses aren’t clear on the origins of their footprint, it becomes much harder to manage and reduce.
The business sector status quo
The UK’s business sector – which accounted for 18.7% of greenhouse gas emissions, or 61.9 million tonnes of carbon dioxide, in 2022 – must play a major and sustained part in the race to reach net zero by 2050. It follows, then, that supply chain businesses need to play a prominent part in driving this.
Requirements around emissions are far from uniform. For example, some larger organisations in the UK need to disclose Scope 1 and Scope 2 emissions, in line with the government’s Streamlined Energy and Carbon Reporting (SECR) framework. Depending on the sector, others may be impacted by extended producer responsibility (EPR) if they handle packaging, and companies with EU operations may face governance challenges through the Corporate Sustainability Reporting Directive. A growing number of organisations are also disclosing emissions data voluntarily through frameworks such as the Science Based Targets initiative (SBTi).
With the tide heading irrevocably in the direction of greater reporting requirements, larger businesses are reviewing their supply chains in order to report on Scope 3 emissions, where the largest part of this footprint is likely to be. As legislation broadens, smaller enterprises will follow.
Therefore, for businesses within these supply chains, there is an urgent need to throw a spotlight on their own operation and be clear about its environmental impact. Usually, a lack of transparency doesn’t stem from an unwillingness to share data but is instead due to uncertainty around where to start. However, by not taking a proactive approach to sharing and reducing their footprint, these suppliers risk losing out on business to a growing number of competitors that do.
Where to start on the journey
The initial focus for any organisation seeking to reduce their impact on the environment is to look inwards to measure and reduce Scope 1 and 2 emissions. This includes emissions made directly by the firm, for example through its fleet of vehicles, using the boiler, or the energy it purchases for heating its offices or powering its machinery.
Once measured, businesses can assess where the greatest emissions are produced and make appropriate adjustments. Changing supplier, improving recycling processes, finding energy-saving solutions – such as more efficient appliances and light bulbs – or implementing energy reduction policies in the workplace can all reduce operational emissions.
Scope 3 emissions are next, but these are far more challenging to monitor because the business is not directly responsible for them, and can occur up and down their own supply chain. Even suppliers need to choose to work with organisations that prioritise sustainability and transparency.
Supporting preservation
For proactive businesses that have done all they can to address Scope 3 emissions but are perhaps aiming for net neutrality, offsetting is a good approach to take.
In this sphere, businesses often opt for tree-planting schemes to offset the carbon the business is emitting with new trees that will remove this carbon from the atmosphere. Trees can absorb around 21kg of carbon dioxide every year, meaning that one acre in a forest can absorb double the amount of CO2 produced by an average car in a year. However, this level of carbon absorption can only reliably happen once the tree is mature, around ten years after it is planted.
Another option is forest preservation in favour of planting trees, to protect the forests that are already at work absorbing carbon dioxide and the delicate ecosystems within them.
In addition to absorbing carbon, these trees retain it throughout their lives. This is why deforestation is the cause of approximately 10% of global carbon emissions. The process released stored carbon back into the atmosphere. Moreover, deforestation often occurs to clear land for uses that further contribute to global carbon emissions.
Preservation also protects these habitats that have formed over millions of years to create finely balanced ecosystems that are irreplaceable, alongside the species that inhabit them. There are many reputable schemes that businesses can consider supporting or partnering with to protect our rainforests, such as Rainforest Trust and Amazon Conservation.
Sustainability is good for business
The Environment Journal reports that 69% of CEOs view sustainability as a growth opportunity, whilst Business Reporter shares that one third of UK business leaders report that sustainability action is already having an impact on their companies’ revenue, profitability and growth.
The business incentive goes beyond the urgency of climate action, and there are a growing number of resources available to support businesses in their journey, including the UK Business Climate Hub for SMEs, or certifications such as becoming a B Corp.
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