By Harry Morrison, general manager of the Carbon Trust Standard Company.
In April 2010, The Carbon Reduction Commitment Energy Efficiency Scheme came into effect. This imposes mandatory compliance measures on larger businesses, with many medium sized companies also required to measure and declare their carbon footprint. Those who don’t meet the targets specified face significant penalties. Those who do will reap the rewards in terms of the commercial advantages now inherent in a green economy.
While such a framework does not yet exist for smaller businesses, the business world does not operate in silos either. What affects big business will inevitably cascade down the supply chain. As large companies respond to their carbon cutting imperatives, words like ‘sustainability’ will increasingly enter procurement’s lexicon. This means that their suppliers, including small businesses, will come under pressure to similarly measure their carbon footprint.
Indeed, AMR Research has found that many organisations now require information, such as compliance certification, environmental certification and proof of existence of environmental policies, from their suppliers.
Add to this the cost savings from cutting energy use and the reputational benefits of taking an ethical stand on carbon emissions with staff and stakeholders, and the business benefits of making sustainability a business priority proves very compelling.
One way of demonstrating a business commitment to reducing emissions and giving a package of ad-hoc carbon cutting activities a degree of coherence and strategic direction is to work towards the Carbon Trust Standard.
The Carbon Trust Standard is now available to small businesses via an online application process. Designed for small and growing businesses, it’s a practical but convenient way to measure, manage and reduce a company’s carbon emissions while securing independent verification of its carbon credentials in the process.
In essence, gaining certification enables a company to operate with integrity. As companies jump on the green bandwagon, the practice of ‘greenwashing’ is emerging. Greenwashing involves promoting a misleading perception that a company's policies or products are environmentally friendly. This is not only disingenuous; it calls other companies green initiatives into question. By proving a genuine commitment to sustainability a company can differentiate itself from the crowd.
However, while the business rationale for forging a green agenda is clear, it has been delayed by the recession as acute financial concerns have taken hold. That’s not to say the two are unrelated. Each motivation for pursuing a sustainable strategy will also support a company’s transition from recession, to recovery to growth.
For instance, accounting software firm Benchmark Solutions used the Carbon Trust Standard to open a positive dialogue with its customers in order to retain and win new business. Its experience of carbon data capture also enabled it to add carbon monitoring features to its own customer accounting software, which it is now successfully promoting to its customer base. In Benchmark Software’s case, taking a stand on its carbon footprint not only made the company a more ethical and therefore desirable company to work with and for, but it enhanced its business proposition.
Taking a sustainable approach to carbon emissions can also have a direct and positive impact on reducing operating costs, which is highly desirable in these tough times and against a backdrop of rising commodity prices. The Government recently warned that energy bills may increase by as much as 26 per cent in the next 10 years. Unless action is taken to reduce energy use, these price hikes will have a detrimental impact, particularly when cash flow is tight. Equally those companies that dedicate time to examining how their emissions can be reduced are often better placed to implement more efficient business practices overall.
Taking a public stand on sustainability can also help companies win new business— either from other companies who only want to work with responsible businesses or from the growing number of carbon conscious consumers. According to a recent study by the Carbon Trust Standard, 48% of financial heads believe improving carbon performance delivers new business opportunities. This is certainly the case for Wiles Greenworld, an office supplies company promoting products less harmful to the environment.
Wiles Greenworld has embarked on a number of carbon savings measures with considerable success. As a consequence it has seen an escalating appetite for sustainable goods. So much so, it increased its sales by 7% even while industry benchmarks were down by 20%.
In reality, a tender economic climate is a major driver rather than inhibitor for sustainability. Becoming more energy-efficient not only cuts carbon but delivers real financial returns, increases operational efficiency and leads to preferred supplier status with clients and consumers alike. Those companies who tackle their carbon footprint today will lead the charge and benefit from the growing green economy of tomorrow.