Make your business carbon neutral

With environmental concerns taking centre stage, businesses and organisations are realising the benefits of setting their business on a carbon neutral target.

For businesses to stop contributing to climate change they need to become carbon neutral. This is achieved by balancing your business’s carbon emissions with an equivalent amount being sequestered or offset. Generally all greenhouse gases (e.g. methane, nitrous oxide, etc.) are included in the drive to become carbon neutral, not just the carbon gases (i.e. carbon dioxide).

Climate change caused by human produced carbon emissions has led governments globally to implement carbon emissions schemes to reduce our carbon emissions. Change in this area is gathering pace as the scientific evidence and the impact of climate change becomes more alarming and more predictable.

The sensible business response is to understand your business’s exposure to carbon risk particularly in your operations and supply chain, then minimise that risk. Carbon risk includes price increases as well as legislative and regulatory change.

It also makes commercial sense to demonstrate to your clients, staff, and potential recruits that your business cares about the environment and our future.

So audit your business, set your carbon reduction target and feel positive about yet another aspect of your business.

How to do it now!

The carbon audit tool helps your business set targets, identify areas of your business that are the source of your current carbon emissions and measures progress toward your carbon reduction goals.

If we take ‘what we can measure, we can improve’ as a starting point, then the following steps outline a cycle by which you can move your business toward becoming carbon neutral.

  1. Set your organisation’s carbon reduction targets and goal.
  2. Audit your business’s carbon footprint.
  3. Act on opportunities to reduce your carbon emissions.
  4. Offset your remaining carbon emissions.
  5. Evaluate progress and repeat from step 2.

1.  Set your organisations carbon reduction targets and goal
Reducing your business’s carbon emissions and becoming carbon neutral requires leadership at the top level of your organisation and a commitment to your business taking responsibility for its contribution to climate change.

For example, your company sets a goal to be carbon neutral in five years.

  • Year 1 – target 20 % reduction in baseline emissions via energy efficiency actions or carbon offsets.
  • Year 2 – target 40% reduction in baseline emissions via energy efficiency actions or carbon offsets.
  • Etc…

2. Audit your business’s carbon footprint
Establishing a clear picture of your organisations carbon emissions or carbon footprint enables you to apply the targets in real numbers. The carbon footprint is a measurement (detailed or approximate) of a business’s…

  • Scope 1 – Direct carbon emissions from owned or controlled sources.
  • Scope 2 – Indirect carbon emissions from key indirect sources (i.e. purchased electricity).
  • Scope 3 – Indirect carbon emissions from all other indirect sources (i.e. emissions resulting from production of purchased materials, employee travel, and other outsourced activities).

Taken together, these constitute your emissions inventory. The emissions inventory contains your main sources of emissions and therefore identifies your opportunities for abatement, and covers all areas of your business including energy use, operation of stationary equipment, transport, supply chain engagement and waste generation.

The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard
The accepted carbon footprint calculation methodology follows the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, produced by the World Resources Institute and the World Business Council for Sustainable Development. The GHG Protocol introduces the concept of ‘Scope’ as a means of defining the difference between direct and the two types of indirect carbon emissions. 

Overview of scopes and emissions across a value chain.

Identifying and calculating your Scope 1 & 2 emissions is the base of your carbon audit.

Scope 1:
Direct emissions produced by the daily operational activities of your small business, where the emission sources are directly owned or controlled by your small business:

Examples include:

  • Gas consumption – Gas units to be in MJ.
  • Other fuels consumed on-site, e.g., diesel for back-up generators, or LPG, etc.
  • Fugitive emissions: Refrigerants – type, quantity and cost of refrigerant used to recharge heating, ventilation and air-conditioning (HVAC) equipment.
  • Fuel used and paid for by your small business when you or your staff or contractors travel in your small business vehicles for business purposes only. [Note that travel costs incurred by your use of hire cars or taxis are included as Scope 3 emission sources. Staff personal travel is omitted from scope since travel between home and office is assessed to be independent of the activities of your small business].

Scope 2:
Indirect emissions produced by the on-site consumption of electricity:

  • Electricity – electricity units to be in kWh.

Scope 1 and 2 emission sources form the mandatory organisational boundary for the accounting and reporting of GHG emissions. Scope 3 emissions occur further along the value chain from sources not owned or controlled by your small business.

Note that in a service-based business, it may occur that the majority of GHG emissions can fall within Scope 3. 

Compile your Scope 1 & 2 inventory using the NGERS calculator

To assist you compile your Scope 1 and Scope 2 emissions inventory you can calculate your direct (Scope 1) and electricity indirect (Scope 2) emissions by using the Clean Energy Regulator’s National Greenhouse and Energy Reporting Scheme, where there are links to the NGERS Calculator.

The calculator is a free online tool to assist corporations (including small business) to self assess whether or not they should apply for registration under the National Greenhouse and Energy Reporting (NGER) Act 2007.

Note that use of the calculator is provided for information only. The NGERS Calculator does not require a password for access. Use of the NGERS Calculator is anonymous. Data entered during your session will not be retained when you exit the application. A PDF copy of your assessment can be saved at the end of your session.

Scope 3:
Indirect emissions produced as a consequence of you conducting a business, but where you have no ownership and cannot control the emissions:

Examples include:

  • Disposal of waste and products at end-of-life (non-recyclables) generated in conducting your small business. This accounts for emissions generated (transport, etc.) during off-site disposal by a third party.
  • Water used (L or m3) in conducting your small business. This accounts for emissions generated during pumping and sewerage treatment, etc. by a third-party.
  • Your business-related domestic and international flights.
  • Travel costs incurred by your business use of hire cars or taxis.
  • Expenditure for telecommunications, internet, office equipment and third-party services.
  • Extraction, production and transportation of purchased fuels and other purchased materials or goods.
  • Generation of electricity that is consumed in transmission.
  • Activities outsourced to third-parties.
  • Professional services, including the activities of your employees.

Compile your Scope 3 Emissions Inventory

If your main Scope 3 emissions are incurred by business travel and waste, you can calculate your other indirect (Scope 3) emissions by exploring the National Greenhouse and Energy Reporting Scheme.

If your main Scope 3 emissions are incurred by business travel only, you can calculate your other indirect (Scope 3) emissions by using Carbon Trust’s Business Carbon Footprint Calculator.

Other calculators are available on the internet, but as yet there are no standards for calculating all of the Scope 3 emissions of your small business.

3.  Act on opportunities to reduce your carbon emissions

As a result of your conducting a carbon audit of your business you will have a detailed understanding of those parts of your business that are contributing to your carbon emissions and a sense of where to start acting on these to reduce your carbon emissions.

The following actions can provide you with suggestions and opportunities to lower the carbon emissions of your business:

Energy Conservation

Waste Minimization

Water Conservation

4. Offset your remaining carbon emissions

Energy efficiency actions may not be sufficient to generate all the emissions reductions required to hit your target. In these instances carbon offsets can be used. The following two approaches are common:

Purchase Green power – Switch the consumption of your electricity to a renewable source (See our Buy Renewable Electricity action).

Offset your remaining emissions. A quick, effective and popular way to address the many tonnes of greenhouse gases we emit is to pay someone to offset these by planting enough trees to absorb our emitted CO2. Organisations that provide this service include:

  • GreenFleet – non-profit – approximately $12.50 per tonne of CO2 offset.
  • Carbon Neutral – non-profit – approx $20 per tonne of CO2 offset.

A more effective and permanent (yet more expensive) way to offset your emissions is through investments in renewable power generation, which trades your fossil fuel use against reduced fossil fuel use elsewhere.

Of course, offsets should not be a substitute for reducing the CO2 we emit in the first place!

5.  Evaluate progress and repeat from step 2.

Regular evaluation of the process and actions taken will aid future efforts and actions where emissions can be reduced and offset. In addition, it will build knowledge of successful approaches and possible pitfalls to ensure that the next cycle is more effective than the last.

For example, future equipment purchases (i.e. cars and plant) can be planned to deliver future efficiency gains.

Additional resources

Additional information on saving power at work is available from the following sites:

Why is this action important?

Sustainable living guide