How Do You Make Your Company Carbon-Neutral?

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Amazon says it will be carbon-neutral by 2040. Apple says it will get there by 2030. Microsoft even says it will be carbon-negative by 2030—in other words, the company will start removing carbon dioxide from the atmosphere, and it plans to have removed all its historical carbon emissions by 2050. It is good news for the planet that grand pledges from big companies have become increasingly commonplace. But where do companies that are not globe-spanning multinationals fit in?

  • Smaller companies can pursue carbon-neutrality just like any other firm, says Nick Aster of South Pole, a sustainability consultancy. The process is the same regardless of the size of the organisation: understand your carbon footprint by measuring your emissions; set an ambition, such as being net-zero or carbon negative; and take action by reducing and offsetting those emissions.

As well as being the right thing to do for the planet as a whole, it can deliver immediate advantages. Take energy procurement. A close look at where a company gets its energy from is an opportunity to switch to renewable sources and reduce energy usage. A survey by Deloitte, a consultancy, found that 90% of companies regard energy procurement as “not simply a cost to the company, but an opportunity to reduce risk, improve resilience, and create new value.” Similarly, the process of going carbon-neutral can help companies gain a better understanding of other aspects of their supply chains. There are marketing benefits, too: many customers may prefer a carbon-neutral supplier, given the choice.

But smaller organisations do face a few extra hurdles compared with larger firms when it comes to going carbon-neutral.

  • Lack of capacity is one challenge. Smaller firms “have fewer resources available in terms of finance, time, attention, knowledge, and employees to concern themselves with this challenge,” says Frederik Dahlmann, associate professor of Strategy and Sustainability at Warwick Business School in England.
  • Not owning their own buildings also makes things harder for smaller firms, says Abby Finis of the Great Plains Institute, a non-profit group that promotes sustainability. “This limits the control they might otherwise have over their energy assets,” she says, making it difficult to, say, install solar panels.
  • But smaller businesses are also simpler “With a less complex value chain and a smaller ecosystem of stakeholders, smaller companies can gather data more easily and move quicker to reach their goals,” says Mathias Lelievre, chief executive of ENGIE Impact, a sustainability consultancy. “In addition, it may require a smaller investment, which can make it easier to build a positive business case for a carbon-neutral program.

How do we become a carbon-neutral business?

Ah, yes. Costs. How expensive is all this? “Becoming a net-zero company is much cheaper than you may realise,” says Caitlin Drown of Climate Neutral, another non-profit sustainability group. On average, she says, “it costs about 0.4% of annual revenues to offset a company’s entire carbon footprint.” But offsetting is the last resort. The path to carbon-neutrality starts by measuring and reducing your company’s direct carbon footprint.