Before we begin, let us share a few statistics around carbon footprint and small businesses, from recent UN-backed research: SMEs (Small to Medium-Sized Businesses) make up 90% of the business worldwide and are responsible for the livelihood of 2 billion people. But only about 50% of the SMEs calculate their carbon emissions.

Of these, about 60% plan on decreasing their carbon footprint, but a majority worry that they don’t have the right knowledge, tools, or funds to do so. If we look at these statistics, it can be deduced that while there is intent, there is no action because people need to understand the space better.

Well, consider this article as a guide for small businesses to understand carbon emissions, carbon footprint, carbon offsetting, and net-zero. Besides these, you’ll also be learning a few actionable steps that can help you reduce your impact on the climate. Let’s dive in!

What is Carbon Footprint?

In simple terms, the carbon footprint is the amount of direct and indirect greenhouse gases and emissions released into the atmosphere by any individual, group, or organization. Direct emissions are those that are caused by the entity itself, and indirect emissions are a result of some activity/product/service offered by the entity.

Since we’re discussing small businesses, it is the number of emissions from companies that impacts the climate. The first step to reducing the impact on climate is awareness.

Understanding how much emission your business is responsible for is necessary. This can be done by developing a carbon footprint. Here’s how you can do that.

How do Small Businesses Develop a Carbon Footprint?

Although the entire process is only three steps, it requires time, energy, and resources. So ensure that before you begin, your entire team is in on this. It would also help if you hire an expert who can aid you with everything.

Step 1: Understand the Scope of Emissions

In general, there is a standard way in which greenhouse gas emissions are categorized into. Primarily, there are three scopes: Scope 1, Scope 2, and Scope 3.

• Scope 1 consists of all direct emissions of an entity;
• Scope 2 consists of indirect emissions from electricity used, where the process of manufacturing that electricity causes emissions;
• Scope 3 consists of indirect emissions from business travel, use of sold products, processing of sold products, and more.

It is important to understand what each of these consists of. Based on this, you can move to the next step.

Step 2: Choose the Scopes You Will Include in the Baseline Year

Since you’re a small business, you can begin with choosing which scopes you will include. For starters, you must include Scope 1 & 2, in your list without fail. This is because the data for them is more readily available, and you can measure the footprint rather easily.

Scope 3 is difficult to include in the beginning because the source of those emissions is not in your control. As you grow, you can start including various Scope 3 sources and measure them.

Your baseline year is the year you will start measuring the footprint. Ideally, choose the year from which data was readily available to you and business was as usual. This would give you a good idea of how much your footprint is.

Step 3: Calculate the Carbon Footprint

There’s simple math when it comes to calculating the footprint. The most common formula for this is:

Activity Data x Conversion Factor = Carbon Emission

You can leverage online calculators and platforms that can help you with the calculations. All you have to do is enter the data and get your results. The RED Platform recently launched a corporate carbon footprint calculator that is only available for franchises. It is as easy to use as the one for individuals, but for the corporate one, you only need information about the company. More details exist in the article dedicated to the launch of this type of calculator.

Now that you have your carbon footprint, it’s time to look at how you can reduce it.

How to Reduce Carbon Footprint?

Carbon footprint can be reduced by optimizing the various activities that release CO₂ and other greenhouse gases. Innovative methods, tools, and workflows are used to achieve the same result but with fewer emissions.

However, since these emissions are inevitable, you can only do so much to reduce them. So how do we accomplish results beyond this? Here’s where concepts such as carbon offsetting, carbon-neutral, and net-zero come into play.

Carbon offsetting is the process where you invest in activities, projects, and businesses that are environment-positive. A good example is planting trees. The idea is to record the volume of emissions your company releases into the atmosphere and invest in other projects that work towards removing emissions from the atmosphere. This way, you are countering the effects of your carbon emissions by investing in a project which removes those emissions. Once these two volumes are matched, your company becomes carbon neutral. This is also known as net-zero carbon.

However, if you’ve noticed, throughout the article we also mentioned greenhouse gases and not just carbon emissions. This means that for a company to be completely net-zero, it needs to take into account other climate-negative gases as well.

Now that you know what carbon footprint is, you can start calculating it with our free corporate carbon footprint calculator if you are a franchisee and then reduce it. Register on the RED Platform and make a change today!