What better time to start a new initiative than in a new year?! 2021 was full of “build back better” messages with both people and businesses rethinking the way in which they should do things. Now that we are refreshed from our December break let’s set about turning those thoughts in to actions for 2022!
I recognise that this is easy to write or say but where should you actually start if you want your business to be sustainable?
Education and Engagement
The very first step is to ensure that there is engagement at the top of your business. In order for any organisational change to take place successfully the leadership has to be brought in and committed to the targets and goals which are set. There is sometimes a misconception that sustainability projects, along with others which aren’t on the face of it aligned to the main activities of the business, can be delegated to people other than those at the very top. The problem with this is that for a business to be truly sustainable it will often require a change to the way in which a business operates, or a change to the behaviours of its people and that needs to be both endorsed and role modelled from the leadership team.
It is therefore important that business leaders fully understand the impact of sustainability on their business. This is where the need for education kicks in to ensure that sustainability is really understood.
Once we have an engaged board, we then need to start the process of doing.
At Albert Goodman we provide two different approaches to getting our client’s sustainability actions started depending on what it is they want to achieve from a sustainability perspective and what their leadership see as being the biggest priority. One option is to focus purely on carbon emissions and the net zero journey and the second is to consider sustainability on a much wider basis and get this embedded throughout the strategy of the business.
If your main driver is to focus on your carbon emissions, then a good starting point would be to measure your current carbon footprint based on how you operate your business at present. There are lots of different options and frameworks for measuring carbon so it is important to understand what you would like to include within the scope of your footprint and what you would not.
When considering the emissions to include it is useful to refer to the greenhouse gas protocol which covers scoping.
Scope 1 covers direct emissions from owned or controlled resources. These emissions will be used directly on an entity’s own site or for its transport
Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling. These emissions are used on an entity’s own site but are produced elsewhere.
Scope 3 includes all other indirect emissions that occur up and down an entity’s value chain. These emissions will be indirectly controlled by the entity so are harder to manage.
For your initial carbon footprint, it may be simplest to focus on the emissions that are within your control and that you could do something about. This means focussing on your scope 1 & scope 2 emissions only and certainly feels more manageable than considering the supply chain as well. A framework which could be useful to follow in this regard is that of the Streamlined Energy and Carbon Regulations (SECR). These regulations came in to force for financial years beginning on or after 1 April 2019, and although are only mandatory for quoted companies, large unquoted companies and large limited liability partnerships (LLPs), they do provide a clear and recognised framework for reporting on emissions.
Given that smaller organisations are not yet regulated in this area, there is also the option to include additional emissions if you would like such as the emissions from your people’s commute, so the framework can be used as a baseline but still enable flexibility and tailoring based on what you would like to achieve.
Once you have your initial carbon footprint you can then use this data to understand which areas of your business are the most carbon heavy and then set out a plan as to how you may be able to reduce this over time.
If, however you would like to take a more all-encompassing approach to sustainability then a first action point could be to complete an Environmental and Social Governance (ESG) health check.
Through working with the Praxity network we have access to an ESG health check which comprises, approximately 35 strategic level questions and is aligned to the 17 United Nations Sustainable Development Goals as well as other sustainable best practice regulations. This gets an organisation to look not only how it is impacting the environment but also how sustainability is entwined in everything that the business does, including interactions with its people and stakeholders external to the organisation. Once the health check is complete you will then be provided with a score demonstrating how sustainable you are at present as well as some suggested areas of focus to enable you to become more sustainable as a whole.
So as part of the New year, New You that you may have embarked upon, why not extend this to your business, by starting board room level discussions, getting the ball rolling on the measuring of your carbon footprint or maybe completing an ESG health check. Essentially, assess where you are now, understand this and plan for the change.
By Sophie Parkhouse, partner at Albert Goodman