By Paul Rekhi, Head of Carbon Services at Advantage Utilities

Understanding the evolution of our carbon footprint is key to comprehending the urgency and significance of emission reduction today. According to the Global Carbon Project, between 2011 and 2020, carbon dioxide emissions averaged at 38.8 billion tons per year, but our land and ocean sinks which convert this CO₂ have only been able to support 21.7 billion tons yearly. This deficit in emissions is what has caused the atmospheric CO₂ growth rate which in turn has led to global warming and climate change. These are defining issues for businesses, hence the need to report and then reduce carbon emissions is more important than ever. I recently hosted a webinar where I discussed this very point, advising businesses on how to implement a credible plan to achieve net-zero as well as lower energy costs. 

In this article, I will share those insights, discussing how ESG emerged as a key consideration for businesses today. I will then outline how businesses can go about measuring their carbon by using the carbon-ethics cycle which includes the steps they should take to streamline the road to net-zero via effective carbon reporting.

The distinction between net-zero and carbon neutral

There is an important distinction to be made about what we mean by ‘net-zero’ and ‘carbon neutral’. Net-zero involves counting emissions, then organically removing these emissions from the business. What carbon neutrality involves is the same accounting principle of greenhouse gas (GHG) accounting but also taking accredited carbon offsets to help counteract GHGs released and reaching a zero-carbon footprint. However, to get to true net-zero you have to account for it – that means having oversight into your scope 1, 2 and 3 emissions. 

Scope 1 emissions are direct emissions such as company facilities and vehicles. Scope 2 emissions primarily involve indirect emissions stemming from purchased electricity, heating and cooling. Finally, Scope 3 emissions involve everything else your business does; this starts with upstream activities, everything that happens before your organisation – ‘from cradle to gate’, including bought goods, employee commuting and leased assets,  through to  downstream activities, everything that happens after – from gate to grave, such as processing of solid products, transportation and investments.

The importance of carbon reporting

As corporate guidance emerged and the damaging effects of excess carbon emissions were accepted, this led to large companies being required to report on their scope 1 and 2 emissions. If an organisation meets two or more of the following criteria; a turnover or gross income of £36 million or more; balance sheet assets of £18 million or more; or 250 employees or more; then they must stay compliant with UK government regulations such as theStreamlined Energy and Carbon Reporting (SECR) and Energy Savings Opportunity Scheme (ESOS). Of the 5.5 million UK businesses, only 7,000 fall into the category of having over 250 employees. 

But this is not just a checkbox exercise, it is a strategic move. Proper carbon reporting not only ensures compliance but also positions your organisation as a responsible and forward-thinking entity, which is why it has become widely accepted for organisations to establish an ESG department.

The carbon-ethics cycle

To enable businesses to track their carbon emissions, we created our carbon-ethics cycle, to enable organisations to measure, manage and reduce their emissions as efficiently as possible. 

Our starting point is to understand businesses – their sites, their objectives and their needs. From here, businesses should measure and certify their scope 1, 2 and 3 emissions which act as an organisation’s benchmark on how much carbon was associated with their business, within a given period – usually by financial year. Without first measuring emissions, you cannot manage emissions, making progress towards net-zero very difficult. 

Once we have that benchmark, consultation with each department of the business is crucial to effectively reducing emissions, looking at how energy is used (when and where) as well as how it is procured. From there, technology such as solar PV, heat pumps and voltage optimisation, can be used to make energy savings and increase sustainability. 

Reducing/offsetting emissions may also be necessary if reducing emissions is not possible. The final step is to report and re-certify their emissions, allowing comparisons to be made to benchmark data. And this is an ongoing process, so the cycle can begin again on the journey to net-zero. But what this cycle achieves is a streamlined process that enables the most progress to take place.

So where are we right now? With large companies required to report on their carbon, other companies are also taking it upon themselves to expand their own reporting. There are several types of clients that get in touch with us to measure their carbon and reduce their emissions. One of them are the large companies, but others include organisations with supply chain partners requesting carbon data, companies with competitors measuring carbon emissions, environmentally conscious companies as well as others.    

A structure to measuring carbon within your organisation

Businesses all start from the same position: having to change their processes and behaviour in order to measure carbon. Progress is only made by building upon this foundation, with Standard Operating Procedures (SOPs) offering the next step in ensuring compliance throughout the business. On top of that, policies are overlaid which runs and controls the business.

But there are also two ‘floors’ that are missing in this structure. The first of these is accounting, reporting and marketing. Without measuring and accounting what it is that you are doing as a business, the effects of your progress will be minimal, which is why marketing is also crucial to enhancing brand image and customer loyalty. The final step is planning and execution, fundamental to realising your organisation’s goals. This cannot be forgotten as this is where businesses must ensure they have all the experience, expertise, knowledge and skills in place to report for what they do.

To conclude, businesses implementing carbon reporting will find that progress towards net-zero is far easier. The need to reduce emissions is clear and the systematic measurement, management, and subsequent reduction of emissions is made a tangible possibility through the streamlined and efficient approach outlined in the carbon-ethics cycle. A collaborative and structured carbon reporting process allows businesses to meet reduction targets successfully, ultimately leading to the attainment of net-zero status.

By Rob King, CEO and co-founder, Zedify

The retail trade sector employs over 4.9 million people in the UK making it the country’s largest employer. However, and particularly with the rise in ecommerce over the last few years, it is also one of the biggest polluters. 

Data from the British Business Bank shows that the retail supply chain is one of the biggest contributors to UK greenhouse gas emissions and carbon emissions due to ecommerce logistics are forecast to hit around 25 million CO2 metric tonnes by 2030, according to Statista. 

And so quite rightly, the industry is under renewed pressure from government, and from consumers, to engage in more sustainable business practices. Our research with Unidays shows that over 80 percent of Gen Zers are prepared to pay more for sustainable goods and services, while brands rating highly on the Kantar Sustainability BrandZ Index grew brand value by 31% year on year, showing that businesses taking sustainability seriously are outperforming those that are not.

This shows how being more sustainable is not only good for the planet; it can boost retail sales too. It’s why companies including Primark joined the UN Fashion Industry Charter in 2020, committing to a 30 percent reduction in greenhouse gas emissions by 2030, promising to double the number of products using recycled materials to 40 million and introducing an in-store recycling scheme for customers. So, how can other UK retail businesses follow suit and what can they do to become more sustainable this year?

Address the last mile 

The World Economic Forum predicts demand for last mile delivery (from warehouse to customer) will grow 78 percent by 2030 due largely to the explosion of ecommerce over the last decade. As a result there has been a big increase in van journeys, particularly in our cities, which is having a big impact on carbon emissions and air quality. 

And so the last mile has become a highly polluting part of the supply chain. Electric vehicles have been positioned as the answer, but in reality they only save 30 percent on carbon emissions compared to their diesel equivalents, which just won’t get us to net zero. So follow the likes of Zara and consider more sustainable carbon saving delivery options, including cargo bikes, which slash carbon at the source, making any business model inherently more sustainable.

Offer PUDO for delivery and returns

A PUDO (“Pick Up Drop Off”) location is a designated place for the collection of parcels and possible returns. Typically, PUDOs are available through a parcel locker system in public areas next to supermarkets and petrol stations and in any other place that experiences high volumes of traffic.

The majority of online shoppers still prefer home delivery, so click and collect locations and lockers are not a silver bullet when it comes to sustainability. However, if placed in the right locations they can help reduce emissions, as well as making consumers feel like they have more control over returns in particular. After all, we know customers are looking for retail businesses who can prove their sustainability credentials and so, much like offering cargo bike deliveries, having a PUDO delivery and return option will appeal to them, not to mention the flexibility and convenience they offer.

Review your returns policy

According to The British Fashion Council’s Institute of Positive Fashion, 23 million returned garments were sent to landfill or incinerated in 2022 alone. This generated over 750,000 tonnes of CO2 emissions and Keep Britain Tidy estimates 10,000 items of clothing are thrown into landfill every five minutes in the UK.

With online returns in the UK predicted to increase by 27.3 percent in the next five years, it is a big problem and retailers need to address it, fast. 

The most common reason for UK returns is size and fit; in the absence of being able to try clothes on in a physical store, many shoppers buy one size up and one size down knowing they can safely return the sizes that don’t fit at no cost. 

Returns experts ReBound and sizing experts My Size ID help businesses identify ways that the online shopping experience can help improve the accuracy of sizing, while some retailers are identifying their serial returners and starting to charge fees for returns. 

There’s also mounting evidence that longer return policies can surprisingly lead to lower incidents of returns, while there is also an opportunity for retailers to start educating their customers about the true environmental impact of returns.

The future

By addressing last mile logistics, considering PUDO options and overhauling their returns policies, UK retail businesses can go some way to reducing the environmental impact of their operations in the coming years.

Making headway on net zero targets and taking steps to improve sustainability across the supply chain will also appeal to increasingly environmentally conscious consumers. These consumers are increasingly prioritising businesses who not only have sustainability at their core, but can prove the effectiveness of their environmental policies. 

Karl Breeze, CEO at Matrix Booking

The world is facing an existential threat: climate change.

As this threat looms larger than ever before, the race to achieve net zero is on. And this is not simply a race that any tortoise can win either. Time is not on our side.

Public and private sector organisations across the globe are now feeling the pressure to act in reducing their carbon footprints and better contribute to the  goal of net zero by 2050. According to research that was published at the World Economic Forum in Davos, more than a quarter (26%) of UK CEOs feel they are moderately or extremely exposed to the threat of climate change over the next 12 months.[i]

Yet, despite the urgent need for businesses to reduce emissions and move towards a more sustainable future, there are many asking how to achieve this ambitious target. The answer lies in the power of data.

The simple notion of leveraging data-driven solutions is fast becoming a critical tool in paving the way forward. Specifically, through resource management data, businesses can gain a deeper understanding of their emissions and identify areas for improvement. With it being harder for organisations to effectively manage what space they need – due to a surge in remote working – data has become the key to taking targeted steps in reducing their carbon footprint and implementing more sustainable practices.

The clock, however, is ticking and the race to net zero is one where businesses are starting to fall behind. It’s time to pick up the pace with the help of data.

Navigating the obstacles

Without accurate data, businesses across all sectors may not even have a clear picture of their environmental impact, making it impossible to identify areas for improvement. Not to mention, adapting to the changes of the working world  has presented a plethora of challenges, too.

Between an uncollaborative approach thus far, increasing costs and business leaders trying to account for where and how people work, those dealing with an organisation’s resources are being pushed to their limits  to maintain efficiency, let alone achieve net zero. Since the pandemic, underutilised space and energy price shocks have been driving real estate executives to reset their strategies by bringing a greater focus on space optimisation and reducing energy expenditure. To support these initiatives, firms are investing in technology to drive efforts and achieve ROI.[ii]

But the biggest challenge to even acquiring accurate data is funding. Implementing energy-efficient technology or data collection software, or even investing in renewable energy sources can require significant upfront costs. This may be a barrier for many, particularly in the public sector where budgets are restricted. However, you can’t manage what you don’t measure. Data provides a clearer insight into combatting these challenges and can lead to a long-term ROI. More importantly, it  supports an organisation on their journey to net zero.

Net zero to hero

As one of the most powerful tools in the fight against climate change, leveraging the right data can allow businesses to gain valuable insights into their energy usage patterns, identify areas for improvement and track progress over time. One element for organisations across every sector to consider is how employees now work.

The shift in how we work has led to  wasted resources and unnecessary carbon emissions in other areas, specifically office spaces. Therefore, utilising the right management data can allow firms to once more fully understand their physical resources. Data can reveal certain areas of an office that can be consistently over or underutilised, indicating an opportunity to adjust the layout or occupancy allowance to save energy and improve efficiency from a business perspective.

Furthermore, saving money on reduced office space and equipment can allow for greater investment into net zero initiatives, such as green leasing. Green leases serve as a means for decarbonising real estate and opens a more collaborative effort between landlords and tenants, all in support of net zero.[iii]

Whilst reducing the size of office spaces can enable companies to cut down on their carbon footprint, there is a catch. As more people work from home, the burden of emissions is being shifted to their households instead. The individual behaviours of staff, from energy use and travel to digital footprints and waste management, fluctuate wildly and is harder to measure and control, let alone enforce by the government. Therefore, it’s crucial to instil a company culture of sustainability by setting policies and providing support to help workers reduce their environmental impact while working from home.[iv]

The path less travelled

The term net zero is not something that should lead to eyerolls and sighs – it’s a term that should inspire change. Change towards a more efficient and cost-effective business model. Rather than considering net zero as a burden, business leaders should think of it as an opportunity to improve how they operate, decrease long-term costs and increase efficiency.

Despite uncertain short-term market prospects, many UK companies do plan to increase investment to reduce their carbon footprints. Almost half of business leaders (49%) surveyed by the British Property Federation plan to accelerate the delivery of their net zero programmes over the next 12 months.[v]

Now more than ever, data can be used to inform and drive business decisions to capitalise on climate action. However, achieving this will require a full-scale review of an organisation’s internal strategy, targeting precisely where they can reduce emissions and eliminate waste. With the application of data management systems, companies can leverage insights that not only align with their business objectives but also their net zero objectives, enabling them to better understand their environmental impact and accurately forecast reduction scenarios.

With mounting pressure from governments across the world as well as growing awareness amongst the general public, the race to net zero is one that business leaders need to pick up the pace on  before it’s too late.

[i] Green Retail World,PwC CEO survey: Businesses feel significantly exposed by climate change

[ii] Ben Readman, Verdantix, 2022

[iii] JLL, Green Leasing 2.0: Bridging the owner-occupier divide to deliver shared ESG value.

[iv] Harvard Business Review, Is remote work actually better for the environment?

[v] i-FM,Property looks to accelerate decarbonisation