How to become carbon neutral
Becoming carbon neutral is not as simple as paying a fee. It is quite an involved process, though one that is worth it. Here are some of the lessons we've learned along the way.
Main image: Carbon offsetting through reforestation of the Yarra Yarra Biodiversity Corridor.
A few years ago we had time to reflect on the positive contributions we had made to the industry, to our clients, our team and society overall. While reviewing all the good stuff, we had to confront that we, like most businesses, had had a negative impact on the environment.
We have several offices with clients and team members in different locations, often requiring a lot of travel. Add to this an enormous number of computers and monitors, along with heating, air conditioning, general electricity, paper, water etc., and the impact is significant. There was a cost to the environment of us doing business and after being in operation since 1999, the cost was starting to add up.
So we decided to go carbon neutral for our 20th birthday (1 July 2019). As we wanted to achieve it by that date, our assessment needed to be based on the previous financial year, 1 July 2017 to 30 June 2018. Now, for the third financial year in a row, we have offset our carbon emissions that we created throughout the year.
Looking back, we were a little naive about the effort that we would need to undertake to achieve carbon neutrality. We essentially figured we just had to list the major carbon emitting activities, such as how much electricity we had used and how many flights we had taken. Turns out it is a lot more involved than that!
We believe that it is now the responsibility of businesses to offset any carbon emissions that they create in their pursuit of doing business.
We are extremely committed to helping as many companies as possible become carbon neutral. As such, we want to share the information about what it takes to become a carbon neutral business. By having a greater understanding of what you are in for, it will hopefully improve your experience of the process and prepare you for the effort involved.
Here is the process to become carbon neutral:
- Measure your footprint
- Reduce emissions where possible, and
- Offset the remainder to have a net zero footprint.
Measuring your carbon footprint
Below is a summary of common items measured in assessing the carbon footprint of a business. The ‘must be included’ list requires you to find evidence of each of these items.
If you have your own invoices for water and electricity, this process is generally fairly straightforward. On the other hand, if you have a shared or serviced office, apportioning your share can be tricky. In this case, the advice is to identify the overall electricity for the office and divide it by the head count and multiply by your number of team members. Similarly with water bills.
This process can be quite difficult and you may need to get the assistance of the assessor to use a generic per head calculation.
Travel to clients
When it comes to assessing your travel, this can be tricky, as it is not just about travelling interstate or internationally. Travel includes local travel to and from clients. This can be fairly easy to work out if you have company owned vehicles.
If you have a company Uber account, you can download your statement for the financial year. We switched to this model as it was easier to track all of the trips we took to see clients during the year. Occasionally a team member would accidentally charge a personal trip to the account, though this can be easily switched, ensuring that your costs and data are accurate.
We included train and tram travel in our assessment, though this was an estimate as we did not have sufficient data to get a precise figure.
Our biggest impact on carbon dioxide emissions came from air travel. After trying to collate the data for the first year, we moved to a travel agency to capture all of the data in one place. This also allowed us to have improved self-booking and approvals systems. The only challenge we faced was that at the end of the financial year we could only produce a report on all of the invoices that had been generated, not the flight data. So we exported a list of all invoices and had to go through each trip and assign an origin and destination. This was tedious and time consuming and in hindsight we should have directly asked the travel agent for better flight data.
The number of nights accommodation is also calculated in your total. So if you use specific hotels then they may be able to help you with the data relating to how many nights your team stayed in that hotel in the last year.
A number of initiatives over the last decade have reduced the amount of office waste, largely through recycling. The calculation of this waste relies largely on the size of your bin, how full it is and how often it is collected each week. It is not a precise science as most offices do not weigh their waste on a weekly basis.
For businesses such as restaurants or manufacturing where waste is a lot higher than an office, the calculation can be a lot higher. Some organisations do receive a weekly waste weight amount and the invoices can be submitted for calculation.
In assessing paper usage, first identify whether your supplier may have offset the carbon footprint of their paper for you already. For example, Reflex does this. Finding the receipts for the office paper can be tricky if you do not have a dedicated stationery supplier who invoices you. Another way to check it is to identify if you have access to monthly reports from your digital copier. We receive a monthly report from Konica Minolta and were able to submit it to the assessor. That said, as our paper was already offset, we received a credit for this item. However, the printing itself is a different calculation and we have not included it in our carbon assessment.
Other areas that you should consider
Assessing travel, electricity, water and waste are essential in calculating the businesses footprint as they are the largest contributors to greenhouse gas emissions. There are some other areas that are recommended to include in the assessment to understand the broader impact your business has on the environment:
- Postage, courier and freight
- Staff commute to the office
- Food and catering
- IT equipment
Postage, courier and freight
For companies that send a lot of freight or parcels you may need to rely on invoices as the source of the data. However if you have a single account with a freight company, then see if you can login and export all deliveries for the given period. Individual payments for parcels sent over the counter at Australia Post are harder to track in your accounting system.
Assessing the staff commute means you need to ask a sample of your team members how they get to work each day. Coronavirus restrictions have impacted people's travel habits as people in most states of Australia have had a period of time working from home. This period can easily be excluded from the assessment. Sending your team a simple survey will produce a lot of data about their commuting habits that you can provide to the assessor.
Food, catering and IT equipment
Specific numbers on food, catering and IT equipment can be difficult to identify. So the suggestion is to export the invoices for these categories from your accounts system and provide them to the carbon assessor.
Other items to consider
- Office printing
- Cleaning services
- Data centre electricity
Any other emissions sources which the organisation considers as relevant.
Reducing carbon emissions
As businesses grow it is natural that carbon emissions increase. More meetings, more computers, and more offices, all contribute to the total. Increased demand creates increased growth which creates a bigger footprint. Our challenge is to find ways to reduce carbon emissions as we grow.
Electricity usage has a huge impact on our carbon footprint. One strategy is to purchase renewable energy, which reduces carbon emissions and your total carbon footprint. If the cost is prohibitive or renewable energy is not available to your business, then the focus needs to be on reducing your energy usage. This includes turning off appliances when they are not in use.
As there can be many appliances (and lights) in an office, hooking them up to a smart adaptor that automatically switches them off at a set time, ensures that they are not left on overnight. The coffee machine and meeting room TVs are a prime example of this. They are used for around 6-8 hours per day, though many businesses leave them on full time. A smart adaptor such as TP Link Smart Plug (around $25-$35) can be connected to your wi-fi and be used to schedule each appliance. The upfront cost will be easily covered by the energy reduction on large appliances and the reduction in carbon offset costs.
Going out and buying a more energy efficient fridge when the current one is working fine is unlikely to be cost effective for you or the environment. Instead, ensure that new appliances that definitely need to be purchased are rated at the highest energy efficiency level you can afford.
As for office lights, ensure they are turned off overnight. The cleaners are quite capable of finding them and turning them on, so switch them off and ensure they do the same when they leave.
If you have an espresso machine, recycling your coffee grounds through an organisation like Reground is fairly inexpensive. They divert the coffee from landfill and it is used as fertiliser to grow food.
Providing your team with branded reusable cups can reduce takeaway cups and associate your brand with that reduction.
Most offices have recycling bins. Though very few have compost bins, largely because they are difficult to process and if left too long, can smell. There are very few options for processing and to initiate this program, you may need to recruit some staff to take the food waste home for composting. This is not ideal as it may be difficult to transport and the program can cease if a staff member leaves or becomes no longer inspired to take a bag of food scraps home each week. If you can come up with a sustainable plan around food waste, it can reduce your emissions. Food waste that rots in a tip, can produce methane and contribute to greenhouse gas emissions. Food waste in a compost is aerated and the methane is largely not produced and the waste transforms into usable soil.
Installing water filters and even soda stream machines, can reduce the amount of plastic brought into the office. It also reduces the amount of money your team spends on carbonated water. Banning plastic bottles in the office might be extreme to many, so providing encouragement rather than prohibition, may also reduce the amount of plastic bottles consumed each day.
Offsetsetting your carbon footprint
A carbon offset (or carbon credit) is generated from an activity that prevents, reduces or removes greenhouse gas emissions from being released into the atmosphere to compensate for emissions occurring elsewhere. Carbon credits or offsets are typically measured in tonnes with one offset unit equalling one tonne of carbon dioxide equivalent. Offsets can be generated from projects such as renewable energy (preventing emissions from burning coal or gas) or waste gas recovery (preventing emissions from methane released from landfills).
There are a range of ways that can offset your carbon footprint. The most popular way seems to be the planting of trees. The cost of offsetting a tonne of carbon ranges between around $20-$30 per tonne, depending on the form of offset and the location. You can offset for cheaper in some countries such as India, though it can be difficult to get the certification that your carbon assessor will accept.
Luminary has offset its carbon footprint through tree planting in the Yarra Yarra Biodiversity Corridor in Western Australia's northern agricultural region, approximately 400km north of Perth, and carbon sequestration at Bimbadeen Farm on Phillip Island. This was an area that was cleared many years ago and with the contributions of many organisations and volunteers over the years, the area continues to transform and regenerate.
Carbon offsets in the Yarra Yarra Biodiversity Corridor are legally protected by 100 year Carbon Right and Carbon Covenant registered on the land titles. The trees your business plants will likely outlast the business, providing an enduring legacy for you and your company.
In total, Luminary has planted over 5000 trees through official carbon offset programs and our own tree plantings with the team in Melbourne and Bali.
Luminary has offset three financial years of its twenty one years of operation. Investing in offsetting the previous 18 years is currently beyond the budget, though could be a long term goal.
Lifetime carbon neutral
Microsoft has vowed to offset all of the carbon emissions created by its business since inception. This is an extraordinary undertaking when you consider the size and scale of its impact.
If your business is only a few years old, it may be worth seeing if you can calculate the total amount of carbon created during the lifespan of the business. This may be a difficult undertaking and if not possible, then consider taking the current year’s total which is likely to be more than the previous year’s and multiply by the amount of time you have been in business. You will need approval from the assessor and it is not clear whether this can be certified. However, paying to offset more carbon than you have likely used since the start of your business, means that you could confidently claim that you are carbon neutral for the life of the business.
Going carbon negative
You can also become carbon negative, if you offset more than your measured footprint (i.e. +5-10%) to have a net negative footprint. Adding 10 percent to the total cost of the carbon offsets is not that significant and as such, going negative is worth considering.
Next year, Luminary will seek to become carbon negative. We wanted to ensure that we had experience across three years and developed better reporting systems before aiming for our goal of carbon negative. We are now in a position to put our hand on our heart and say, we can very accurately track our carbon footprint and as such, become carbon negative in Year 4.
Here is a copy of our report for the 2020 financial year. We generated 136.53 tonnes of carbon dioxide. That is a lot. With around 15 trees planted for each tonne of carbon offset, we have invested in around 2055 trees for the 2020 financial year.
The process is a lot more involved than handing over your electricity bills. The first year that Luminary did the assessment it was quite involved as we were not tracking our data. Some factors were so involved that we changed systems or recording practices to ensure we did not have to crunch the data in the same way the next year.
Swapping all flights to a travel agent and all client visits and airport travel to Uber Business reduced the data gathering substantially. However I recommend that you ask your current or prospective travel agent (for when the borders open) if they can provide an export of trips in a given period of time.
Going carbon neutral is worth it. If you are reading this blog it is likely that you agree that the planet is warming and that this will impact us and future generations. With that context, anything we can do to reduce our impact helps stem the tide of climate change.
You might think ‘How can my business have an impact on the climate?’ It is a fair question. The answer is, it is already having an impact on climate change by producing carbon dioxide. So why not make the impact at least neutral?
We are not experts in carbon neutral certification, this article is our experience of the process. There are several companies that provide a carbon footprint assessment. Luminary engaged Carbon Neutral for the last three financial years to provide this service.
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