How to ride the low-carbon wave and get ahead

OPINION: Twelve years ago, when I first entered the sustainability sector, reducing carbon emissions meant little to Kiwi businesses. Thankfully, the situation has changed dramatically in recent years, as new legislation has been introduced requiring large corporations to report carbon emissions – meaning they now often have an internal role dedicated to driving organisational sustainability.

While small and medium-sized enterprises (SMEs) are currently operating in a voluntary market, the pressure is mounting. For example, by mid-2023, all New Zealand schools will have their carbon footprints reported as part of the Government’s carbon-neutral programme – and it’s expected this reporting will soon become a license to operate.

SMEs that aren’t prepared risk being left behind, but the good news is that business owners often possess a unique and intimate knowledge which can help them initiate immediate (and impactful) change.

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Beyond the obvious environmental benefits, there are three key reasons why SMEs should actively reduce their carbon emissions.

Firstly, there are often significant savings to be had. When we measure carbon footprints, we consider areas such as travel, waste and energy usage – common sources of both emissions and costs for most SMEs. While optimising these areas may require some initial investment, it will often result in cost reduction in the long term.

Secondly, we know our future generations want to work for and buy from organisations that align with their values. According to the Colmar Brunton Better Futures 2020 report, 72 per cent of Kiwi youth say it’s “important that my future employer is socially and environmentally responsible”. By making carbon reduction efforts known, SMEs are better placed to attract and retain good talent – which is crucial in any business, small or large.

Thirdly, it helps future-proof the business against competitors. Only a small percentage of businesses in New Zealand have solid environmental credentials. In a world where consumers, suppliers and councils are already beginning to ask for carbon certification as part of their decision-making process, SMEs can use this to stand out amongst their competitors.

What can smaller businesses achieve?

Businesses have a few choices when it comes to the level of commitment and resource dedicated to reducing their carbon footprint. At an entry, and most common level, is actively measuring, reducing and auditing the carbon footprint of your whole business.

For businesses ready to go a bit further, you can then offset any remaining impacts by purchasing carbon credits to be carbon-neutral. New Zealand native forest regeneration credits have already risen from NZ$5 in 2012 to now NZ$55 a tonne and could likely rise even beyond NZ$250 a tonne by 2050. With the price of carbon becoming more expensive, and mandatory reporting on the horizon, SMEs will want to reduce their footprint as much as possible first.

As carbon-zero becomes mainstream, we’re seeing a new level of climate ambition, which is allowing businesses to really demonstrate their commitment to sustainability – via investment in projects and offsetting more than their own footprint, which ultimately generates a climate positive outcome.

In our local area of Parnell, we’ve seen several larger organisations get ahead of the low-carbon wave, including the Auckland District Health Board and Auckland War Memorial Museum, which have been measuring and reducing for several years already.

Meanwhile, leading the way for smaller businesses are tourism company House of Travel Auckland City, commercial property owner Samson, cleaning product manufacturer Ecostore and building consulting firm Rubix – all having reached an impressive carbon-zero status, perhaps proving that SMEs can reach these levels more easily than their larger peers.

Getting started

For SMEs starting out, it’s important to remember: you can’t manage what you haven’t measured. Take stock by reviewing monthly invoices, freight costs and transport figures. This can help identify problems not only relating to carbon emissions, but also flaws in internal operations.

Make use of the numerous free resources available online – the Sustainable Business Network’s climate resources and Action Toolkit, guidelines from the Ministry for the Environment and Sustainable Business Council, Gen Less tools and Toitū calculators.

Keep an eye out for workshops in your local area. We’ve been encouraged by engagement from local SME owners in a series of sustainability webinars facilitated by the Parnell Business Association. Cheryl Adamson, general manager of the association says that for a precinct and its businesses to thrive in the future, SME owners must recognise the need for knowledge gaps to be filled and act on it early. Often, they don’t know where to start and a few practical tips can get them on their way.

No matter where you are on the journey, feel free to talk to the experts, including Toitū, Sustainable Business Network and Sustainable Business Council. Experts can provide best-practice recommendations to create the biggest impact, and are experienced in supporting businesses – small and large – to achieve their goals. They are also great at connecting you with likeminded businesses.

It’s not just the large corporations that need to do their part – businesses of all shapes and sizes have the power to be agents of change. Most importantly, SMEs that ignore opportunities to reduce their carbon footprint now may soon find themselves in an unfavourable position. The low-carbon wave is coming thick and fast, it’s up to businesses to sink or swim.

Josephine Rudkin-Binks is a sustainability consultant and a board member of the Parnell Business Association.