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How IT can help SMBs become net-carbon sinks

A practical guide for small and medium-sized businesses to reduce their carbon footprint and enhance their sustainability

Small and medium-sized businesses (SMBs) are the backbone of the global economy, accounting for more than 90% of all enterprises and employing more than 60% of the world’s workforce. However, they also face significant challenges in terms of environmental impact, as they are responsible for more than half of the global greenhouse gas emissions. According to the Intergovernmental Panel on Climate Change (IPCC), the world needs to reach net-zero emissions by 2050 to limit the global warming to 1.5°C and avoid the worst effects of climate change. This means that every sector, including SMBs, needs to take urgent and ambitious action to reduce their emissions and enhance their carbon sinks.

What is a Carbon Sink

A carbon sink is any process, natural or artificial, that removes more carbon dioxide from the atmosphere than it emits. Examples of natural carbon sinks are forests, oceans, and soils, while examples of artificial carbon sinks are carbon capture and storage (CCS) technologies, biochar, and enhanced weathering. We’re not suggesting you turn your business into a forest or an ocean, that would be ridiculous. A far more realistic goal would be to become what’s known as a net-carbon sink. A net-carbon sink is a system that achieves negative emissions, meaning that it removes more carbon dioxide than it emits over time.

A net-carbon sink business is one that achieves this goal by measuring, reducing, and offsetting its carbon footprint, while also enhancing its carbon sequestration potential.

In this blog, we will explore how everyday SMBs can transform their businesses into net-carbon sinks, by using information technology (IT) to help them achieve their emissions targets. We will discuss the benefits and challenges of becoming a net-carbon sink business, the steps and tools involved in the process, and some best practices and examples from different industries. We will also provide some recommendations and resources for SMBs who want to start or improve their journey towards net-zero emissions.

Benefits of becoming a net-carbon sink business

Becoming a net-carbon sink business is not only a moral duty and a social responsibility, but also a strategic opportunity and a competitive advantage for SMBs. Some of the benefits of becoming a net-carbon sink business are:

Reducing operational costs and increasing efficiency: By using IT to monitor and optimise their energy consumption, waste management, and logistic SMBs can save money and resources, while also reducing their emissions. For example, a study by the Carbon Trust found that SMBs can save up to 20% on their energy bills by implementing simple energy efficiency measures, such as switching to LED lighting, installing smart meters, and using cloud computing.
Enhancing brand reputation and customer loyalty: By communicating their sustainability efforts and achievements, SMBs can attract and retain customers who are increasingly conscious of the environmental impact of their purchases. According to a survey by Nielsen, 66% of global consumers are willing to pay more for products and services from companies that are committed to positive social and environmental impact, and 81% of millennials expect their favourite brands to make public declarations of their corporate citizenship.
Accessing new markets and opportunities: By aligning their business models and products with the global sustainability goals and the low-carbon transition, SMBs can tap into new and growing markets, such as renewable energy, green finance, circular economy, and carbon credits. For example, a report by the International Finance Corporation (IFC) estimated that the Paris Agreement could create $23 trillion of opportunities for climate-smart investments in emerging markets by 2030.
Innovating and differentiating: By using IT to enable and support their innovation processes, SMBs can develop new and improved products and services that offer environmental and social value, while also creating a unique selling proposition and a competitive edge. For example, a study by the European Commission found that eco-innovation can increase the turnover of SMBs by 15%, and that 45% of eco-innovators introduce products or services that are new to the market.

Challenges of becoming a net-carbon sink business

However, becoming a net-carbon sink business also entails some challenges and barriers for SMBs. Time and resources aren’t quite the same as massive conglomerates, so care is needed. Some of these are:

Lack of awareness and knowledge: Many SMBs are not aware of the importance and urgency of reducing their emissions and enhancing their carbon sinks, or of the benefits and opportunities that come with it. They may also lack the technical and managerial skills and knowledge to implement and measure their sustainability actions and impacts. For example, a survey by the Federation of Small Businesses (FSB) found that only 13% of UK SMBs have measured their carbon footprint, and that 76% of them do not have a green policy or plan.
Lack of resources and support: Many SMBs face financial and human resource constraints that limit their ability and willingness to invest in sustainability initiatives and technologies. They may also lack access to adequate and affordable financing, incentives, and support schemes that can help them overcome the initial costs and risks of becoming a net-carbon sink business. For example, a report by the Organisation for Economic Co-operation and Development (OECD) found that access to finance is the most cited obstacle for green growth by SMBs, and that only 18% of them receive public financial support for environmental purposes.
Lack of standards and regulations: Many SMBs operate in markets and sectors that do not have clear and consistent standards and regulations for measuring and reporting their emissions and carbon sinks, or for verifying and certifying their net-zero claims. They may also face uncertainty and complexity in complying with the existing and evolving environmental policies and legislation at the local, national, and international levels. For example, a study by the World Business Council for Sustainable Development (WBCSD) found that there is no universally agreed definition or framework for net-zero emissions, and that there are over 120 different net-zero initiatives and platforms across the world.

Steps and tools for becoming a net-carbon sink business

To overcome these challenges and leverage these benefits, SMBs need to follow a systematic approach to become net-carbon sink businesses, by using IT as an enabler and a facilitator. The following are some of the steps and tools that SMBs can use to achieve this goal:

Measure and report: The first step for SMBs is to measure and report their current emissions and carbon sinks, using IT tools such as carbon calculators, accounting software, and online platforms. These tools can help SMBs to collect and analyse data on their energy use, waste generation, transportation, and other sources of emissions, as well as on their carbon sequestration potential, such as their land use, forestry, and agriculture. By measuring and reporting their emissions and carbon sinks, SMBs can establish a baseline, identify their hotspots, set their targets, and track their progress.
Reduce and optimize: The second step for SMBs is to reduce and optimize their emissions and carbon sinks, using IT tools such as energy management systems, smart devices, and artificial intelligence. These tools can help SMBs to monitor and control their energy consumption, waste management, and logistics, as well as to optimize their processes, operations, and products. By reducing and optimizing their emissions and carbon sinks, SMBs can improve their efficiency, productivity, and profitability, while also minimizing their environmental impact.

Offset and enhance: The third step for SMBs is to offset and enhance their emissions and carbon sinks, using IT tools such as carbon markets, blockchain, and digital platforms. These tools can help SMBs to purchase and sell carbon credits, verify, and certify their net-zero claims, and access and share best practices and resources. By offsetting and enhancing their emissions and carbon sinks, SMBs can compensate for their residual emissions, increase their carbon sequestration potential, and demonstrate their leadership and commitment to sustainability.

Best practices and examples from different industries

To illustrate how SMBs can use IT to become net-carbon sink businesses, we will provide some best practices and examples from different industries, such as:

Retail: A retail SMB can use IT to measure and report its emissions and carbon sinks, by using online platforms such as the SME Climate Hub, which provides free tools and guidance for SMBs to commit to halving their emissions by 2030 and reaching net-zero by 2050. A retail SMB can also use IT to reduce and optimize its emissions and carbon sinks, by using smart devices such as the Nest Thermostat, which learns the preferences and habits of the users and adjusts the temperature accordingly, saving up to 15% on heating and cooling bills. A retail SMB can also use IT to offset and enhance its emissions and carbon sinks, by using digital platforms such as Shopify, which enables merchants to purchase carbon offsets for their deliveries, and to offer carbon-neutral shipping options to their customers.
Manufacturing: A manufacturing SMB can use IT to measure and report its emissions and carbon sinks, by using carbon calculators such as the Carbon Footprint Calculator, which allows SMBs to calculate their emissions from various sources, such as electricity, gas, vehicles, flights, and materials. A manufacturing SMB can also use IT to reduce and optimize its emissions and carbon sinks, by using energy management systems such as the Eniscope, which monitors and analyses the energy consumption of the machines and equipment, and provides real-time feedback and alerts to reduce wastage and improve efficiency. A manufacturing SMB can also use IT to offset and enhance its emissions and carbon sinks, by using blockchain technology such as the Poseidon Foundation, which connects consumers and producers of carbon credits, and enables transparent and traceable transactions of carbon offsets.
Services: A service SMB can use IT to measure and report its emissions and carbon sinks, by using accounting software such as QuickBooks, which integrates with third-party apps and services, such as MileIQ and Expensify, to track and record the emissions from the travel and expenses of the employees and clients. A service SMB can also use IT to reduce and optimize its emissions, by using artificial intelligence such as the Carbon Intelligence, which uses machine learning and data analytics to provide insights and recommendations on how to reduce the carbon footprint of the business, and to automate and optimize the sustainability actions and impacts. A service SMB can also use IT to offset its emissions and enhance carbon sinks, by using online platforms such as the Climate Neutral, which certifies businesses that have measured, reduced, and offset their emissions, and provides them with a label and a badge to showcase their net-zero status.

Recommendations and resources for SMBs

To conclude, we have seen how everyday SMBs can transform their businesses into net-carbon sinks, by using IT to help them achieve their emissions targets. We have discussed the benefits and challenges of becoming a net-carbon sink business, the steps and tools involved in the process, and some best practices and examples from different industries. To help SMBs start or improve their journey towards net-zero emissions, we provide the following recommendations and resources:

Join and participate in the Race to Zero campaign, which is a global initiative that mobilizes businesses, cities, regions, and investors to achieve net-zero emissions by 2050 at the latest. The campaign provides a platform for SMBs to showcase their leadership and ambition, and to access support and guidance from the UN and other partners.
Use and follow the SME Climate Tool, which is a free online tool that helps SMBs to measure, reduce, and offset their emissions, and to report and communicate their net-zero commitments and actions. The tool provides a step-by-step guide and a dashboard for SMBs to manage and monitor their carbon footprint and their progress towards net-zero.
Explore and learn from the Net Zero Carbon programme, which is a global programme that supports and recognizes SMBs that have achieved net-zero emissions, or are on track to do so. The programme provides a framework and a methodology for SMBs to measure, reduce, and offset their emissions, and to verify and certify their net-zero claims.

Our final tip: Call us or fill in a contact form today to talk to one of our green IT advisers. We have a wealth of tools and information available about services that can help you do your bit for the planet. IT is an area which is normally ignored in favour of larger, sexier projects in carbon offsetting, yet it’s an area you can save a lot of money and emissions by optimising.