Understand your business emissions
Most businesses need to make significant changes to get on a path to net zero. You can take some actions right away for no or low cost while others take long term planning.
Many large retailers are committed to the British Retail Consortium’s Roadmap to reach net zero by 2040.
This pathway has target dates for priority actions, starting with reducing direct business emissions. Logistics and supply chain emissions come later.
Important milestones on this pathway include:
- use 100% renewable electricity
- use 100% zero carbon light commercial vehicles
- use 100% zero carbon last mile logistics
- use 100% zero carbon heavy goods vehicles
- use 100% LED lighting in buildings
- use 100% low-impact refrigerants
- net zero for all retail products and services sold in the UK
Future regulations and legal changes
While small businesses are not currently required by law to report or reduce emissions, a growing number of government regulations will affect retail operations.
- 2022 – Plastic Packaging Tax
- 2022 – Future Buildings Standard
- 2025 – full Future Buildings Standard comes into effect
- 2030 – no new sales of petrol and diesel cars and vans
- 2035 – zero emissions for all new cars and vans
Measure your emissions
Most retail emissions come from the products you sell.
Direct carbon emissions produced in the retail and sales industry also include:
- energy use – electricity and gas for lighting, heating and office equipment
- information technology – creating and storing digital information
- general waste – when it is not recycled and ends up at landfill sites
- transport – using petrol or diesel vehicles to deliver products and services
According to industry estimates the carbon required to make, ship, use and dispose of products accounts for 75% of total retail emissions.
The remaining 25% is created directly from business activities such as powering company vehicles and buildings.
Start with calculating direct emissions
Measuring the carbon footprint of your business activities is an important starting point. These are known as ‘Scope 1’ and ‘Scope 2’ emissions.
To get started:
- Choose a ‘base year’ as a reference point, usually the last complete calendar or fiscal year for your business.
- Collect 12 months of usage data on electricity, gas, fuel and refrigerants.
- Input numbers into a free carbon calculator to work out your business’s carbon footprint. This is measured in tonnes, over a year.
This will give you the amount of emissions created per year in kgCO2e – a measure of carbon dioxide and equivalent gases that contribute to global warming.
Add product emissions
For a complete accounting of your carbon footprint you need to calculate emissions created by the products you sell and add them to the kgCO2e from your business activities.
To do this you need to know how much carbon it takes to make, ship, use and dispose of your retail products. These are known as ‘Scope 3’ emissions. This category also includes carbon from activities like commuting, leased assets and investments.
Use the Greenhouse Gas Protocol’s Scope 3 calculator to get started. This helps estimate Scope 3 emissions based on the amount and types of products you sell each year.
You will need information such as the total weight of products and their material composition. Download the Greenhouse Gas Protocol’s ‘Technical guidance for calculating Scope 3 emissions’ to find out what data you need to get started(PDF).
Create a pathway to net zero
Once you have an idea of yearly emissions you need a plan to reduce them.
Net zero by 2050 is the latest date to avoid the worst effects of climate change, so it makes sense to set an earlier target if possible.
Start with your ‘base year’ emissions and make a plan to cut them in half. Year over year reductions compound so you would need a:
- 7% yearly reduction to halve emissions over 10 years
- 13% yearly reduction to halve emissions over 5 years
- 21% yearly reduction to halve emissions over 3 years
In this way you can make successive plans to halve emissions and approach net zero by a target date before 2050.
If you make the SME Climate Commitment you get access to a customised tool for tracking and measuring your carbon. You need to commit to halving your emissions by 2030 and reaching net zero by 2050.
Sharing your progress will help employees and customers feel confident that you’re reducing carbon and moving towards net zero.
Find funding and support
You can get detailed advice and a net zero roadmap from the British Retail Consortium website.
The British Independent Retailers Association (BIRA) also offers guidance on sustainability.
BRC’s Climate Action Roadmap Showcase focuses on the reduction of carbon emissions, the advancement of sustainability objectives (such as reducing waste or improving recycling), and the improvement in the impact retail and sales firms have on nature.
You can also learn how to run your business in a more environmentally friendly way by hiring a sustainability consultant.
Sign up for Green Street
If you become a ‘Green Street pioneer’ you also get access to:
- the latest research on customer behaviour
- free workshops from leading retailers
- network with other local retail businesses
Join the BIRA buying group
The British Independent Retailers Association (BIRA) runs a buying group that helps members get better deals from suppliers. It can help you source green products and work with more sustainable suppliers.
Follow the retail roadmap to net zero
The British Retail Consortium (BRC) has published a detailed Climate Action Roadmap that sets binding targets to reach net zero total emissions in retail by 2040.
BRC members can commit to meet the targets set out in the roadmap. You need to be able to measure your annual emissions and submit a report to the BRC. Contact firstname.lastname@example.org to find out more.
There are a growing number of support programs to help retail SMEs transition to lower carbon operations.
UK Research and Innovation (UKRI) provides funding for developing innovative products, processes or services in the retail industry.
Ask your bank about green financing. A growing number of banks offer green loans and other products designed to reduce carbon.
Find funding programmes in your UK region. Most provide matching funds or free expertise for energy efficiency upgrades, conversion to renewables or the development of green business products.
These support schemes and networks are available in Yorkshire and the Humber:
- Enterprising Barnsley gives information on these approved new UK Shared Prosperity Funding (UKSPF) projects: Business Productivity and Digitisation Grant, Low Carbon Grant Project, The Launchpad Project (for SME’s that have been trading for less than three years and for micro businesses with 10 staff members or less of any age). You can also find information on the Barnsley Rural & Visitor Economy (capital) Grant Project to support those rural areas that often face specific challenges, specifically lower productivity rates.
- Green Port Hull gives SMEs a minimum of £10,000 to businesses in the low carbon and renewable sectors – must be located in Hull or the East Riding of Yorkshire
- Business support sustainability Free advice, consultancy and grant funding to help SMEs achieve net zero and prepare for the impacts of climate change. SMEs of up to 100 employees in West Yorkshire (Bradford, Calderdale, Kirklees, Leeds, Wakefield) are eligible for this support.
Start by reducing your direct emissions
It often makes sense to start by reducing the carbon your business creates directly through powering buildings, equipment and transport.
In many cases there are no or low cost options that quickly pay back upfront costs. Government grants and schemes are also available to help.
1 Use less energy to heat and cool buildings
If you own your place of business (or have permission from the owner) there are several ways you can make energy efficiency improvements that reduce emissions.
According to the Energy Saving Trust the average SME can reduce its energy bill from 18 to 25% with efficiency measures and behavioural changes.
It makes sense to look at your heating, ventilation and cooling (HVAC) systems first. These account for 40 percent of an average SME’s total energy bill.
Measures range from setting temperatures lower and sealing draughts to investing in new insulation and equipment such as heat pumps.
Visit our ‘Save on HVAC costs’ page for detailed guidance.
2 Improve lighting
Lighting accounts for 14% of the average energy bill for commercial buildings. This amount can often be reduced through low cost upgrades, maintenance and using natural light.
In retail lighting is particularly important to create a positive customer experience. Measures such as replacing older bulbs with LEDs and maximising natural light can bring commercial benefits aside from energy savings.
Visit our ‘Save on lighting’ page for detailed guidance.
3 Make sure equipment runs efficiently
While the amount and type of equipment varies between retail businesses, it makes sense to check whatever machines you have are running efficiently.
This is particularly true if you have energy intensive equipment such as refrigerators or anything mechanical powered by motors and compressors.
Simple tips like installing PVC curtains over open display refrigerators or freezers can make a significant difference without harming customer experience.
Replacing older equipment, checking for leaks and doing regular maintenance can also make a big difference.
Visit our production and cold storage section for detailed guidance.
4 Switch to a green energy supplier
The fastest way to decarbonise the electricity your business consumes is to switch to a certified green energy supplier. Green energy rates can now match traditional ones.
If you’re nearing the end of your business energy deal or you can switch deals without penalty, it makes sense to look into what’s available.
Visit our ‘Find a green energy supplier’ page for detailed guidance.
5 Produce your own energy
If you’re producing your own energy, long-term savings usually make up the upfront installation costs over time.
You can apply for a grant toward a heat pump or biomass boiler if you:
- own your home or small non-domestic building
- have an Energy Performance Certificate showing adequate insulation
- are located in England or Wales
You can get a business rate exemption for eligible equipment used in onsite renewable energy generation and storage.
According to the Spring Statement you must be located in England and purchase:
- solar panels, heat pumps or other onsite renewable technology
- energy from low-carbon heat networks
Go to our renewables page for more advice and to find grants, loans and tax benefits to help with upfront costs.
6 Switch to electric vehicles
There is a growing range of zero or low emission electric vehicles (EVs) you can buy, rent or lease. Compared to petrol and diesel vehicles they have lower running and repair bills, and discounts are available to reduce upfront costs.
If you have a company vehicle or fleet, switching off petrol is one of the highest impact actions you can take to reduce direct emissions. You can also look for delivery services that use battery powered e-cycles or vehicles.
Go to our ‘Plan for switching to electric vehicles and e-cycles’ page for more advice and to find grants and other financial benefits.
Reduce supply chain and customer emissions
Most retail emissions come from sources ‘upstream’ and ‘downstream’ of your business.
They can also be challenging to reduce because they are outside your business operations and come from assets you don’t own or directly control.
Yet as suppliers and customers reduce their carbon footprints, there are more options for retailers to offer lower carbon products and ways of shopping.
The British Retail Consortium has a guide to monitor, measure and reduce supply chain emissions (PDF).
The 1.5C Business Playbook also has a chapter on reducing value chain emissions (PDF).
1 Sell lower carbon products
It’s important to know which products create the most carbon and start there. This is easiest if you work with a supplier that can provide emissions data.
After you figure out which products to target, you can:
- ask suppliers about lower carbon options for similar products
- look for small producers that have lower carbon production methods
- join a buying group that can help procure green products
Retail products can take less carbon to produce, use and dispose of if they:
- are transported shorter distances
- avoid carbon-intensive roadway transport
- are certified with sustainable standards such as the Forest Stewardship Council
- are made of recycled or reused materials
- have minimal packaging
Partnering with other retailers and suppliers who are committed to sustainability can also increase your influence and ability to reduce supply chain emissions.
2 Offer products that can be resold, rented or repaired
One of the fastest ways to reduce indirect emissions is to shift to ‘circular economy’ products that can be used by multiple customers.
This could involve offering:
- rentals for infrequently used products
- repair services
- resale programs for products that can be refurbished
It is estimated that less than 10 percent of the global economy is currently circular.
According to the Circularity Gap Report a shift to reuse could save up to 40 percent of the emissions caused by the creation and use of consumer products.
3 Use lower carbon logistics
Though logistics account for less than 10 percent of retail emissions, the desire to ‘buy local’ and reduce the distance products travel is a popular way consumers take climate action.
The type of transport used to move goods to retail outlets is also a factor. Sea, rail and even air freight are usually less impactful than traditional road transport. This could change in the future as HGVs and LGVs move toward cleaner fuels and electrification.
Retail SMEs can take action by encouraging suppliers to make deliveries in lower carbon ways, and using electric vehicles in their own fleets.
4 Subsidise low carbon commuting
Fuel used by employees and customers to get to your business is considered an external source of emissions. Reduce this by offering incentives to take public transit, use an EV, walk or cycle to your business.
This could include offering:
- electric vehicle (EV) charge points in your parking lot
- subsidies for employee transit passes
- change and shower facilities for employees who cycle
To reduce indirect or ‘supply chain’ emissions you need to consider what happens before and after your business provides a service or makes a product.
1) Choose greener ‘upstream’ suppliers and products
- use suppliers that measure and reduce carbon
- help your suppliers with carbon reduction projects
- buy products that take less energy to make, transport and operate
2) Reduce emissions ‘downstream’ of your business
- make products that take less energy to make, transport and operate
- reduce water consumption and waste disposal needs
- make investments in lower carbon financial products
- give incentives for lower emission activities in leased assets or franchises
3) Certify your supply chain action with PAS 2060
The standard process for PAS 2060 certification includes these steps:
- Measure greenhouse gas emissions (GHG) based on accurate data.
- Reduce of emissions through a carbon management plan.
- Document and verify through qualifying explanatory statements and make a public disclosure.
Through independent British Standards Institution (BSI) verification for PAS 2060, your business can demonstrate that it has met these requirements. You can show your business is environmentally friendly and contributing to the UN Sustainable Development Goals, while enhancing your organisation’s performance and resilience.
Share your progress
Sharing your progress will help employees and customers feel confident that you’re reducing carbon and moving towards net zero.
You should share your progress once you’ve done both of the following:
- worked out a benchmark of emissions
- started to take action