6 Steps to Reduce Carbon Footprint for SMEs and Businesses

February 24, 20220

Businesses are being pushed to set greenhouse gas (GHG) emission and carbon footprint reduction targets. Currently, there is a particular focus on corporate companies, leaving small and mid-sized enterprises (SMEs) behind to fend for themselves. However, as SMEs make up 99.9% of businesses within the UK, it is crucial that they find the necessary support to lower GHG emissions. With rising energy costs, along with customer demand for sustainable products and services, now is the ideal time to consider setting a climate goal for your business. From installing onsite renewable energy generation to switching to re-useable packaging, there are hundreds of ways to reduce carbon footprint and lower emissions.

Focusing on eliminating your organisations’ Scope 2 GHG emissions (emissions from electricity, heating and cooling that is used by the business) can be a good place to start. Here are some of OnGen’s tips for reducing Scope 2 emissions through monitoring energy usage, improving energy efficiency, installing onsite renewable energy technologies, switching to a green supplier and setting up a corporate power purchase agreement. 


1- Be aware of your Scope 2 emissions 

To set a realistic goal for reducing GHG emissions, it is important to be aware of the Scope 2 emissions that are currently attributed to the energy supply. GHG reporting is a great place to start. Scope 2 emissions are easy to calculate, as they relate to emissions from purchased energy. Simply compile your SME’s energy consumption by considering electricity, heat, steam and cooling consumed onsite, which can be provided by your supplier. These values can be converted into carbon and other GHG emissions by using the UK Government’s Greenhouse gas reporting: conversion factors 2021

Have a look at our guide to calculating carbon emissions.


2- Monitor your energy usage

Ultimately, as an SME, the best way to reduce Scope 2 emissions is to lower your energy consumption. Installing an energy monitor or smart meter in your business properties is a great start. This device will monitor your electricity and gas consumption, therefore, highlighting periods when there is a high and perhaps unnecessary energy consumption. 

A smart meter can be installed for free. Most energy suppliers offer free smart meter installations for businesses.

There is also a range of energy monitoring software solutions that monitor and optimise your consumption to find the best energy usage pattern for buildings looking to reduce their energy consumption. 

For example, do you need the full office space heated to 21 degrees Celsius if all your employees are working from home on a Friday? Being creative with your energy usage could help you reduce your energy consumption, thus saving money and carbon emissions. 


3- Make the building more energy efficient 

Commercial buildings across the UK waste thousands of kilowatts of energy per year because of poor energy efficiency. Small changes to a building’s energy efficiency will help slash the energy usage at each property, therefore reducing GHG emissions along with reducing the cost of energy bills. By making a building more energy efficient, the EPC rating, which is required to be graded at an A or B by 2030 in England and Wales, will improve too. 

There are lots of simple steps to make SMEs more energy efficient, including installing LED lightbulbs and fitting building insulation. Energy efficiency improvements often have a shorter payback than other carbon emissions saving methods, making them a great decision for businesses with a small budget. Furthermore, many energy efficiency changes are easy to implement in rented spaces. There are multiple funding opportunities for implementing energy efficiency upgrades, including an interest-free energy efficiency loan of up to £100,000 for SMEs in Scotland. 

If your SME already has had an EPC assessment for your properties, OnGen’s software, OnEfficiency, is a great fit for finding suitable energy improvements and building a business case for funding across your building portfolio.

(Image source: RachelW1, 2021)


4- Install onsite renewable energy generation 

Once you’ve reduced your SME’s energy consumption, the next step is to swap your grid-supplied energy for onsite renewable energy generation. Onsite renewable energy generation allows your organisation to benefit from green energy, drastically lowering carbon emissions. Generating electricity and heat onsite can also result in high cost-savings due to it being cheaper to generate renewable energy over a long period than to purchase energy directly from the grid. Generated energy is cheaper due to not having to pay non-commodity costs such as the Climate Change Levy which make up a significant contribution of energy bills. Onsite generation technologies also give your business resilience against sharp changes in grid-supplied energy costs.

With there being such a large variety of renewable technologies currently available, from roof mounted solar to air source heat, there will be an onsite renewable technology that is suited for your SME’s properties. Onsite renewable technologies can be installed across a large range of buildings and if the property is rented, negotiations with landlords can often allow for onsite renewables to be installed.  

Again, there are many funding options for SMEs when it comes to installing onsite renewable energy technologies. One option for SMEs in the North Tyneside area is the Green New Deal Fund, where up to 50% of the capital cost of the green project is funded.

Not sure where to start? OnGen offers a software called the OnGen ExpertTM, which assesses buildings for the potential of onsite renewable energy generation. This software assesses 10 different technology options and considers the practical and financial feasibility of each technology. This software is perfect for building a business case for installing onsite renewables at your business properties. 

Roof mounted solar installation


5- Switch to a green energy supplier

Installed onsite renewable generation may not meet the total required energy demand for SMEs, meaning that some energy would still be required to be purchased from an energy supplier. The good news is that there are now many green energy suppliers that supply electricity generated from green renewable sources such as the wind or sun. By choosing a green, renewable energy supplier, the scope 2 GHG emissions of the supply are zero. However, scope 3 carbon emissions relating to the distribution and transmission network are still accountable, but these are a small fraction of normal emissions.

Choosing a green energy supplier can be an easy option to quickly lower your Scope 2 emissions. This is especially true if you are an SME in rented property without the direct authority to make an investment in onsite renewables and energy efficiency measures.

Green electricity

When choosing a green renewable energy supplier, it is important to switch to a truly green energy supplier. Many Renewable Energy Generation Origin (REGO) certified energy suppliers shockingly do not supply truly green energy. For example, energy suppliers can purchase REGO certificates to claim they are providing renewable energy without having to prove the source of electricity. Therefore, the electricity claiming to be green can be generated by fossil fuels. It is best to do your research and pick an energy supplier that genuinely provides renewable energy such as Octopus Energy or Good Energy. More information about electricity greenwashing can be found here.

Green gas

Currently, choosing a green gas supplier is not as easy as switching to green electricity. Natural gas is still the dominant fuel for heating due to the decarbonisation of the gas grid moving at a slower pace than electricity. There are plans for hydrogen to become more popular on the gas grid, along with biomethane. Biomethane is produced by anaerobic digestion, resulting in this gas source being carbon neutral. Providers of biomethane can be certified by the Green Gas Certification Scheme. However, most of the gas provided to heat your SME at present is natural gas. It is possible to choose an energy supplier that offsets the emissions released from natural gas, or switch to Green Energy UK who are the only 100% biomethane provider in the UK.

Switching to electric heating if you are on a green electric tariff could be another option to reduce Scope 2 emissions generated by heat. However, electric heating can be expensive to install and operate in comparison to central heating.  

Getting a good deal when switching to a green energy supplier can be made simple by using OnSupply. This digital tool facilitates a reverse auction with energy providers, allowing your SME to get the cheapest green energy contract available.


6- Set up a corporate power purchase agreement

Some SMEs may wish to know the exact location of its green energy, to help add tangibility to its green energy source. For example, knowing the specific wind or solar farm that is supplying energy to the SME. If this is the case, then purchasing energy from a corporate power purchase agreement (CPPA) could be a good fit for sourcing green energy.

The CPPA is set-up between a renewable energy producer and a business, resulting in the business purchasing energy from a generator at the source rather than from an energy supplier.  Therefore, an SME can pin-point their energy generation to the solar or wind farm that the CPPA is arranged with. There are different types of CPPAs, including private wire and indirect, allowing for at least one option to be suited for your SME. A CPPA will often have a fixed price for +5 years. The fixed price may not be ideal for SMEs that do not wish to be in a long-term contract. However, a long-term contract can provide security from volatile energy markets. 

If a CPPA is of interest to your business, then an energy broker should be able to help set the CPPA up. 

What are you waiting for? Today is the day to start working towards achieving net-zero Scope 2 emissions. Get in contact with the OnGen team to discover your best green business strategy. 

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