The power of a single action

Demand for sustainability is high, but until recently, the onus has been on the biggest polluters to drive change. But it’s essential to broaden attention to the role that all businesses can and must play in the journey to net-zero. 

Seventy one percent of consumers say they would pay more for brands that are sustainable, and 57% of consumers would change their shopping habits to reduce their environmental footprint (source: IBM). Research also increasingly shows that employees care about the conscience of the businesses they work for. KPMG’s 2020 The Business Case for Climate Change report states that "70% of employees are more likely to want to work for a company that has a strong green footprint". 

Cogo recently explored the role of directors of small and medium businesses in achieving net-zero, the challenges they are facing and how they can take small but meaningful steps towards a more positive carbon impact.

Compound impact

Small businesses make up 90% of business worldwide and affect the livelihoods of over 2 billion people. Their combined carbon footprint is estimated to contribute 60-70% of industrial pollution. But according to our recent survey of 600 directors and small business owners in New Zealand, Australia and the UK, only 40% have taken action to measure their carbon footprint and commit to reducing emissions.

So, why have the majority of these businesses not implemented decarbonisation strategies yet?

While most business owners and decision-makers were aware of the need for change, two out of three didn’t feel they had the knowledge or tools to implement meaningful change, or to have a significant impact. 

Directors were more likely to have taken steps to monitor and reduce their waste than their business’ carbon footprint, with 65% of respondents having taken steps to measure, reduce, reuse or recycle waste. When comparing regions, we discovered that UK businesses (41%) were more likely to have started their carbon reduction journey than businesses in Australia (32%) and New Zealand (32%).

Motivating factors

Cogo’s research revealed several motivating and demotivating factors for small businesses when it comes to taking climate action. These included: 

• Finance. Many directors of small businesses don’t believe they have the finances required to start their sustainability journey. 
• Regulation. Clearer guidance on upcoming regulations would help small businesses better prepare and take appropriate action. Large financial institutions that have already had to report on and reduce emissions could support small businesses in measuring, reporting, and reducing emissions.

• Awareness. It also became clear that most small businesses aren’t aware of the financing available to them. Many small businesses also don’t fully recognise the opportunity of taking action to measure and reduce carbon emissions. And what’s worse, many aren’t aware of the potential threats that climate change and market competition pose to their business. 
• Knowledge. Small businesses need help to improve their ability to measure, report and take action to reduce their carbon footprint in line with legislation and standards.

Some steps to start your journey

Considering these key motivators identified in the research, there is a definite gap between the significant impact businesses can have and their access to the knowledge and tools needed to take action. Perhaps the key then, is to start small, look inward and trust in the power of compounding positive actions. 

Tangible, realistic steps to a lower carbon footprint

You can only manage what you measure. The first and most important step to reduce your business’s carbon footprint is to know where you’re at. 

1. Measure 

Start by measuring your carbon footprint based on your everyday business activities (start with the biggest ones first, ie if you’re a taxi company, start with the vehicles you’re using). This way, you’ll know what you’re working with and which areas you need to prioritise. 

Once you know where you’re at, you can set a target in your financial year strategy to make sure you’re accountable. This will also ensure that your goals are realistic; you’ll probably not be able to be completely carbon neutral within a year, but small steps create habits and build a foundation to do more.

2. Reduce

Once you have the basics sorted, start looking at how you can offset your remaining carbon footprint, and collaborate with others to make this easier.

This is where the goal of being carbon neutral can become more attainable/realistic. If you find that there are no more options for reducing your carbon footprint, you can consider offsetting emissions. 

3. Lead the way

A key element of a carbon footprint reduction plan, as with any strategy, is continuous improvement. Your strategy should be dynamic and continue to reflect changes in your business environment, and you should be communicating these changes to your employees and customers, who will become advocates for your business sustainability efforts.

Continuous improvement and consistent carbon reductions and reporting will mean that you’ll be able to pursue a certification such as Toitū or BCorp. Then, it will be your role to lead and influence more change by encouraging customers, employees and competitors and looking for opportunities to collaborate to have an even bigger impact. 

Now is an ideal time for business decision-makers to cultivate a ‘collective mindset’; one that believes that when it comes to change, none of us is as powerful as all of us and the collective impact of small changes can be significant enough to change the world. 

Making sustainable choices is a game-changing strategy for businesses looking to differentiate themselves, in terms of attracting loyal customers and also to future-proof their business for the changing regulatory environment. 

About the author

Ben Gleisner is the Founder and Global CEO of Cogo. Cogo is a Sustainability Data Service company, which helps businesses and consumers to measure and improve their impact on people and the planet. We partner with banks, food retailers, online marketplaces, accounting platforms and more - to empower their customers to shape a fairer and more sustainable world.

Cogo is building a tool to help simplify this measurement for businesses in Australia and soon, New Zealand. If you’d like personalised, specific insights and actions, make sure you sign up here to be the first to know once we launch.

The views expressed in this article do not reflect the position of the IoD unless explicitly stated.

Contribute your perspectives and expertise on an area of governance to the IoD membership and governance community. Contact us mail@iod.org.nz