Circular Economy

A Path for Small Businesses to Achieve Climate Neutrality

The climate crisis is waiting for no one; and the choices we make over the next few years will determine the world we create for ourselves and for future generations. We can and must succeed — and SMEs have a critical role in ensuring that we do.

Brand Provided | By Jonathan Hanwit | Published 3 years ago | About a 5 minute read

While much of the climate crisis conversation has focused on large corporations, avoiding the worst impacts of the climate crisis will require the participation of businesses of all sizes — and small and medium-sized enterprises (SMEs), in particular.

Many don’t realize that most businesses in the United States are small ones; the more than 30 million SMEs comprise 99.9 percent of all businesses in the country. These businesses employ nearly 59 million people, or nearly half (47.5 percent) of the US’ total employee workforce.

Small businesses aren’t just “mom and pop” operations, either. The US Small Business Administration defines a small business as one with operations with up to $7 million in revenue or 500 employees, depending on industry. Granted, though SMEs individually tend to have smaller carbon footprints than their larger counterparts, collectively they can have a major positive impact on the global effort to address the climate crisis.

As a SME that works with major corporations, thinkPARALLAX wanted to find a way to do our part to more directly address the climate crisis — which led us to pursue Climate Neutral Certification. With thinkPARALLAX having earned Climate Neutral Certification for two years in a row, we’ve learned a thing or two about the process.

Climate Neutral 101

Developed by the non-profit Climate Neutral, this label makes it possible for consumers to choose brands that have measured, offset, and implemented plans to reduce the greenhouse gases they generate by making and delivering products and services.

To earn this designation, companies must offset and reduce all direct and indirect carbon emissions. While this is not just for SMEs — brands including Allbirds, REI, Numi Tea and Klean Kanteen have earned the certification — it is a particularly powerful way for smaller companies to address the climate crisis. To date, over 200 brands have achieved Climate Neutral Certification and have measured and offset 546,715 tons of carbon — the equivalent of eliminating 1,265,761 barrels of oil.

Measuring your footprint

By now, you’ve likely heard the saying “you can’t manage what you can’t measure.” That’s why the first step of Climate Neutral Certification involves measuring your company’s Scope 1, 2 and 3 emissions. Because measuring a business’s carbon footprint can be expensive and time-consuming, Climate Neutral developed the Brand Emissions Estimator — an in-house carbon footprinting software now used by over 200 companies. The organization is looking to make this software open-source to give SMEs a straightforward way to measure and manage their footprints.

Offsetting your emissions

Once you’ve measured your company’s emissions, the second step in the Climate Neutral Certification process is to offset those emissions by purchasing carbon credits that invest in climate solutions — such as clean energy and reforestation. While carbon offsets aren’t a perfect climate solution, they still are a powerful decarbonization tool for addressing unavoidable emissions. Most companies are able to offset their emissions using an average of only 0.4 percent of revenues.

As a professional services company, thinkPARALLAX has a relatively low carbon footprint. Before the pandemic, our employees worked from home two out of five days each week to reduce commute-based emissions, and we gave our employees a public transportation stipend to encourage climate-friendly travel options. Now that our team is completely remote, our commute footprint has been essentially reduced to zero. To offset the remaining emissions produced by our team’s online activity and energy demands of our office, we purchase carbon credits that invest in climate-positive assets such as forests, water and renewable energy.

Making an action plan

No business is perfectly sustainable and there will always be room for improvement. The third and final step is to create a reduction action plan to outline how your company will continue to reduce its emissions over the next few years.

The many paths to Climate Neutral certification allow for creativity and flexibility in meeting your company’s climate goals. Allbirds’ reduction action plan includes switching to SweetFoam™ — a renewable, sugarcane-based material — in all of its products. Numi Tea will plant 5,000 trees across its tea gardens to enhance carbon sequestration across its operations. And Klean Kanteen is reducing its emissions through more sustainable packaging. When it comes to achieving climate neutrality, there’s no one-size-fits-all approach — which is part of the challenge, but also part of the fun.

Benefits of being Climate Neutral Certified

By becoming Climate Neutral Certified, SMEs are helping cool the planet by eliminating their carbon footprint and investing in climate solutions that will both increase global uptake of carbon and catalyze the transition to a clean energy economy. Beyond environmental benefits, Climate Neutral certification can also help your company engage employees and recruit top talent: 83 percent of workers surveyed last year said that they wished their workplaces would do more to address climate change, and research shows that three out of four millennials would take a pay cut to work for a purpose-driven company.

Studies have also shown that two-thirds of consumers are willing to pay more for products and services from companies with a positive social and environmental impact. The Climate Neutral label signals to customers that a brand is dedicated to addressing climate change.

The climate crisis is waiting for no one, and the choices we make over the next few years will determine the world we create for ourselves and for future generations. While success means enjoying a future that is healthier, safer, and more prosperous for all, failure will bring about the opposite outcomes. We can and must succeed — and SMEs have a critical role in ensuring that we do. Climate Neutral Certification is a powerful tool to help us get there.