How to tell when a business is walking the walk on climate change

As we wade further into the new normal of a rapidly changing world, there’s no hiding from the climate emergency. Push or pull, carrot or stick, companies will have to take action. But how can we tell the heroes from the box tickers?

Using three great Greater Manchester companies I’ve gotten to know over the last few months as examples, here’s some observations I’ve made.

1. Offsetting is for closers

“Put that coffee down. Coffee is for closers only”. Alec Baldwin’s unforgettable line in the cult classic film Glengarry Glen Ross is a favourite for hard-hitting salespeople. Translation: if you want luxuries, put in the hard graft first. The same applies to climate change and carbon offsetting.

The concept of carbon offsetting is now hugely popular in the corporate world. The economic argument is straightforward: what difference does it make where and how you reduce greenhouse gas emissions? It’s all going up into the same atmosphere, so if you can find a cheaper way to remove carbon elsewhere to offset your own emissions, for example by paying to plant trees in a developing country, great. Economists call this ‘the efficient allocation of resources’. Everybody wins, right? Not exactly.

Putting aside the fact that the science of offsetting is contentious at best (measuring the amount of carbon absorbed by a growing tree is extremely complex and variable), there’s something fundamentally wrong with passing the buck of cleaning up our own mess to the developing world. You could quite easily argue that it actively prevents the shift to a greener economy here at home. There’s also plenty of evidence that many offsetting projects prevent sustainable development in the developing world as well. Offsetting is big business, often involving huge monoculture plantations that destroy biodiversity, remove indigenous communities from the land and provide very few long-term economic opportunities for local people. At its worst, carbon offsetting is a license to pollute; a get-out-of-jail free card.

This is not to say that carbon offsetting is a no-go zone for business. It would be impossible for many companies to reach net zero emissions without it. And it can, under the right circumstances, support sustainable development overseas. But it has to be an ethically-managed last resort, once all other avenues have been exhausted.

“Unlike other businesses, we don’t believe in simply buying carbon credits from the other side of the world to offset our emissions. Taking responsibility for your actions means making changes yourself, not relying on others to do it for you.”

Richard Hagan, managing director of Crystal Doors

Crystal Doors, a manufacturer in Rochdale I’ve had the pleasure of working with over the past few months, are a perfect example of doing it the right way. Crystal Doors aims to be a carbon neutral organisation by 2022. That’s incredibly ambitious, but they’ve managed to do a large amount of it themselves. Thanks to (largely cash-neutral) investments in energy efficient technology, solar power and biomass heating fuelled by the company’s own wood waste, the factory is now one of the greenest commercial buildings in the country. Excluding emissions in the supply chain, by next year the company’s carbon footprint should be around 70 tonnes – down from 290 in 2016. Any carbon offsetting that’s required to reach net zero by 2022 will be done as ethically as possible, focusing on local initiatives in the UK.

2. Transparency is the new black

Transparency is crucial. Organisations that are truly committed to leading the way are very much an open book. They tell you what’s going on behind-the-scenes and let others look under the hood. There are trusted third party certifications and standards that do this for you of course, from the universally-recognised ISO14001 to the hallowed ‘B Corp’, but not all businesses – especially the smaller ones – have the resources or time required to wade through the often-expensive procedure of getting accredited. So how can you tell when these companies are doing the right thing?

The first sign you’re onto a winner is a properly-measured carbon footprint that’s published online. Carbon footprints are made up of three ‘Scopes’ that separate greenhouse gas emissions from different sources. Scope 1 covers direct emissions from assets owned or controlled by the organisation, such as the burning of fuel in vehicles or boilers. Scope 2 covers indirect emissions from purchased electricity, heating or cooling that is generated elsewhere. Most organisations stop there.

Scope 3 is the tricky one. It covers all the other indirect emissions that a company is responsible for through its value chain, including the goods and services it purchases, the commuting of employees, the use of its products, and so on. Understandably, this is incredibly difficult to measure and monitor, especially for smaller businesses. But the fact remains that the environmental impact of the average company’s supply chain is many times that of its own operations. Scope 3 is where the real battle is; where organisations have an opportunity to influence others and drive change. Even if a company is just taking a stab at its Scope 3 through a basic screening exercise, it’s a sign that they’re truly committed to doing the right thing.

Again, Crystal Doors are a great example. Their last four annual carbon footprints for Scopes 1 and 2 are published on their website, along with a full explanation of their carbon reduction strategy, and they plan to introduce Scope 3 by next year.

3. It’s a team effort

Just as a bobsled team can’t hope to perform at their best unless each member of the team moves in unison, so it is with tackling climate change. A strategy that stays within the boardroom will never be truly effective. The best organisations understand this and engage everyone in their business, from top to bottom.

A brilliant example I discovered recently are Clean Air Ltd, a manufacturer in Bolton which has taken a quite unique approach for a small business. In an interview for GC Business Growth Hub, managing director Will Perrott told me how he’d convened an ‘environmental committee’ to drive action towards being carbon neutral by 2023. The committee includes one person from every department to ensure everyone’s voice is represented, with leads assigned for certain themes like energy, transport, packaging and even communications.

“From the start I wanted to make sure that the whole company could participate, so we set up the environmental committee to get a representative from each department involved. I sent out an email for volunteers and was amazed by the response – we were oversubscribed and actually had to turn people down!

“We met every month at first to get the ball rolling and now we meet every three months to monitor progress. Together we’ve come up with a huge number of ideas I would never have thought of on my own.”

Will Perrott, managing director of Clean Air Ltd

Speaking of communication, Clean Air Ltd runs their own ‘eco blog’ to share thoughts and lessons from their journey towards carbon neutrality. You can find it here.

4. It’s not just about the carbon

With all this talk of carbon, it’s easy to forget that the climate emergency is fundamentally a social justice issue as well an environmental one. Climate change disproportionately affects poorer countries and disadvantaged groups. Too often, you’ll see large corporates talk up climate change as if it’s a purely technical problem that needs fixing, while completely sidelining the social impacts or ethics of what they’re doing (the point about carbon offsetting above is a prime example).

You can tell an organisation really cares about what they’re doing when their approach to climate change goes hand-in-hand with ethical practices. That they do what they do, not just because it’s the rational economic response, but because it makes a difference to people’s lives now and in the future.

I was recently introduced to Rowlinson Knitwear, an employee-owned manufacturer of schoolwear not far from where I live in Stockport. Rowlinson Knitwear have made the environmental investments fitting for a company committed to tackling climate change: they’ve installed energy efficient lighting and heating; they’ve switched to a fully electric fleet; they’re looking at solar panels etc. But what really runs right through the core of their business is a clear desire to do good. They care about their suppliers in developing countries and it shows in everything they do, whether that’s providing clean drinking water in Bangladesh or paying double the rate of minimum wage in Egypt. The company is currently in the process of becoming a certified B Corp by the end of 2020.

“We want to be a force for good. We want to do our best by the planet and by people in everything we do. We always have a lens through which we look at everything, which is, in terms of decision-making: How does that impact people; how does it impact the planet; how can we do better.”

Neil Ward, managing director of Rowlinson Knitwear
Rowlinson Knitwear’s Climate Emergency Declaration in 2019