Grow a Greener Business

• Kate Hennessy
• 25 March 2008
• Page 1 of 2 : single page

Photo credit: Getty Images

A cleaner way?

It’s an improbable link. The Chhattisgarh region of India and the busy HQ of your local plumber. However, as Joe Blow’s plumbers dash from job to job in their company utes, Indian farmers in Chhattisgarh are replacing inefficient diesel pumps with non-polluting treadle pumps to irrigate their crops.

And the link? Each tonne of carbon emitted by Joe Blow’s business in Sydney can be offset by the carbon these farmers save by ditching their diesel pumps. In the middle of these two scenarios is a booming industry of carbon offset providers, acting as brokers for carbon lost and saved.

Any business or individual can now easily offset their carbon emissions. A quick scan of Carbon Offset Guide Australia reveals that, as of October 2007, there were more than 30 offset providers in Australia.

The global market for voluntary offsets is growing rapidly and is estimated to expand to $400 million by 2010. As offsetting booms, there is an accompanying flurry of critics and naysayers who question many of the principles behind it. Yet with the federal government and the ACCC weighing in to promise tighter regulation, it looks like carbon offsetting is here to stay.

Critics maintain that purchasing offsets allows polluters to feel as though they have compensated for their actions and do not need to fundamentally change their behaviour. Others say companies use offsetting and claims of carbon neutrality as greenwash.

Corin Millais is the managing director of carbon offset provider Climate Care Australia. Millais says that, contrary to popular perception, offsets are not the easy way out. “In our experience, there’s very little greenwash put out by large fossil-fuel driven companies who turn to offsetting for public relations,” he says. “Offsetting is part of an overall carbon management toolbox that would also include reducing energy or making it more efficient.“But can you name a company, or an individual, who never travels? Offsetting fits into the carbon balance sheet with no easy solution, such as unavoidable travel.”

According to Millais, the attraction of offsetting for smaller businesses is that they can tailor their program. Depending on how much scrutiny an SMB is seeking, it can choose to formally audit its operations prior to buying offsets, or not take this step at all.

“The main impact for most companies will be their premises and their transport,” says Millais. “You can look at these glaring carbon problems and make an informed review without the expense of an audit.”

After an assessment is done, a calculator with a billing system calculates CO2 emissions from the client’s core sources. The client then purchases a package of offsets and leaves the rest to Climate Care.

Independent carbon offset providers are not the only ones offering solutions in Australia. Energy providers including Origin Energy and AGL offer schemes to customers as do ANZ, Bendigo Bank and BP Australia.

BP’s scheme is called Global Choice and has been running since 2001. Global Choice fuel customers choose the proportion of carbon to be offset and pay a small premium on all or part of this. BP then purchases carbon reductions from third-party projects.

BP Global Choice programme manager, Jenny Norman, says BP researched the entire life cycle of its fuel. “We looked at the carbon cost of the exploration, drilling, extraction, shipping, manufacturing and distribution.

“Burning the fuel was the next carbon cost, which is where 90 per cent of the carbon is found. We offset 100 per cent of this through Global Choice.”

Norman says Global Choice appeals to SMBs because they are unlikely to have a department already dealing with counting carbon. “It’s very specialist information so it makes sense for them to outsource it.”

As for the explosion in the offsetting industry, Millais believes it has been driven by all the right reasons.

“Individuals and companies are trying to take responsibility for their carbon impact. It will become a commoditised product, but it’s understandable people need to kick the tyres a bit first.”

What does Big Business know about being green?

Barely a month slips by without another slickly produced sustainability report emerging, bursting with photos of rolling green hills peppered with windmills, or healthy-looking kids playing in the sun. Not to mention lots of pie-graphs and quotes from people with the word ‘sustainability’ centre-stage of their title.

However, many Australian corporations are making genuine headway in becoming part of the environmental solution, rather than just a large part of the problem. And although small-to-medium sized businesses may not wield the same cash or clout, they have several advantages over the big guys when it comes to doing their bit.

The green chain gang

No small business-owner enjoys the mountain of paperwork involved in keeping a business afloat. After hurdling BAS, GST, changing workplace relations laws and the many other record-keeping necessities, dealing with your company’s environmental impact can seem downright unreasonable.

But with corporations now peering further than their own CBD stomping grounds to scrutinise their supply chains, it may mean the difference between winning or losing a lucrative contract.

“Tenders and B2B supply agreements are increasingly including environmental performance in the list of requirements,” says Brad Pace, director of environmental consulting firm Emission Statement. “The demand for companies that are openly searching out ways to positively contribute to climate change is expected to increase.”

It is unlikely that any supply-side small business could afford to watch as its ‘supplier of choice’ status evaporated due to lack of green credentials.

As resources such as energy and water increase in cost, implementing more efficient practices now will help reduce future costs. And in a tight labour market, businesses able to display their sturdy environmental practices will attract better candidates.

A colossal weight

Jean Cannon operates her own small business, an environmental management consultancy called EnviroAction. She has worked with SMBs (small-to-medium businesses) for 20 years and sees the imperative for their involvement in starker terms.