We have just had the Glasgow climate summit and a lot of the political agenda outside Covid has focused on net-zero emissions. Indeed, the outcome of the summit was that we would work towards net zero emissions with the timing of achieving that milestone being the key point of difference. Domestically, the competing political forces will argue the merits of what we do when and what achieved; the only certainty is that this will be a part of the political landscape for years to come. In the process, local businesses will increasingly asked to demonstrate how they are contributing to net-zero by 2050, and consumers will be making choices.
Whilst this might sound like more red tape that the small business owner needs to address along with generating enough income to meet payroll and pay suppliers, this could be quite helpful if addressed in the right manner. If a business was to put together a well-articulated plan on how it would contribute to net zero emissions by 2050, this could be quite a powerful communication and marketing tool. The business could demonstrate that the products and services it generates that provided in the context of a sustainable environment then there would be many consumers that would choose those products or services when compared to a business that is silent on sustainability.
The What, When, and How of Net-Zero Emissions
Most businesses who want to address sustainability would start with something like solar panels and it will drive by the opportunity to reduce electricity costs. When you start the process there are lots of variables and ultimately there is a cost and a financial return. Once you realize that the sun only shines on some days for 50% of the day the financial returns can be a lot less than initially anticipated. Regardless, businesses would often still proceed based on the cause even though financially the costs may not stack up.
Realize the Fact!!!
If we step back from that scenario and look at what the key driving factors should be. One is Environmental footprint and the second is financial return. If we accept this, then the question should be “is spending money on solar panels is the most cost-effective way of reducing the business’ environmental footprint?” If the business has only looked at solar, then it hasn’t considered all the options available.
There are many different types of government assistance available for expenditure on energy efficiency, solar is one, but there is also energy efficiency, lighting, and updated equipment. There is also the opportunity to conduct energy audits and feasibility studies to help work out the best pathway towards sustainability. As the election approaches there will be other schemes and incentives which would impact decisions. There is also education and awareness for consumers and staff which can be more effective than any scheme – my own experience was growing up in an era where we always being asked to turn the lights out!
When you look at all the options available, there are costs involved and returns on each. A Net Zero emissions plan allows a business to identify all these options and then prioritize each and set aside a budget each year. It also allows the business to promote the plan gain support from its customer base and potentially attract new environmentally conscious consumers. I would always envisage that solar would be a part of any plan, but there are more options than just solar which would contribute to net-zero emissions.
About Brian Doughty
Brian Doughty is the founder of the outsourced CFO which is a part-time CFO Service for small to medium-sized businesses. Brian’s experience in large corporate and small businesses is unique and has enabled him to develop a simple to understand set of tools that will help business owners engage staff, monitor performance, and achieve their goals. For more information, visit www.theoutsourcedcfo.com.au.