Problems we solve ~ Carbon Accounting
What is Carbon Accounting?
Carbon accounting is a way of calculating how much greenhouse gas your business generates.
Just like your financial accounts quantify the financial impact of your business, carbon accounting measures and puts numbers to the climate impact of your business. Carbon accounting, calculates your business’s carbon footprint and shows you where your emissions come from. This gives you the information you need to reduce your carbon emissions, build a more sustainable business, meet current and future reporting regulations and gives you a tangible advantage in building your business's green credentials.
Why is our environmental impact so important to Wood and Disney?
Wood and Disney's overriding goal is to "help our clients Build Awesome Futures
for the next generation because, for us, family is the most important part of our lives."
If you look at our home page, it's there in black and white. Helping you build an awesome future for your business, your family and community, pervades every aspect of our mission and the service we provide to you. We already provide our clients with the best financial and business advice. Immersing ourselves in their business to gain a deep understanding of their business, finance and personal goals. But, an awesome future is more than just about a business's financial success. What is the point of building a successful business, a secure financial future for yourselves and your family, if, in the process the environmental impact of your business adds to the growing climate crisis threatening the future of ours and the next generations?
Wood and Disney
realised some years ago that reducing our carbon footprint was integral to building a greener, sustainable future for our children and generations beyond. That's why our drive to reduce our environmental impact, manage a socially responsible business helping our staff and clients reach their full potential and to build businesses that are financially sustainable and resilient, is so important to us. Sustainability: Environmental, Social and Financial, is at the heart of Wood and Disney's
business beliefs.
In the past, we could all claim climate plausible deniability. A few decades ago, climate change and greenhouse gas emissions weren't even part of our vocabulary. 5-10 years ago, we knew that our carbon footprint was a problem and that we really needed to reduce it, but didn't know where to start. But that doesn't wash anymore. Today, there are tried and tested systems that are available and affordable to businesses that can measure the greenhouse emissions of your business and give you control of the carbon footprint of your business - Carbon Accounting
Is Carbon Reporting mandatory in the UK?
Today, SMEs contribute around
44%
of total non-household greenhouse gas emissions in the UK.
As the UK government addresses ways of achieving net zero. The emissions of UK business and industries are coming under the spotlight. Some sources accredit around half (50%) of UK business-driven emissions to SMEs, the same proportion as larger businesses
(British Business Bank).
Mandatory reporting of carbon emissions by large UK companies and LLPs was introduced by the UK Government from the financial year starting April 1st, 2019. It currently applies to :
- Quoted companies (companies listed on a public exchange)
- large unquoted companies and LLPs; considered “large” if they meet two or more of the following criteria:
- a turnover of £36 million or more
- a balance sheet of £18 million or more
- 250 employees or more
Today, carbon reporting is not a legal requirement for UK SMEs. However, it is anticipated that compliance for SMEs will be introduced in the UK over the next few years.
However, just because carbon reporting is not currently a regulatory requirement for SMEs, there are businesses who are required to report on their carbon emissions by other stakeholders:
- Businesses Seeking ‘B Corp Certification’. B Corp Certification requires companies to measure and reduce their environmental impact. Carbon accounting is essential for the Environmental Impact section of the B Impact Assessment.
- Supply Chain & Customer Requirements. Large corporations are increasingly requiring carbon footprint data from their suppliers in order to fulfill their own carbon emission regulatory reporting. If your business is part of a larger supply chain, you may need to report your emissions to meet your contractual obligations.
- Regulatory Compliance for Government contracts. Certain UK businesses must comply with SECR (Streamlined Energy and Carbon Reporting) and other carbon disclosure regulations as part of supply contracts to the UK government.
- Businesses with ESG & Net Zero Commitments. Many organisations have Net Zero or Environmental, Social, and Governance (ESG) goals. Carbon accounting provides measurable insights to track sustainability progress.
What information may I need to report?
The UK’s Streamlined Energy and Carbon Reporting (SECR)
policy requires organisations to share energy use and carbon emissions information in their annual reports. SECR aims to bring the benefits of carbon and energy reporting to more businesses. The report includes both hard data on energy use, associated greenhouse gas emissions and also decarbonisation planning and targeting to reduce emissions. The intention is to encourage the implementation of energy efficiency measures, with both economic and environmental benefits, supporting companies in cutting costs and improving productivity at the same time as reducing carbon emissions.
Under SECR, companies are required to report their Scope 1 and 2 emissions, while reporting on Scope 3 emissions is voluntary.
- Scope 1 (mandatory): Direct emissions from a company's own operations, such as burning fuel for heating or transportation, or using materials that release green house gasses.
- Scope 2 (mandatory): Indirect emissions from the generation of electricity, heat, steam, and cooling purchased by the company.
- Scope 3 (voluntary): All other indirect emissions that occur in the company's value chain, including emissions from suppliers, customers, transportation and distribution, use of sold products, and end-of-life treatment.
I'm just a small business, why start Carbon Accounting now?
Carbon accounting is not just for tree hugging environmentalists!
Yes, the overriding goal of carbon accounting is to measure your carbon emissions and put you in control of your carbon footprint. The government is not forcing you to report your carbon emissions yet, but every indication points to reporting regulations being introduced in the near future for SMEs.
So why start carbon accounting now?
- Prepare for Evolving Regulations: While current mandatory carbon reporting regulations like SECR don't apply to SMEs today, the trend is clear: environmental accountability is expanding. By getting on-board today with carbon accounting, you can proactively understand your carbon footprint and establish reporting mechanisms, avoiding a rushed and potentially more costly scramble to comply later.
- Enhance Competitiveness and Access New Markets: Sustainability is becoming a significant factor for consumers, employees, and investors.
- With environmental credentials supported by the hard data provided by carbon accounting, your business can gain a competitive edge.
- Many large companies are prioritising suppliers with strong environmental practices and may prefer or even require carbon reporting as part of their procurement processes.
- Demonstrating a commitment to reducing emissions can enhance your business's brand reputation, attract environmentally conscious customers, and improve your employee engagement and retention.
- Access to green finance and investment is increasingly tied to sustainability performance. SMEs with carbon accounting in place will be better positioned to attract investors who prioritise ESG (Environmental, Social, and Governance) factors.
- Identify Cost Savings and Improve Efficiency:
- Carbon accounting involves a detailed analysis of your business's energy consumption and resource use, helping you identify inefficiencies and waste within your business.
- Understanding your emission hotspots can help you prioritise and implement cost-saving measures, such as switching to renewable energy, improving energy efficiency, optimising transportation, and reducing waste.
- Early action on carbon reduction can also help your business avoid or minimise the impact of future, potential carbon taxes.
- Proactive carbon management can also help your business adapt to a low-carbon economy and identify new opportunities in green technologies and sustainable practices
- Contribute to a Sustainable Future:
- Beyond the direct business benefits, starting carbon accounting now allows your business to make a difference to the national and global effort to combat climate change and achieve Net Zero targets.
- Taking early action demonstrates environmental responsibility and helps build a more sustainable future for all.
While not yet a mandatory requirement for most UK SMEs, starting carbon accounting now is a strategic move that positions your business to prepare for future regulations, enhance your competitiveness, identify cost savings, manage risks, and contribute to a more sustainable future. By taking proactive steps today, you can position your business for long-term success in a rapidly evolving world.
How can I measure my carbon emissions?
This all sounds great on paper but, as a small business, how do I measure my carbon emissions?
Until recently, we atWood and Disney have been asking the same question about our own business's carbon emissions. We realised some years ago that reducing our carbon footprint was important as central to our goal is building a greener, sustainable future for our children and generations beyond. That's why our drive to reduce our environmental impact, manage a socially responsible business which helps both our team and our clients reach their full potential and to run and support our clients in building businesses that are financially sustainable and resilient, is so important to us. Sustainability: Environmental, Social and Financial, is at the heart of Wood and Disney's business beliefs.
Wood and Disney have taken many steps to reducing our carbon footprint. You can read all about Our Environmental Impact by clicking. So far, our approach has been quite piecemeal. We've taken a number of small, but important steps, but they've nearly all been standalone and their impact has been hard to measure. We want to take control of our environmental impact just as we have control of our financial impact. To achieve control we need to have data on our greenhouse emissions from every aspect of our business, just as we have financial data on every aspect of our business. Carbon Accounting gives us that data and enables us to monitor and proactively manage our carbon footprint.
