How to Calculate and Reduce Your Business's Carbon Footprint

Conducting a carbon footprint analysis reveals the full spectrum of your company's environmental impact and helps you address it.

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By Carol Tice


Opinions expressed by Entrepreneur contributors are their own.

Like many environmentally minded business owners, Tom Bowman wanted to cut pollution at his company. His exhibit and trade-show booth design firm had switched to more energy-efficient printers, cut back on air travel for the 10-person staff and upgraded to a more efficient air-conditioning system. While the new system cost about $7,000, it also slashed Bowman Design Group's utility expenses by 65 percent.

Bowman was pleased with the results but also wanted to go deeper and learn if he was fully addressing his company's impact on the environment. He decided to conduct a carbon footprint analysis through the Climate Registry, a nonprofit group that monitors greenhouse gas emissions. Remarkably, the analysis showed focusing on the office in Signal Hill, Calif., ignored most of the problem. The majority of the company's carbon emissions were caused by his clients shipping heavy booths cross-country to trade-show and museum exhibitions. He learned that even small changes to shipping practices make a significant difference.

"Using a more modern trucking fleet can be 20 percent more energy efficient," Bowman says. "Pad-wrapping exhibits instead of putting them into bulky crates can save another 20 percent."

Related: How to Go Green With Carbon-Neutral Shipping

Few companies consider the full spectrum of their environmental impact, says Anant Sundaram, a professor at the Tuck School of Business at Dartmouth University who teaches a course on business and climate change. A carbon footprint analysis can create a more complete picture and provide a blueprint for reducing the load. While major corporations might hire an expert firm to conduct a customized and highly detailed evaluation, most small businesses use more affordable online survey tools. Bowman paid $400 for his Climate Registry analysis, which asked a series of questions about his business, facilities, miles driven, and types and quantities of energy use.

There are three types of emissions a carbon footprint analysis examines, Sundaram says:

  1. Direct fuel consumption, such as gas burned by employees commuting and driving cars on company business
  2. The pollution emitted from the electricity that powers your store or office
  3. The indirect emissions associated with the business, such as the impact of mining necessary raw materials for manufacturing or the fuel used to ship goods to stores and out to customers

Many businesses have directed their carbon-cutting efforts toward the first two types because they are easier to measure, says Sundaram. For instance, the U.S. Environmental Protection Agency offers a guide that shows how much pollution is emitted by region to create electricity. Because electricity is generated in different ways in different areas, with coal widely used in the Northeast and wind power more common in California, each section of the grid has its own recognized pollution load.

It's more difficult to figure out the environmental impact of indirect emissions associated with creating and shipping the products that line your shelves. After seeing the results of his carbon footprint analysis, Bowman began tackling his clients' inefficient shipping routes.

Related: More Businesses Turn to 'Near-Sourcing' to Save Time and Money

For example, Bowman realized that one of his trade-show customers attended three shows a year in three far-flung cities around the U.S., clocking substantial trucking miles to transport his booth to each show and then back to headquarters. Instead of going back and forth, he and the client came up with a plan to store the booth at a warehouse near each show until the next event.

By shipping the booth on a triangular route rather than on three round-trips, the exhibitor was able to slash shipping miles and cut emissions more than 60 percent. Bowman says he's also helped clients plan better to avoid pricey and polluting last-minute air-freight deliveries of brochures and other show materials.

Several online assessment tools enable small-business owners to create a carbon-use snapshot to serve as a baseline for improvement, says Chris Jones, lead researcher for the Renewable and Appropriate Energy Laboratory's CoolClimate Network program at the University of California, Berkeley. With CoolClimate's calculator, you input information about your business size and type and then receive a quick estimate of your carbon use. Other widely used online tools include those from the Greenhouse Gas Protocol and Carnegie Mellon University's Economic Input-Output Life Cycle Assessment.

What's more, some trade organizations such as the National Retail Federation have developed industry-specific tools. Check your industry's associations to see if they have useful benchmarks or resources.

Once you've completed a carbon footprint analysis, consider how your business can cut its shipping emissions. In short: Use heavier loads and more efficient modes, says Jeff Karrenbauer, president of supply-chain software and consulting firm Insight Inc.

"The worst for carbon output is small parcel shipments by air," Karrenbauer says. Trucks and railroads create less pollution than fuel-guzzling airplanes, he says. Fewer, heavier ground shipments will also expend less fuel than more frequent light loads, since trucks with partial loads from different customers make more stops and tend to have less efficient routes. He suggests shipping full truckloads or railroad carloads. If you don't have enough goods for a full shipment, consider teaming up with other local businesses to create one from your town.

If you have shipments going to several different locations in one region, another carbon-saving technique is to send one truck to the region and then parcel out the specific deliveries to a local carrier, says Karrenbauer. For example, running a single truck with goods from an Oregon warehouse out to Boston and then splitting up deliveries for the Northeast will substantially reduce emissions compared with sending several small deliveries all the way from Oregon.

Related: 4 Ways to Green Your Office

Carol Tice

Owner of Make a Living Writing

Longtime Seattle business writer Carol Tice has written for Entrepreneur, Forbes, Delta Sky and many more. She writes the award-winning Make a Living Writing blog. Her new ebook for Oberlo is Crowdfunding for Entrepreneurs.

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