If you are a senior manager or owner of an SME and you aren’t worried about the future of your business or its day-to-day workings, then this blog probably isn’t for you; but don’t worry, feel free to have a read anyway!

Now, if you happen to actually be working your proverbial butt off trying to keep dozens of plates spinning maybe we can help. Running an SME in the UK is hard, despite the fact that nearly 90% of all UK businesses fall into this category. Environmental management can be an entire box of extra plates to spin. So, how do you make it work?

Here are some of our thoughts:

Carbon reduction and enviromental management

The UK started the high-level concerns about greenhouse gases and the seriousness of damaging our planets eco system. In 2015, we, like most other nations, signed the Paris agreement, which committed all those present to limit the impact of climate change by altering the activities which were causing the damage.

Ten years on, those changes haven’t really been followed and the increase in the world’s temperature has grown quicker than expected.

The methodology

Carbon Reduction and Waste Segregation are coming your way…

Segregating Waste

Sustainability what is it, and is it just a fad?

So what’s this got to do with your SME based in the UK?

A storm in an environmentally friendly tea cup?

1. Things I can’t do anything about, such as the first three, No Poverty, Zero Hunger, Good Health and Well Being – (though having tried to access NHS services of late I wonder whether the UK government should really be claiming allegiance to this goal!)

2. Requirements which are already enshrined in UK legislation, like gender equality, good education, reduced inequalities etc, so we should already be complying with them.

For the goals that can be impacted by our compliance, many of us running companies in the UK will likely find that we are already meeting many of them and with a little thought we can meet the ones we aren’t. As a result, the cost to us providing positive responses to tenders around these needs could be significantly reduced as they’ve already been met.

Wheels within wheels and the need for a referee

A further problem comes in the cost of the reporting that government, and other major purchasing bodies are expecting. Giving them the benefit of the doubt, I don’t think many have the slightest idea how much time and effort goes into responding to these requirements.

Nature abhors a Vacuum

Many of these Sustainability Reporting sites/Owners have managed to grow very close ties with major purchasing organisations, some links may even have financial agreements behind them:

i. You want to sell to company A,

ii. Company A says to do business you need to pay a subscription and complete Company B’s questions

iii. Company B then either pays a subscription to Company A, or could even be owned by them.

Which would explain why there are so many different websites/companies with similar but varying services. But for reliable and honest reporting, the person doing the reporting needs to be independent and competent, but at present this can’t be checked.

At long last, enter ISO 20400, an internationally agreed best practice guide for Sustainable Procurement. Originally written in 2017, this standard ought to result in a level playing field, and independent, honest and meaningful reporting. Let’s hope the UK government and all other UK based major procurement organisations are forced to accept and comply with the practices it enforces, and we all stop having to pay for these unregulated Sustainability Reporting websites hosted in unknown locations around the world.

Should you be interested in the background to Sustainability, and how we got to where we are, there’s a quick synopsis below.

The United Nations role in a divisive subject!

In 1987 a United Nations commission defined Sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” A very noble definition and aim.

All 193 nations who form the UN were present and unanimously agreed to the goals. This included the USA, the Russian Federation, China, India, most of the known world, and even the tiny inconsequential UK.

Those 193 countries are now charged with implementing, monitoring and reporting performance against these goals. Which is really where the problem starts. As UK Prime Minister Harold Wilson is reputed to have said, “a week in politics is a long time” and the last ten years have been particularly tumultuous. As a result, most of the world leaders who agreed to these very worthy and noble aims are now long gone.

Who knows if they will continue to be supported, or where the required financial investment will come from?

Complexity

UK Business and Government

In 2021, amid the confusion of trying to get through COVID, Brexit and unstable political leadership a government body almost “sneaked” out a seemingly insignificant document, PPN 06/21 (Procurement Policy Note 06/21). At first glance, the document is fairly innocuous, just typical bureaucracy asking businesses to generate yet another piece of paper for the civil servants to file.

But, similar to how a leak can lead to a flood or a small disturbance to an avalanche; this policy note is highly likely to have long-term and far-reaching impacts on every business in the UK. Addressing it strategically could protect your business from unnecessary risks and costs.

Why does it matter?

So, what’s that got to do with your UK SME?

As mentioned, these big contracts with companies must be awarded to those with a carbon reduction plan. Those plans must take into consideration the carbon generated throughout the supply chain. In other words, the companies bidding for these contracts need to account for ALL the suppliers, sub-contractors, service providers etc. associated with the supply of related goods and services.

In the UK over 90% of registered companies fall into the SME’s category: business to business suppliers, who work into other bigger companies until they reach the size and turnover of those directly competing for huge government based contracts. Statistically, most UK businesses will be part of the government supply chain in one way or another even if you are far removed from the end contract. So, jumping back to the previous flood/avalanche analogy, the requirement for carbon reduction plans will undoubtedly trickle down the supply stream.

An environmental management system complying with ISO 14001 will make it far easier to generate such a plan should you need to. Especially as generally this isn’t a one off requirement, the plans need to be kept up to date, so year on year you are going to have to have access to the data to update the plan and show that your carbon generation is reducing. The reduction of environmental impact is a main building block and driver of ISO 14001 systems.

The Enviroment (Death) and Taxes

Benjamin Franklin famously said, “In this world, nothing is certain except death and taxes”. Though it may not have hit you yet, the links between environmental performance and taxation have already been established, for instance, if you sell anything in packaging (!) you’ll probably be paying a levee on the quantity of packaging provided per annum. It isn’t going to stop there.

Remember the EU, that thing we spent millions getting out of… In Europe CBAM has been implemented. CBAM is the Carbon Border Adjustment Mechanism (CBAM), a tax on carbon-intensive goods imported into the European Union (EU) at this point it directly affects cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. But, given its role as a generator of revenue for the thirsty EU government, it seems naïve to think taxation will finish there. The UK version of CBAM tax is set to come into effect in 2027.

What can you do about it?

Environmental regulations are not going away. Businesses that proactively address their carbon footprint and sustainability by implementing a solid management framework like ISO 14001 will be better positioned to compete, comply, and thrive in this changing landscape. ISO 14001 is recognised internationally as the current best practice for environmental management. Whether you choose to lead the way or wait until compliance is unavoidable, the time to start preparing is now.

The UK Government has begun asking UK companies to provide Carbon Reduction Plans with new tenders over a certain value. They’ve also provided a template for such plans, and a service to review them for suitability, though they don’t seem to want to say how much the review is going to cost. These documents can be seen here. The government’s own plan and policies can be seen here, and covers reductions in business travel the government expects to see. Presumably Rishi Sunak hasn’t yet read this policy as his excessive level of private air travel has already been reported in the press (see here).

There seem to be two key pieces of information covering this issue at present:

In addition, the International Standards Organisation has also released a series of standards on carbon neutrality, in the range ISO 14060, with ISO 14064-2 describing the methods to be used for baselining and reducing carbon generation.

They all describe methods for quantifying and reducing carbon generation, though perhaps redictably each has a slightly different method, so will give different answers!

The ISO also produced IWA 42:2022, an “International Workshop Agreement” which defines Net Zero Guidelines. This last document goes further in defining the various terms used in carbon reduction discussions, which, while there is no internationally agreed method of measuring carbon generation, does show that the various powers that be are beginning to take the issue slightly more seriously. Interestingly it also includes 3.2.9 Residual Emission: greenhouse gas emission that remains after taking all possible actions to implement emissions reductions – which seems like the first formal, but sensible, acceptance that the creation of greenhouse gas emissions can never be fully prevented.

The UK Governments Guidance on PPN 06/21, includes the following statement:

Between 1990 and 2017, the UK reduced its emissions by 42% while growing the economy by more than two thirds. In 2019 the UK Government amended the Climate 9 Change Act 2008 by increasing the target for reducing greenhouse gas emissions in the UK to at least 100% lower than 1990 levels by 2050. This is otherwise known as the Net Zero target.

At present it doesn’t seem clear why the phrase “100% lower” was used. After all, if the target is zero greenhouse gas emissions by 2050, then why not simply say that?

It’s also not clear where this leaves “residual emissions” or who will stipulate what is an acceptable residual, and when.

I bought an iPad for my wife. At the time, you couldn’t play Candy-Crush on an Apple device, so it lay in our bedroom untouched for months. Eventually, I took pity on it, loaded up Kindle, and it became my portable Library. It worked well, had a good enough battery life, and convinced me that I should give an iPhone a chance at some point.

Then, almost the next minute in my aging mind it had its seventh birthday. Over in California some Apple marketeer had decided it was time I bought another device. So they stopped supporting the software, and over a few weeks each app, and its operating system began to fail. The device can still be turned on, it still has a good battery life, but because no software will run on it; its only remaining use is being a paperweight.

Apple publicise very little about what’s inside an iPad, we know it has a Lithium-Ion battery, but the other rare minerals extracted from strange, exotic and often war-torn areas of the world remain a mystery. BUT, I’m not particularly against Apple, take a look at the links below and you’ll see the havoc caused throughout the world by all the big manufacturers of electronic devices:

But what’s the answer? Modern societies around the world would struggle to survive without electronics, and personally I think it unlikely that we’d willingly return to pre-industrial lifestyles. So there must be something that can be done?

But if something is rare, shouldn’t we be using what we have to the maximum before seeking more?

Forcing the purchase of new goods by manipulating the software, mandating millions of tons of working devices to be scrapped seems to me to be a huge waste.

Obtaining the necessary minerals has a huge and often irreparable environmental cost to the planet. If we accept that modern society can’t be sustained without the benefits these technologies provide, then surely, we should atleast use them for their maximum life span? Not allow some profit hungry company to build in automated obsolescence.

Also, if it’s not the planned obsolescence that makes your hardware unusable then it’s also the lack of replacement parts and lack of technical specs being supplied to approved repair companies. This is why you should also make yourself aware of the Right to Repair movements happening across the UK, US and other places around the world. ( https://therestartproject.org/right-to-repair/ )

When all the worlds’ leaders gather at Climate Conferences and other high-powered meetings, aren’t these just the type of issues they should be addressing? Aren’t world leaders the only people that can make and enforce laws to stop this type of thing, and isn’t that the reason for such conferences?

Or are there other reasons?
COP 28 Climate Change Conference

In November 2021 Boris Johnson made much publicity by hosting the UN Climate Change Conference (COP 26). The incompetence of governments and politicians is hardly new, but due to the serious nature of the current situation I am staggered by the level of incompetence environmental issue have now reached.

There are various calls for carbon reduction, but despite the millions of £’s spent on environmental issues and awareness, and the millions of miles politicians have flown to many many conferences on this subject, it hasn’t yet been agreed how carbon generation should be calculated. So at the moment you can probably claim whatever you want, as many company’s do. I hope their shareholders don’t have grandchildren as this could be quite difficult to explain.

As the pressure now builds on governments and multinational businesses to improve their performance to avoid fines, “Greenwashing” and “Carbon Offsetting” seem to be more popular than actually making improvements.

What a pity Boris’s conference did nothing to ban these two strategies, but sadly it looks like money wins again wisdom.

But further down the food chain SME’s are now being encouraged to make the changes the more powerful organisations are avoiding. Tools like ISO 14001 are a very cost effect way of managing down your carbon generation and potentially help saving the planet. What a pity that those with the cash to make a real difference are more interested in side stepping such a vital issue.

Have a look here for the failure being made:

In July 2023 a tender issued by the NHS was due for response. Within that tender was a request to supply a Carbon Reduction Plan. This is now a UK Government requirement on all tenders above a set value, and will undoubtably flow down the supply chain to SME’s over the next few months.  The government policy can be seen here.

Through an actively implemented ISO 14001 management system we’ve been assisting organisations to reduce their environmental impact for around 15 years.

The carbon reduction plans now being requested on government contracts are very similar to the intent of the targets and objectives specified in ISO 14001, clause 6.2, though the government’s requirement is for measured commitment to reduction over a much longer period of time.

Key Insights from IWA 42.2022: Navigating Challenges in International Standards for Greenhouse Gas Reduction

International Standards document IWA 42.2022, which seems to be the most recent attempt to get international agreement on the technicalities of reducing greenhouse gases, contains some interesting points, reflecting the sense which seems to be eventually seeping into the environmental movement:

The intent is for all organisations to be setting targets consistent with reducing Green House Gas (GHG) emissions by 50% by 2030, compared to the baseline of 2018 levels.

It is hoped this will restrict global warning to 1.5^oC above pre-industrial temperatures. There is much debate over the figures, but it looks likely that we are about 1^o above at present, and some sources suggest we will surpass 1.5^o within five years.

Sounds a good idea, so how is it going to be done?