Workshop

A critical step for working out a business' environmental impact is working out its carbon footprint. While that might initially seem super complex, time-consuming and expensive, it needn't be. We hear how physical and digital product companies have worked out theirs, along with the creators of some excellent online tools.

AMIRAH JIWA: From Courier, I'm Amira Jiwa.

DUNCAN GRIFFITHS NAKANISHI: And I'm Duncan Griffiths Nakanishi.

AMIRAH: And welcome to Courier's Workshop podcast. Every two weeks, Workshop breaks down one essential business topic and explains how it could be useful for you. Our goal is to get you just the right amount of info to help you apply whatever we're talking about to what you're working on. I'll be speaking to experts with practical tips and founders with relevant experience.

DUNCAN: And I'll be explaining essential terms and summarising the key takeaways at the end of the show.

AMIRAH: Today, we're getting stuck into sustainability and our focus will be on carbon footprints. Climate is moving higher and higher on consumers’ agendas. Whether your motivation is protecting the planet or engaging with an issue that's important to your customers, understanding your company's contribution to the climate crisis is the first step to addressing it. 

Enter the carbon footprint calculation. Your company's carbon footprint is essentially the quantity of greenhouse gas emissions produced as a result of its operations. You calculate it by thinking about all the key sources of emissions that are related to your business, quantifying them and adding them all up. It can be a bit of a technical process, but we're gonna break it down into really simple terms. For this episode, we spoke to people at two different types of companies about the key emission sources that they included in their footprints. And then we got some advice on how to do the calculations in-house. The key, it seems, is to not get intimidated by the process.

TOM GREENWOOD: I think a lot of people don't do it, because they're really daunted by the idea of it. And they say, ‘Well, I'm not an expert in sustainability, and I haven't studied this at university, and I haven't got qualifications,’ and then the rest of it – and fair enough, I have the same concerns myself. But when it comes down to it actually, there isn't a template that you can use to say, ‘OK, this is exactly categorically the way it is done.’

HANA KAJIMURA: I think there is a dominant perspective in the industry that the numbers need to be perfect before you can say anything about them. And really what they are is a tool for you to, again, identify hotspots in your footprint so that you can reduce those emissions. And as long as you communicate them thoughtfully and transparently, with an understanding of where you want to improve those numbers, it's much more important to get those numbers out there and begin the conversation than to wait for perfect.

AMIRAH: First up, here's Tom Greenwood, managing director of Wholegrain Digital, a web agency in London that specialises in designing and building WordPress sites.

TOM: We were looking at our footprint from day one, but we weren't working it out in any detail. I think we started working it out really much more thoroughly in 2016.

AMIRAH: I know you ended up calculating your entire carbon footprint in-house. How did you go about doing that?

TOM: So the first thing we did was just basically figure out, at a conceptual level, what are the key areas we need to be looking at. So office space, the energy use of the office space, travel, the products that we buy, and creating those categories. And then setting out trying to figure out how we actually calculate each one. 

You either have to put in an investment of money to hire a consultant or you have to put in an investment of time to get through the headache of working some of these things out. They're not inherently complicated. As in, it's not like advanced math or anything, it's pretty much all just multiplication. But there is a bit of a headache in actually figuring out what information you need and finding out where you can get it from and hassle people like property managers to give it to you.

AMIRAH: And what were some of the key things that you included in your calculation. The areas that were most likely to have a significant emissions impact?

TOM: So for office space, for example – that should be an easy one, in the sense that you should be able to just look at your electricity bills and your gas bills and get an amount of electricity and gas. And then if you go online and google ‘carbon footprint of a kilowatt hour of electricity in the UK’, for example, you can fairly easily get the standard government figure for what that number is. So if you know how much electricity you use, then use just multiplication, you just multiply it up. 

So obviously we included the shared workspace and the percentage of that but then we also decided that we'll include all of the home working energy we do in a similar way. But we have to get our staff to give us their energy readings from their energy bills – luckily our team is up for that and they're quite open to that. 

And then you've got travel – so commuting, and then there's obviously business trips and things like that. And then you get into the more murky world of everything else that you buy. If you had a factory, then you'd have a lot of material inputs and things like that – we're doing digital stuff, so we don't really have any of that. But like you said, there is food and stationery and equipment and things like that. 

So what we did is that we identified the biggest thing out of all of that stuff. For us was equipment, because electronic equipment has a pretty huge carbon footprint before you've even used it, just from its manufacturing. So we include that for all of our equipment that we buy, and that you can get from the manufacturers. Most electronic products that you buy somewhere – well, I say most – I mean from any kind of well-known manufacturer like Apple or HP or somebody like that. If you dig around on their website, you can probably find that they've got a report somewhere that tells you the carbon footprint of that product in manufacturing.

AMIRAH: What advice do you have for a small business owner or operator that is attempting to calculate their carbon footprint entirely in-house like you did?

TOM: I'd say that's the core of where you should start, in terms of making sure it's robust, is the basic data should come from reliable sources. So how much electricity you're using? Well, OK, if you're using your electricity bills, then that's a reliable source. How much carbon emissions is produced by a kilowatt hour electricity? Well, there's official government data that they publish on gov.uk for that. So you can use that. Similarly, finding some reliable source, if you do have flights and things like that, then there are online tools that have fairly reliable calculator tools. So you don't have to do all the calculations yourself. And then basically just stating all these assumptions of how you got to your own conclusion. I think if you try to include as much as you can and be clear about what you have included and what you haven't completed, then you'll be in a good place.

AMIRAH: So, if you run a company that doesn't make physical things, your business footprint – like Wholegrain Digital's – is likely to be focused on the energy used to run your offices, and your employees’ travel, and also some of those key products you're purchasing. But what if you're a products company? Then, your footprint is probably more focused on your supply chain. Here's Hana Kajimura, from direct-to-consumer lifestyle brand Allbirds, to talk about how Allbirds calculated the carbon footprint of their footwear.

HANA KAJIMURA: Our founders had identified climate change as the biggest, most urgent problem of our generation. And so we developed this three-part strategy, pretty simple strategy to approach climate change – the first part being to measure, the second part being to reduce, and the third part being to offset our emissions. And, of course, in order to reduce your footprint, you have to know the starting point. So we started measuring the carbon footprints of each of our products very early on.

AMIRAH: What were the key sources of emissions that you included in your carbon footprint? 

HANA: I think directionally for any company in our space, in apparel and footwear, it's pretty common for the majority of your footprint to be from the raw materials that you produce. 

So certainly, looking at emissions not just within the four walls of your business, but all the way back in your supply chain, is really important. So we track five main categories of our footprint, which is pretty typical, the first being raw materials. 

So all of the emissions that go into producing the materials we use, including the emissions from sheep, on farms in New Zealand, for example. The second is manufacturing – so energy use at our factories. The third is transportation. Fourth is customer use. So we take it actually beyond the factory gate and we make assumptions about how customers are using and caring for our products. And then finally, end of life – what happens when the customer disposes of the product when they can no longer use it? 

AMIRAH: And what was the process that you use to calculate the footprint? 

HANA: Typically, the approach is to commission what's called a life-cycle assessment, which basically measures the emissions created across the entire lifespan of a product across those categories that I mentioned. But when you do this, in the historical sense of the word, it usually means that you focus on one product. It takes many, many months and tens of thousands of dollars because you're working with a consultant to collect hundreds of unique data points and run them through some fancy software. 

And so we started that way, because it was the thing that you're supposed to do, but found that it wasn't very fit for purpose. We're a young company, we move quickly and we make product changes quickly. We want to actually react to this data and make our products better because of it. And so we ended up taking that underlying methodology and process but putting it into a flexible tool that we worked with consultants to verify but largely use in-house. 

And so our approach has really been to work with smart people, do our best, add a buffer, be conservative, but then get on with the hard work of reducing our footprint and redirect all of that time and money to emissions reduction and not get stuck on measurement. 

AMIRAH: Finally, we know that calculating a carbon footprint is a really important first step when it comes to tackling a business' climate impact, but it's just the first step. How should brands think about reducing or offsetting their footprints once you know what it is?

HANA: For us, the real unlock was in framing offsets not as an either/or strategy, like either we buy offsets or we reduce button and strategy because the reason we're in this mess is because we can all get away with polluting and not being accountable to that pollution. And so, at the very least, as we work to drive our footprint to zero, we should have to pay for the emissions that we do create. And so it's really table stakes for us and should be for all businesses. It is a complicated space. So I think my best advice would be to work with a third party, again, that you trust and can build a relationship with, to make sure that you're buying credible projects. But again, in the same way with measurement, I think too often people hide behind the complexity of the space as an excuse to not do anything. And there are certainly some really high-level principles that you can apply when purchasing offsets in order to make sure that they are credible. 

So certainly, first and foremost, choosing only purchasing offsets that are verified by a third-party standard. And there are a few out there, like Gold Standard, or VCS [Verified Carbon Standard], that signify that a project is credible. You can look at what year it was created. And certainly, more recent projects tend to have higher degrees of scrutiny applied as we've learned more about this space. And then just looking at some more qualitative factors like making sure that the project is truly additional, for example, and wouldn't have happened without your investment, or that it’s permanent – that there's some guarantee that if you invest in a forest, it won't be cut down next year. And there are plenty of mechanisms in place – largely those third-party standards – that ensure all of those things.

AMIRAH: Hopefully hearing from Tom and Hana helps you understand what some of the key factors to include in your business' carbon footprints are. Now we're going to hear about a few free tools that can help you work out what your footprint is. 

First, for those companies making physical products, here's Mathias Wikstrom and Shawn McKell from Doconomy, the company behind the 2030 Calculator, which is a newly released online tool that makes it super easy to calculate the carbon footprint of a product that you make.

MATHIAS WIKSTROM: This calculator is the answer to a question that is extremely complex. However, we made it simple. And sometimes simplicity is the best starting point of all. Because in order to engage in this, you need to understand it because, if you don't understand it, what's the point? 

AMIRAH: The 2030 calculator does make a really complicated process quite simple. Can you explain a little about the problem that you were trying to solve with this tool?

MATHIAS: Well, this is one of the challenges actually, because sometimes it's the fact that we let ‘perfect’ come in the way of doing good. So today, there's a very precise process for calculating the life-cycle assessment of a product. But unfortunately, it has three barriers of entry: it's complicated, it takes a lot of time, and it's quite costly. In order for people to understand their impact, it needs to be calculated, and in order for it to be calculated, there needs to be something that is feasible, that comes with a precision that is relevant, but without all the barriers. We think it should be fast, we think it should be easy, and we think it shouldn't cost anything. Because if we start forcing people to pay up to do good, obviously less people will do good.

AMIRAH: And what exactly does the carbon footprint that comes out of the calculator take into account?

MATHIAS: We have taken the data from specific materials and specific transportation and specific energy and accumulated that so that you see that every single component in bringing a product to you to putting it on the shelf comes with an impact. So that's the aggregated carbon footprint.

SHAWN MCKEL: A lot of that data is available. It's just that until now, people haven't really put it all together in an easy-to-use way that we could find. That's why we ended up building it ourselves. 

AMIRAH: Who was the tool designed for? And what data exactly do they need to have on hand to use it?

SHAWN: For now, the tool is optimised for manufacturers. So you need to know where you're sourcing your materials from, where the location of your supplier is, what kind of energy source you have in your manufacturing facility. 

We consciously focused on cradle to gate, but we define that as from raw material extraction to basically the point of sale, because there are two things in a life cycle of a product that have the highest impact. One is the material that is used in the whole process and producing that material, and then the production of the product itself. The use phase of the product's life cycles, so that is really out of control of the brand. So we wanted to focus on the phases that the brand has operational control over – in what kind of material they use, where they source it from, how their manufacturing facilities are run.

AMIRAH: Finally, what's the value for businesses that you know want to calculate their carbon footprints and communicate those footprints on their products to consumers?

MATHIAS: Ingredients have been on food for years and it discloses potential impact on our bodies, and we should also have ingredients for products and, in this case, apparel with the potential impact it can have on our planet.

SHAWN: Carbon labelling is going to happen. So you're either going to be the first or you're going to be playing catch up.

DUNCAN: Definition time. Carbon labelling is a practice of communicating a product's carbon footprint on the item to provide transparency to consumers.

SHAWN: And even if no one else in your category is doing it, that's going to make you look like a more reliable brand if you're transparent about what goes into your product.

AMIRAH: You can find the 2030 calculator at 2030calculator.com. Right now it's focused on apparel, but the tool will soon be updated to cover food, furniture and lots of other types of physical products as well. But what if you make digital products like websites and not physical ones? Well, we've got a tool for you, too. Wholegrain Digital actually specialises in WordPress sites that have an intentionally low carbon footprint. And they've developed a website carbon calculator, which lets you calculate the carbon footprint of any website. You can find it at websitecarbon.com. Here's Tom again to talk us through the carbon impacts of websites.

TOM: The digital world is a physical world – there are factories full of computers that have to be made. And those computers get thrown away on a regular basis. And they're burning electricity, which is created from real fuel that's dug out of the ground. And there's real emissions that go into the atmosphere. It's all very real, even though we think it's not.

AMIRAH: So what is the carbon footprint of a website actually likely to be? 

TOM: The average website for the whole of the internet would produce about 3g of CO2. Every time somebody visits – a typical site could have 10,000 visitors – would be like 30kg a month. But then if it's really popular… big popular websites or news websites, popular e-commerce websites, they're going to be getting hundreds of thousands or even millions of visitors per month. So you can scale that up, you're getting into the tonnes of CO2.

AMIRAH: OK, and where does that carbon footprint come from, you know, it's kind of hard to imagine how a website uses energy.

TOM: So one is the data centre, which is basically a giant warehouse, somewhere in the world, full of computers. And on one of those computers, or multiples of those computers, somewhere is a copy of your website. And every time somebody visits it, that computer is firing up, doing calculations, working out what it needs to send to who, and doing that work of sending it to somebody.

So that itself is using electricity. And it's not just the physical computer that your website is on that's using electricity. It's also the building that it's in is using a lot of electricity because computers need to be kept cool, but computers inherently generate a lot of heat. So when you shove them all in a giant warehouse together, it all gets really, really hot. 

So you have this very awkward relationship whereby you want to keep them cool, but they want to make themselves hot. So data centres inherently then use vast amounts of electricity with air conditioning systems trying to cool themselves down. 

The information has to get from the data centre to whoever it is that wants to view it. And they could be nearby, you know, it could be a London data centre, and the person visiting your website could be in London – it's not very far. But, equally, the person visiting your website could be in Sydney, Australia. 

It has to travel through a network. And that in itself uses electricity to actually send that data through. And there's lots of repeater stations along the way. The further it goes, the more repeater stations it has to go through, which are all basically boxes of electronics using electricity. 

And then at the end, it gets to somebody's device, whether it's their phone, or their tablet, or their laptop, or their smart TV or whatever it is. And that device is then using electricity to process the information and figure out, ‘OK, what do I need to show to the user? What do I do when they click on this thing?’ And obviously the screen itself that they're viewing it on. That whole spectrum from the factory for the computers at one end through the cables to the device at the other end.

AMIRAH: Finally, how does someone design a website that's more energy efficient, you know, and has a lower carbon footprint?

TOM: Yeah, so the three top things to think about when making a more energy efficient website would be: firstly, use images efficiently. So, image is probably the number one culprit of unnecessary carbon emissions on most websites. So there's either too many images that don't serve any purpose or they're too big, or they're not compressed properly...

So like actually sizing the images relative to the space that are going to be shown is such an easy win to make file sizes a lot lot smaller. So that's one thing. I say number two, kind of the same thing, is videos. Although videos are not used as commonly: every website pretty much has images; not every website has a video, but where they are used, video is so data intensive. It just blows everything else out of the water. 

So just think really carefully about video. Video is great for communicating certain types of information, but it can be used frivolously as sort of a gimmick. 

And then the third thing I'd say, as a low-hanging fruit for reducing carbon emissions, I'd say just choose a web host that has a strong commitment to renewable energy. So ask your hosting company to send you their statement on where their energy comes from.

AMIRAH: Huge thanks to Tom, Hana, Mathias and Shawn for joining us today. Now, here's Duncan Griffiths Nakanishi with some key takeaways and next steps if you're keen to get calculating.

DUNCAN: Number one – calculating a carbon footprint is a great first step for a business of any size looking to understand their environmental impact. Once you've calculated your footprint, you can reduce or offset it. 

Number two – the most important thing is that all significant emission sources for your business are accounted for. What these are will depend on your company size and the kind of things you make. 

And number three – there is no exact format for how to calculate your footprint. To make it as accurate as possible, try and use the best data you can find, outline what you have and have not included in it, and outline all the assumptions you make. 

If today's show inspired you to calculate your company's carbon footprint, we put together a detailed step-by-step guide on how to do it – designed specifically with small businesses in mind. And you can find that mailchimp.com/courier/workshop.

AMIRAH: That's it for today. If you have any ideas or feedback for us, get in touch at [email protected]. We'll be back with another edition of Workshop in two weeks’ time.