November 4

Carbon reduction guide for small business

Taking action on your carbon footprint doesn't have to be as overwhelming and confusing as it often seems. Here's a simple guide.

This is the third article in a series - The Net Zero Carbon Transformation and your Business. Check out the other ones when you're done:

1. Journey to Net Zero – a COP26 explainer

2. What do climate change goals have to do with business?

4. How to measure and offset your carbon footprint

Carbon reduction hierarchy 

Many of us are familiar with the waste hierarchy, which sets the order of priority of managing waste - reduce, reuse, recycle. There is similarly an energy hierarchy, which for businesses is essentially the following:

  • Turn it off (avoid using energy) - use natural insulation and ventilation (both your building envelope and your personal dress!) to minimise the need for heating and cooling, switch off lights and equipment when not needed, avoid unnecessary travel etc. This can be supported by using automatic power-saving settings on equipment and installing timers and motion sensors on lights and heating and cooling.
  • Use energy efficiently - invest in energy efficient equipment eg. heating, cooling and ventilation, lights, IT equipment, kitchen appliances etc. (generally in that order to achieve the biggest reductions). You can hire someone to do an energy audit or use smart meters to help you prioritise the biggest energy users.
  • Switch energy source - electrify any fuel use (vehicles, gas power) and switch to renewable energy (either rooftop panels or buying through a renewables-focused power company or GreenPower product).
  • Offset - any remaining carbon.

The strategies at the bottom of this list can be the quickest way to carbon neutrality, but also the most expensive. So if you want to make the change quickly, you can start by switching to renewables and offsetting your remaining footprint immediately, but make sure to go back and apply the first two strategies to reduce your actual energy requirements (and go net zero as discussed in the previous article in this series).

Carbon reduction hierarchy for small business

Industry-specific actions

The above actions are relevant for most businesses. However some industries have specific emissions sources and actions to address, including:

  • Agriculture - minimise land clearing and apply technologies to reduce methane and nitrous oxide emission
  • Landfills - capture landfill gas (high in methane) and use for energy generation
  • Construction - minimise the carbon footprint of construction materials, especially concrete, and design for building efficiency
  • Manufacturing and industry - minimise fugitive emissions from industrial processes and design products for efficiency in use
  • Oil, gas and mining - minimise fugitive emissions from extraction, storage and transmission of oil, gas and coal.

Support available for small businesses

There are many discounts, rebates, grants and free services available to make these changes affordable and accessible to small businesses. This includes solar panels, efficient equipment and lighting upgrades, and business energy audits, often available free or at a fraction of cost. Make sure to check your state government and local council website for the ones relevant to your area.

Looking beyond your direct footprint

Once you've addressed your own footprint, you can start looking at what else you can influence.

What about your indirect footprint, or the products and services used by your business? Ask suppliers about their carbon and net zero plans, and where possible, preferentially choose those who are taking action.

You can also look to influence others around you, including communicating your carbon commitments and progress to your customers, your employees, and peers through industry and business networks.

Consider measuring your footprint and setting a carbon reduction target

As discussed in the previous article in this series, growing numbers of businesses are committing to reducing their absolute value chain emissions to zero by 2050, including over 300 small and medium businesses according to Purpose Bureau.

In order to do so, you will first need to measure your current footprint. This includes gas consumption, fuel used in company-owned vehicles, electricity consumption, and for some industries, other energy uses (eg. steam) and process emissions. There are a number of handy calculators available on the web to help you, like this one.

Small businesses are also encouraged to measure key indirect value chain emissions such as business travel, paper use and waste, but there is less focus on measuring the entire Scope 3 footprint than for large businesses.

You can find out more about how to measure your emissions footprint and offset it in order to go carbon neutral in the next article in this series.

About the author 


I believe in the power of small business to have mighty impact. After 15 years driving sustainability in corporates and government, I am bringing my expertise to support small businesses - those with the passion, innovation and agility to tackle the world's greatest challenges.


carbon, do less harm, net zero

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