Energy and emissions solutions for small businesses

Notes from the Maryland Energy & Environment for Manufacturers Conference

Small businesses, especially manufacturers, are having challenges with managing energy use and greenhouse gas (GHG) emissions.

How can they be more efficient? How can they lower costs? How can they make the best use of technology? Which improvements will give them the most bang for the buck?

They are also increasingly being asked by their larger customers, “What are you doing for greenhouse gas emissions accounting? Are you tracking your impacts? What was your energy consumption last year?

The Maryland Manufacturing Extension Partnership (MD MEP) held a conference in June, the Energy & Environment for Maryland Manufacturing Summit, to provide a forum for addressing these challenges and sharing solutions. These solutions could apply no matter where you’re located in the U.S.

Some of the challenges and solutions that were discussed are listed below. Which ones apply to your business?

Challenge #1

Many smaller businesses are caught off guard when a top customer requests their GHG emissions, energy consumption, and other data.

Manufacturers are getting questions such as “What have you been doing as far as greenhouse gas emissions accounting?” or “What are your environmental impacts?” Companies then need to scramble to respond. Otherwise, their customers may turn to businesses that already have this information ready.

Solution

You can start tracking your GHG emissions and other environmental impacts using simple spreadsheets. You can always transition to a more robust software program.

There are 7 questions that you should ask when a client approaches you with a data request around sustainability reporting:

1. Which specific data do they need from you?
   • Greenhouse gas emissions data? Which gases?
   • Energy consumption data?
   • Water consumption data?
   • Waste disposal or recycling data?
2. From which time period do they need data?
   • Is your previous year’s data enough or do they need multiple years?
   • Does it need to match their financial reporting period?
3. How do they need data aggregated or disaggregated?
   • Do they need a total number for your whole company, or do they need it broken down by site/ facility?
   • Do they need the numbers broken down by activity (heating, electricity, vehicles, etc.)?
   • Do they just need a total emissions number or do they need it broken down by Scope (type of emissions)?
4. Which framework or standards do they follow (the larger the company, the more frameworks they may use)?
   • Global Reporting Initiative (GRI) Standards
   • CDP disclosures
   • Sustainability Accounting Standards Board (SASB)
   • Taskforce on Nature-related Financial Disclosures (TNFD)
5. Do they need the data assured (verified) by a third party?
6. In what format do they need the information?
7. When do they need the information?

The more questions that you ask on the front-end, the less frustration you’ll have later. You don’t need to overcomplicate or overthink the process when first starting to report, but you do need to be clear about expectations.

Challenge #2

How to track energy and GHG emissions data from different departments and different geographies

Solution

Again, even if you’re a small business and have locations in different localities, you don’t need to overcomplicate this.

Here are seven tips to help you be systematic when collecting your data:

1. Follow an accepted global standard for sustainability reporting
   • The GRI Standards are one of the most widely used standards globally
2. Use the same base year for each location
   • Ideally, this is at least two years prior to the current year
3. Document your baseline data
   • Make sure you have a single “source of truth”
4. Use the same reporting period for each location
   • Ideally, this is the same as your financial reporting period
5. Keep a record of your disaggregated data
   • By facility/ location
   • By activity such as heating, vehicles, manufacturing, etc.
   • By greenhouse gas
6. Be consistent in how you present your information
   • Use the same summary chart for each facility/ location
7. Document your methodology
   • Where you sourced your data
   • How you made your calculations
   • How you made your decisions around which data to include/ exclude

Challenge #3

How to make sure that your data is audit-ready

Solution

• Follow an accepted standard such as the GRI Standards
• Set up internal controls
• Document your methodology and your decision-making process
• Keep records of your original data sources such as fuel invoices
• Be transparent about any difficulties that you had collecting data

Challenge #4

How can you learn to use artificial intelligence (AI) and automation more effectively? How can you get your employees to embrace it (and alter long-standing company culture)?

Solution

Depending on your stance, AI may seem like a huge opportunity or a scourge.

Four tips to use it more effectively:

1. Be clear about why and how you want to use it – Don’t start using AI just because you think that your competitors are.
2. Monitor your energy use closely -AI can be an energy hog; costs can get out of hand quickly.
3. Go to conferences – they’re an effective way to learn about other business’ cautionary tales as well as success stories.
4. Communicate to your staff about your plans for AI and how it can help the company grow. The unknown can be scary – you want them to embrace technology; they can only do this if they understand how it benefits them.

Challenge #5

How can you determine which projects will have the most impact for reducing impacts?

For example, if you want to reduce GHG emissions, should you invest in electric vehicles or replace outdated equipment?

Solution

This topic needs more than a brief summary, but here are some ideas to get you started:

First, you need to know what your impacts are.

• What is your annual energy consumption amount?
• Which activities produce the most emissions or use the most energy?
• What are your GHG emissions each year?

The sustainability reporting process will help you get answers.

Once you know your baseline numbers and better understand your environmental impacts are, you can make a matrix to weigh the different options for reductions. (Thanks to the Volvo Group, who presented at the MEP conference, for this idea).

For example, you may want to list which options you’re considering, what your current energy use is, what your goals are, how feasible the solution is, and the potential costs.

Challenge #6

How do you balance the tension between short-term returns vs. long-term ROI when it comes to sustainability?

Solution

This challenge doesn’t have a simple solution. But as in Challenge #5 above, start by setting a baseline for where you are now and then set your targets for the future (for example, reduce energy intensity by 20% by 2030).

Creating a matrix may help you identify which improvement projects will be the most beneficial over time.

Challenge #7

If you are a producer of packaging materials, how should you prepare for the new Extended Producer Responsibility (EPR) regulations?

Seven states and counting (CA, CO, ME, MD, MN, OR, and WA) have enacted laws for packaging. Each state is a bit different, but most of the regulations place responsibility for managing product end-of-life (for example, ensuring that packaging materials are recyclable) on the producers of the materials. Fees can be substantial for non-compliance.

Solution

Due to the substantial fees and quickly approaching deadlines, you way want to engage a law firm that has a dedicated EPR team to help you. At the very least, you want to get familiar with the laws in the states where you currently do business.

Also, start tracking your materials’ use and disposal. If you’re unsure how to do this, see the GRI Standards GRI 301: Materials 2016 which provides details on how to track this type of data.

Do you need help collecting energy and emissions data and establishing your baselines? We can help.

Image by Enrique from Pixabay