Carbon Reduction Plan template for UK SMEs

A carbon reduction plan sets out a business’ current carbon footprint and their five-year plan to reduce carbon emissions. In the first year, a typical carbon reduction plan template starts with current emissions, includes your targets and then sets out how you plan to make impact. That includes energy efficiency measures, installing renewable energy, switching your fleet to EVs, sustainable travel policies and employee engagement initiatives.

In future years a carbon reduction plan template will include your first year emissions as a benchmark and details of the progress you have made on your initiatives.

The UK Government has helpfully published a Word Carbon Reduction Plan Template in Word-compatible .odt format or you can access the same document in an editable Carbon Reduction Plan template in Google docs format from Gopher Zero.

Gopher Zero enables you to create a compliant and effective CRP online, without committing time and money with consultants. From calculating baseline emissions to setting reduction targets, we guide you through each step, without any jargon. When you’re done, just share your unique link or upload the CRP to your own website.

What is a carbon reduction plan exactly?

A carbon reduction plan (CRP) is a document published on a company website that sets out a company’s carbon footprint and what it’s going to do to reduce carbon. Exactly what it includes is up to you, but many companies have published carbon reduction plans in order to comply with procurement legislation for UK government contracts, so-called PPN 06/21.

These CRP templates consist of 6 elements:

1. Statement about your commitment to achieving net zero emissions (including a target year)
2. Baseline emissions footprint
3. Current emissions (this is the same as your baseline in your first year)
4. Five-year reduction target (plus a report of progress against preexisting targets)
5. Carbon Reduction Projects, both completed and changes that you plan to make in the future.
6. Declaration and Sign Off by a director

Who has to publish a carbon reduction plan?

That depends on who you are doing business with. The NHS has the strongest requirements: All new frameworks operated by in-scope organisations, irrespective of the value of the contract. Most public sector bodies require a carbon reduction plan for contracts over £5m per annum exc. VAT. This rule applies even if you are part of a consortium bidding for a large contract. The exact contract size specified is slightly different in Wales according to the WPPN 06/21.

How do you write a carbon management plan?

Completing a Carbon Reduction Plan Template (CRP) may seem like a daunting task for a small business, but it can be broken down into manageable steps. According to a survey by the British Chambers of Commerce, the average time taken by UK SMEs to complete a CRP is 2-4 weeks. Tools like Gopher Zero’s can significantly reduce the workload, making the process achievable for even the smallest organisation.

1. Establish Your Baseline Emissions Footprint

The foundation of a CRP is accurately measuring your current emissions. Start by collecting and analysing data on your energy use, business travel, and other relevant activities. The Department for Business, Energy & Industrial Strategy (BEIS) states that the average UK SME emits 2.5 tonnes of CO2e per employee annually. Use standardised emissions factors from the UK government’s Greenhouse Gas Conversion Factors repository to ensure accurate calculations.

• Calculate Scope 1 Emissions (Direct Emissions)

Scope 1 emissions are direct emissions from sources owned or controlled by your business, such as fuel consumption in company-owned vehicles or on-site gas boilers. To calculate these emissions, use activity data and emission factors. Practical tips for data collection include using fuel card reports or energy bills. According to the Carbon Trust, Scope 1 emissions typically account for 20-30% of a UK SME’s total carbon footprint.

• Measure Scope 2 Emissions (Indirect Emissions from Electricity)

Scope 2 emissions primarily come from purchased electricity. Use the location-based accounting method, which is most appropriate for UK small businesses, and source emission factors for UK grid electricity (418 gCO2/kWh in 2021, according to BEIS). Switching to a renewable energy tariff can significantly reduce Scope 2 emissions, potentially to zero if using a 100% renewable tariff with Renewable Energy Guarantees of Origin (REGO) certificates.

• Assess Scope 3 Emissions (Other Indirect Emissions)

Scope 3 emissions are indirect emissions that occur in your value chain, such as business travel, employee commuting, and purchased goods and services. While not all Scope 3 categories may be relevant, it’s important to consider key areas. Use spend-based or average-data methods to estimate these emissions. According to Global carbon disclosure charity CDP, Scope 3 emissions often account for more than 70% of a business’s carbon footprint. As an SME, your Scope 1 and Scope 2 emissions are key to unlocking powerful net zero progress for enterprise customers upstream looking at you to achieve their Scope 3 reduction targets.

2. Set Realistic Emission Targets

Set achievable yet ambitious emission reduction targets aligned with the UK’s overall target of a 78% reduction in emissions by 2035 compared to 1990 levels. Typical reduction targets for UK SMEs range from a 30-50% reduction over 5-10 years, based on case studies from the SME Climate Hub. Consider applying the concept of Science-Based Targets to ensure your goals are in line with climate science.

3. Identify Projects and Initiatives

Projects can range from low-cost behavioural changes to larger investments in energy-efficient technologies or renewable energy systems. You should consider both short-term wins and longer-term strategic projects when creating your plan. Popular initiatives among UK SMEs include:

• LED lighting upgrades, which can reduce lighting energy consumption by up to 80% (Carbon Trust)
• Installing solar PV systems, which can typically provide 30-50% of an SME’s electricity needs
• Energy Savings: Upgrade to energy-efficient lighting and equipment to cut down on energy use.
• Renewable Energy: Consider installing solar panels or using wind power.
• Transport: Encourage carpooling, use electric vehicles, or promote public transport.
• Waste Reduction: Boost your recycling efforts and aim to produce less waste.

4. Create an Action Plan for Implementation

A practical action plan to implement your identified carbon reduction projects means assigning responsibilities, setting timelines, and allocating resources using a spreadsheet or other template. You’ll need columns for project description, expected carbon savings, cost, timeline, and responsible person.

Make sure you keep on top of your plan with regular data collection and analysis to track progress against targets. Choose appropriate key performance indicators (KPIs) and report on these internally and externally. Businesses that actively monitor and manage their carbon emissions can achieve annual energy cost savings of 5-10%, according to the Carbon Trust.

What are examples of carbon reduction projects?

Strategies and technologies suitable for UK SMEs range from low-cost operational changes to more significant investments in green technologies. We’ve elsewhere highlighted some good examples of what businesses are doing to reduce carbon.

Let’s explore some obvious options and see how they can help your business reduce its carbon footprint.

1. Start with Energy Efficiency

One of the most accessible ways to start implementing your CRP is through energy efficiency measures. These can include simple behavioural changes, like encouraging staff to switch off equipment when not in use, as well as technological solutions, such as installing smart meters or energy management systems. According to the Carbon Trust, SMEs can reduce energy costs by up to 25% through energy efficiency measures. Consider the specific needs of your sector, whether it’s retail, hospitality, or small-scale manufacturing, and prioritise measures that will have the greatest impact.

2. See Solar as a Key Enabler

Installing solar PV offers significant benefits for UK small businesses, including reduced electricity costs and carbon emissions. While the upfront investment may seem daunting, the long-term rewards are substantial. The Solar Trade Association estimates that a typical SME solar installation can have a payback period of 5-7 years and potentially save 40-50% on electricity bills. Even in the UK climate, a well-designed system can generate significant returns. The key is to maximise your self-consumption (how much of the solar energy you will use). For any that you don’t use, the government’s Smart Export Guarantee (SEG) scheme provides a modest financial incentives for businesses to export surplus solar energy to the grid.

3. Make your IT greener

Doing business online, or just using a number of online services is another part of your carbon footprint and therefore a chance to reduce carbon.

Proper IT maintenance in the form of cleaning, component upgrades and analysis are essential to keep your technology running effectively for longer. The number one thing that can affect the lifespan and performance of most IT systems is heat. 

When purchasing new equipment, look for products with an Energy Star rating. These products are designed to use less energy, which can lead to significant cost savings over time.

With lots of publicity about energy-hungry AI, it’s easy to forget that cloud computing and digital tools for optimising business processes can all contribute to reduced resource use and emissions. According to a report by techUK, the UK’s digital technology sector has the potential to enable a 24% reduction in UK carbon emissions by 2030.

Choosing greener providers with energy-efficient data centres can make a big difference. The tech giants like Amazon and Microsoft are increasingly transparent, publishing calculators to check your carbon footprint.

4. Promote Sustainable Business Travel and Commuting

Business travel and employee commuting can contribute significantly to your organisation’s carbon footprint. Developing sustainable travel policies is an essential part of your CRP implementation. Strategies might include reducing business travel through video conferencing, promoting public transport use, and transitioning to electric or hybrid vehicles for company fleets. Cycle-to-work schemes can also encourage employees to choose low-carbon commuting options.

5. Reduce Carbon in your Supply Chain

Your business’s carbon footprint extends beyond your own operations and into your supply chain. A survey by HSBC found that 31% of UK SMEs plan to invest in their supply chains to become more sustainable in the next three years.Working with suppliers to reduce Scope 3 emissions is a crucial aspect of CRP implementation. Start by conducting a supply chain carbon audit and setting criteria for supplier selection based on environmental performance.

Consider adopting a local sourcing policy. This can bring benefits both in terms of carbon reduction and to the local economy.

6. Engage your Employees

Engaging your employees is critical for the success of your carbon reduction plan. Appointing green teams or sustainability champions can help drive behaviour change and generate new ideas. A survey by Carbon Trust found that 93% of UK workers are concerned about the environment, that’s a lot of potential for employees to get behind your sustainability initiatives.

Top tips: How to Keep Carbon Reduction Plans on Track

Adjust your plans as needed

Flexibility is key to a successful CRP. As you monitor your progress, you may find that some strategies are more effective than others. Regularly review your plan and be prepared to make adjustments based on what is working and what isn’t.

If certain actions aren’t yielding the expected results, analyse why and explore alternative approaches. For instance, if your efforts to reduce energy consumption through behavioural changes aren’t sufficient, you might need to invest in more energy-efficient equipment or renewable energy sources.

Keep an open line of communication with your team and encourage feedback. Sometimes, those on the front lines can offer valuable insights into potential improvements. By remaining adaptable and responsive, you can continuously refine your plan to achieve better results.

Be transparent

Transparency is vital for maintaining credibility and trust. Share your carbon reduction progress with your customers, employees, and other stakeholders. Regular updates on your achievements and challenges can help build a sense of community and shared purpose.

Promote your efforts

Promoting your carbon reduction achievements can enhance your brand and attract customers. Highlight your sustainability initiatives in your marketing campaigns, on your website, and through social media.

Create content that showcases your progress, such as case studies, blog posts, and videos. Share stories about the positive impacts of your actions, whether it’s reducing waste, saving energy, or supporting local environmental projects. These stories can resonate with your audience and differentiate your business from competitors.

If you’re looking to make that difficult first step, check out what you could achieve for your budget using Gopher Zero. Our simple flat fee can save you heaps compared to consultancy fees, and our jargon-free tool allows you to develop a robust and effective Carbon Reduction Plan in as little as 30 minutes.

Frequently Asked Questions

What are the costs associated with carbon reduction for small businesses in the UK?

The costs of creating and implementing a CRP can vary depending on the size and complexity of your business. However, many low-cost or no-cost measures can be taken, such as adopting energy-efficient practices and encouraging sustainable employee behaviours.

Which national and international climate targets should a CRP align with?

Small businesses can use recognised methodologies like the Greenhouse Gas Protocol and the Science-based Targets initiatives (SBTi). These sound complicated, but they are just aimed at making all the calculations consistent. UK businesses all need to align to the UK’s net-zero target of 2050 or earlier.

What support is available for UK small businesses to help them develop and implement CRPs?

There is plenty of guidance out there, from organisations such as the Carbon Trust, Energy Saving Trust, and local chambers of commerce. Gopher Zero goes a step further, with an online platform that does the legwork, fast-tracking the process and empowering small businesses to profit from the transition.

How often should UK small businesses review and update their Carbon Reduction Plans?

Every year. It is recommended that small businesses review and update their CRPs annually to ensure they remain relevant and effective. Regular monitoring and reporting of emissions data will help track progress and identify areas for improvement.

What are the risks of implementing net zero plans?

Potential risks and challenges include financial constraints, lack of technical expertise, and resistance to change from employees or stakeholders. These can be mitigated through careful planning, seeking external support, and engaging employees in the carbon reduction journey.