Low Carbon Economy Technical Support Officer Agnes Altmets explains why adopting an environmental standard can be a good move for your business, and what to consider when exploring your options.
There are a dizzying number of environmental standards and accreditations available to businesses today. They can range from rigorous third-party technical accreditations to self-verification standards and voluntary membership schemes. Some are sector-specific, while others can be applied to any business. Some can be one-off measures and others may require annual renewal. They can be low or no cost, or run into several thousand pounds in assessment costs and the time required for implementation.
There are far too many to tackle in one blog alone, but here are a few reasons why exploring your options may be a good move for your business.
For many companies, demonstrating good environmental performance and corporate social responsibility (CSR) to customers and stakeholders is becoming increasingly important. A 2020 survey of SMEs in the North West found that more than two-thirds want to improve their environmental sustainability, with pressure from customers the most commonly cited driver for action.
As larger businesses and multinational firms face increasingly vocal calls from consumers and shareholders to take stronger action on environmental issues like climate change, this pressure is being passed through the supply chain. According to the CDP, which tracks environmental disclosure by the world’s largest companies, there has been a 24 per cent increase in companies asking their suppliers to report environmental performance data over the last year. Third-party environmental standards are one route to demonstrating to your customers that you are committed to continual improvement and social value.
Improve brand image
Environmental standards can also improve and protect your brand image. Customers are rapidly becoming wise to ‘greenwashing’ – the act of businesses marketing themselves as ‘green’ without backing up their words with real action. One of the most effective ways to provide proof of green claims is to gain a recognised certification by a trusted third-party. Often these come with a branded logo or mark that is easily recognisable.
Another key driver of adopting environmental standards is to help improve operational performance. As well as demonstrating environmental commitments to stakeholders, internationally recognised management standards like ISO 14001 (environmental management) or ISO 50001 (energy management) help companies to put systems in place to identify opportunities to reduce costs, manage risk and deliver continuous improvement.
Future-proof against legislation
Environmental standards can also ensure resilience in the face of increasing regulatory pressure. A raft of new environmental laws and regulations are likely to be introduced over the coming years as the government takes stronger action on reducing greenhouse gas emissions and other environmental concerns. The government’s forthcoming Environment Bill, for example, is set to pave the way for new regulations on resource efficiency, waste reduction and other issues.
Attract and retain staff
Environmental commitments are becoming more and more important to employees, especially among millennials and generation Z. According to one 2019 survey, 70 per cent of UK workers say it’s important to them that their current or prospective employer is considered a ‘green business’ (increasing to almost 80 per cent amongst generation Z workers). A separate poll found that half of the workers between the age of 23 and 38 would consider quitting their job to work a more environmentally-friendly employer, and a quarter would even be willing to take a pay cut to do so.
As a general overview, environmental standards can be separated into two broad categories: mandatory and voluntary.
(i) Mandatory standards
Mandatory standards are those that are required in order to have a license to operate in a given market. For example, Forest Stewardship Council (FSC) certification is often a pre-requirement to operate in timber supply chains where environmental credentials are vital, such as construction, education and the public sector. Our resource efficiency service supported Oldham manufacturer Axiom Displays to achieve FSC certification for this reason.
In the food sector, Fairtrade certification is often a pre-requisite for some product categories. Some large businesses may also require a recognised standard like ISO 14001 as a minimum to enter their supply chain.
In the green technologies and services sector, there are many third-party standards that are required to deliver services. The recently introduced Green Homes Grant scheme requires suppliers to be TrustMark accredited and meet the PAS 2030/2035 standard to deliver the relevant energy efficiency measures. Suppliers of renewable energy technologies like solar panels and heat pumps often require certification to standards like the Microgeneration Certification Scheme (MCS). Companies in the construction sector may need to demonstrate the capability to work to strict green building codes like BREEAM.
(ii) Voluntary standards
Voluntary standards are often more focused on delivering broader and more holistic benefits to the business. Some popular third-party accreditations in this space include The Planet Mark, 1% For The Planet, and B Corp. More technical standards include ISO 14001, ISO 50001, ISO 26000 (social responsibility) and the Carbon Trust Standard / PAS 2060 (carbon neutrality).
Businesses that produce consumer-facing products can also benefit from voluntary product and packaging ecolabelling schemes like the government-endorsed On-Pack Recycling Label (OPRL), the Plastic Free Trust Mark and Carbon Trust’s Carbon Footprint Label. Around two thirds of UK consumers now support the introduction of carbon footprint labelling to help them make purchasing decisions.
There are voluntary standards that focus specifically on demonstrating commitments to investors, shareholders and other formal stakeholders, such as the self-certified Climate-Related Financial Disclosure. It’s also increasingly considered good practice for businesses to integrate the UN Sustainable Development Goals into their business strategy.
How to choose?
The above examples are just a few of the huge range of standards and certifications that are out there. So how do you go about choosing the right standard for you?
Start by identifying the key drivers that are relevant to your needs. 1% For the Planet is not going to help you identify environmental risks, but it may help to improve your brand image. ISO 14001 is more applicable to the former, but it may not make a big impact if you want to promote yourself as a green employer.
Our advisors can help guide you through this process and provide independent and impartial advice on the right direction for your business. Over the coming months, we will be publishing more blogs on different standards and what they entail. For one-to-one advice, get in touch with us today.