Regardless of whether you support, question, or oppose the climate change and environmental arguments one thing is certain: they will impact your business, if they haven’t already, and that impact is likely to arrive soon. Depending on your industry, the related financial consequences could be very significant, but very few businesses will remain unaffected.
The easiest way to ensure you are appropriately prepared is to look into and implement the practices suggest in ISO 14001, the internationally agreed best practice standard for Environmental Management. Taking a proactive approach and beginning to address these issues in a structured and methodical manner now, will save the panic, fuss and potential costs of last minute action.
The standard provides a framework for helping manage environmental risks methodically and logically. It can help control costs, reduce the chance of you implementing the wrong controls, and ensure compliance with regulations. Which in turn will help you avoid penalties, fines and reputational damage that could be difficult to recover from.
Complexity
Political debate, evolving science and just the size and implications of the problem have caused controversy. The added and often questionable ‘advocacy’ from vested interests has added scepticism, even at the highest levels of government and industry. The huge financial power of the oil industry for instance has often been wielded to crush opposition, override regulations and remove constraints on the more damaging aspects of the industry.
But parking the controversy, climate change is accepted as real, and fossil fuels accepted as the main contributor. The only real debate left is how and what we do about it.
UK Business and Government
In 2021, amid the confusion of trying to get through COVID, Brexit and unstable political leadership a government body almost “sneaked” out a seemingly insignificant document, PPN 06/21 (Procurement Policy Note 06/21). At first glance, the document is fairly innocuous, just typical bureaucracy asking businesses to generate yet another piece of paper for the civil servants to file.
But, similar to how a leak can lead to a flood or a small disturbance to an avalanche; this policy note is highly likely to have long-term and far-reaching impacts on every business in the UK. Addressing it strategically could protect your business from unnecessary risks and costs.
Why does it matter?
PPN 06/21 at its most basic level states that when any government department or organisation (like the NHS) wants to buy something through a tendering process, they must use insist the potential suppliers provide a Carbon Reduction Plan. This shows how that business is going to assist the government to meet the carbon reduction targets it agreed in 2016 under the Paris Agreement (COP 21) – yes, the one Mr Trump has just walked out of for the second time.
So, what’s that got to do with your UK SME?
As mentioned, these big contracts with companies must be awarded to those with a carbon reduction plan. Those plans must take into consideration the carbon generated throughout the supply chain. In other words, the companies bidding for these contracts need to account for ALL the suppliers, sub-contractors, service providers etc. associated with the supply of related goods and services.
In the UK over 90% of registered companies fall into the SME’s category: business to business suppliers, who work into other bigger companies until they reach the size and turnover of those directly competing for huge government based contracts. Statistically, most UK businesses will be part of the government supply chain in one way or another even if you are far removed from the end contract. So, jumping back to the previous flood/avalanche analogy, the requirement for carbon reduction plans will undoubtedly trickle down the supply stream.
An environmental management system complying with ISO 14001 will make it far easier to generate such a plan should you need to. Especially as generally this isn’t a one off requirement, the plans need to be kept up to date, so year on year you are going to have to have access to the data to update the plan and show that your carbon generation is reducing. The reduction of environmental impact is a main building block and driver of ISO 14001 systems.
The Enviroment (Death) and Taxes
Benjamin Franklin famously said, “In this world, nothing is certain except death and taxes”. Though it may not have hit you yet, the links between environmental performance and taxation have already been established, for instance, if you sell anything in packaging (!) you’ll probably be paying a levee on the quantity of packaging provided per annum. It isn’t going to stop there.
Remember the EU, that thing we spent millions getting out of… In Europe CBAM has been implemented. CBAM is the Carbon Border Adjustment Mechanism (CBAM), a tax on carbon-intensive goods imported into the European Union (EU) at this point it directly affects cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. But, given its role as a generator of revenue for the thirsty EU government, it seems naïve to think taxation will finish there. The UK version of CBAM tax is set to come into effect in 2027.
What can you do about it?
Environmental regulations are not going away. Businesses that proactively address their carbon footprint and sustainability by implementing a solid management framework like ISO 14001 will be better positioned to compete, comply, and thrive in this changing landscape. ISO 14001 is recognised internationally as the current best practice for environmental management. Whether you choose to lead the way or wait until compliance is unavoidable, the time to start preparing is now.
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No AI was used to write this post, so the spelling and grammatical errors are all mine, and the result of a UK, state provided, education 😊, for which I remain, most thankful.