In today’s world, reducing carbon emissions is not only about protecting the planet – it’s also becoming a key factor in the long-term success of businesses worldwide. 

Governments, investors, and customers alike are increasingly concerned about the effects of climate change. Despite numerous global initiatives, CO2 emissions from energy and industry have surged by 60% since the 1992 United Nations Framework Convention on Climate Change.

Given this backdrop, it’s clear why small to mid-sized businesses – which account for roughly 90% of businesses worldwide – are facing growing pressure to implement effective carbon reduction plans as soon as possible.

So, what exactly is a carbon reduction plan? Why are they crucial for mid-market companies like yours? And how do you go about building your own? Discover everything you need to know to kick-start your emissions reduction journey today.

What is a carbon reduction plan?

A carbon reduction plan is a detailed blueprint that guides your company toward reducing its carbon footprint. 

The plan typically involves analyzing your business’s current greenhouse gas (GHG) emissions, pinpointing major emission sources, setting realistic reduction targets, and implementing actionable steps to achieve these goals.

Measures could include investing in energy-efficient appliances, transitioning to renewable energy sources, or electrifying your vehicle fleet, among others. 

The importance of a carbon reduction plan for mid-market companies

Not only is implementing a carbon reduction plan good for the environment but it is also good for business. Here’s a glimpse into the benefits:

Cost savings

From reducing energy consumption to producing less waste, implementing carbon reduction strategies often leads to notable cost savings. By investing in energy-efficient technologies and renewable energy, you can cut down your utility bills and operating costs.

Streamlined operations

Carbon reduction initiatives often go hand in hand with operational efficiencies. By using materials more mindfully, reducing waste, and optimizing processes, you can expect leaner business operations with less environmental impact.

Enhanced reputation

Today’s investors and consumers typically prefer to engage with environmentally responsible companies. Committing to reducing carbon emissions can therefore boost your company’s reputation leading to increased customer loyalty, attracting new clients, and enhancing your overall brand image.

Competitive edge

Businesses that take a proactive approach to carbon reduction are often seen as industry frontrunners – particularly in markets valuing sustainability. This approach not only prepares you for future regulations but also opens doors to opportunities in green markets and sustainable investments.

What are carbon reduction requirements for mid-market companies?

Reaching net zero is a top priority for many governments and international bodies worldwide. Governments are crafting frameworks to encourage businesses to actively reduce their carbon emissions and contribute to national and global targets. 

The European Parliament, for example, has adopted the European Climate Law, which raises the EU’s target of reducing net GHG emissions by at least 55% by 2030 (from the current 40%) and makes climate neutrality by 2050 legally binding.

It has also committed a whopping 30% of its overall budget between 2021 and 2027 to address climate change. 

This proves that sustainability initiatives are no longer a choice for businesses, but are becoming a regulatory requirement.

The Corporate Sustainability Reporting Directive (CSRD) 

A prime example is the EU’s Corporate Sustainability Reporting Directive (CSRD). This new directive is considered one of the main building blocks that will enable Europe to achieve net zero emissions by 2050.

It requires more businesses, including mid-market companies, to start reporting on their non-financial sustainability data.

The Science-Based Targets project (SBTi)

The Science-Based Targets project (SBTi) is another framework that plays a crucial role in guiding companies toward meaningful climate action. It offers guidelines to help businesses set and achieve carbon reduction targets backed by the latest climate science. 

By adhering to these frameworks, companies can feel confident that their actions comply with the latest regulations and effectively contribute to tackling climate change.

5 ways to build a carbon reduction plan

Ready to reduce your company's carbon emissions but don't know where to start? Here are five simple ways you can begin developing an effective carbon reduction plan.

1. Start measuring carbon emissions

The first step to building a carbon reduction plan is getting a clear idea of your company’s carbon footprint. This involves tracking emissions from a range of sources. 

Consider things like what type of energy you use to power your building. How are your goods transported from A to B? What does your manufacturing process look like?

While accurately tracking emissions from all these areas can seem impossible at first, thankfully, many powerful carbon management software tools exist that can do the heavy lifting for you.

2. Set goals and targets for measurable carbon reductions

After measuring your emissions, the next step is to establish clear, achievable reduction targets. These goals should adhere to the SMART framework: Specific, Measurable, Achievable, Relevant, and Time-bound.

The nature of your carbon reduction targets will vary based on your industry, location, and company size. However, common targets for mid-market businesses often include:

• Reducing GHG emissions by a certain percentage over a certain period
• Achieving net zero emissions where the amount of GHG emitted is balanced by the amount removed from the atmosphere
• Reducing energy consumption by a certain percentage
• Transitioning to renewable energy sources like solar or wind power
• Reducing emissions throughout the supply chain
• Sustainable transportation goals such as fleet electrification or optimizing logistics
• Waste reduction and circular economy initiatives like recycling and reusing goods

3. Build an actionable carbon reduction plan

It’s now time to outline the specific steps to achieve your carbon reduction goals. This should incorporate strategies for reducing emissions covering all areas of operations – from energy efficiency improvements to better waste management.

For a step-by-step guide on developing your first carbon reduction plan, follow our straightforward five-step process.

4. Spot opportunities to reduce carbon emissions

Now’s the time to deep dive into your company’s operations to pinpoint where you can cut down on emissions.

Look at both direct emissions from your own activities (Scope 1) and indirect emissions like those from purchased electricity (Scope 2) or other value chain emissions (Scope 3) such as from materials, travel, or waste.

Upgrading to more energy-efficient appliances, improving the insulation of your building, or optimizing logistics to reduce transport emissions are some simple ways you could reduce emissions.

5. Select the right solutions

Tackling carbon emissions on your own can be tough. That’s why it’s important to take advantage of specialized tools like Coolset to help your business track, manage, and reduce your GHG emissions with ease.

Bonus tip: Periodic review and adaptation of the plan

Remember, carbon reduction is an ongoing process. That’s why it’s important to regularly review and update your plan to make sure it remains effective and relevant and adapts to new technologies, market changes, and regulatory changes.

Start building your carbon reduction plan today

Crafting a carbon reduction plan requires dedication, innovation, and a commitment to ongoing improvement. 

By following the above steps, mid-market companies like yours will not only contribute to the global fight against climate change but also unlock new opportunities for growth, efficiency, and long-term sustainability. 

Unsure where to begin? Coolset is here to help. Our user-friendly technology is designed to simplify the process of measuring, managing, and lowering your carbon footprint. Explore our platform with a free demo today.