Carbon Emission Reduction

Legislation has been enacted by several countries, including Australia and New Zealand, to compel businesses to reduce their carbon emissions.

This means that reporting will be mandatory, and businesses will be expected to track and disclose their emissions annually, as well as have a plan in place to reduce emissions.

This requirement is already in place in New Zealand and begins in Australia in 2025.

Emissions are categorised into Scope 1, 2 and 3

Scope 1 Emissions are: Direct emissions that are owned or controlled by a company, such as fuel for your own fleet of vehicles.

Scope 2 Emissions are: Indirect emissions that are a consequence of a company’s activities but occur from sources not owned or controlled by it, such as purchased energy and utilities.

Scope 3 Emissions are: All emissions that are not covered by Scope 1 and 2, created by a company’s upstream and downstream supply chain, including downstream transport and distribution, purchased goods and services and end-of-life treatment of sold products.

Scope 3 often makes up the majority of emissions for retailers, distributors and manufacturers.

1. Understanding regulatory requirements: Know when your business will be required to report under government regulations so that you can be ready in time.
2. Creating a reporting system: Understand whether you have the right resources and skills within your business to create an accurate understanding of your current status. Two key considerations are:
   1. Data Collection – Create a system to accurately measure and record emissions and energy use.
   2. Software Solutions – Determine if you need specialised software for tracking and reporting emissions.
3. Setting goals and engaging with stakeholders: Your business needs to set targets to reduce emissions and communicate these goals to your suppliers. Engaging with your suppliers to collect data for your scope 3 emissions can be the most complex and time-consuming part of the process.
4. Undertaking projects to reduce emissions: Once you know your emissions and have set targets, it is time to take action. We can help you plan and execute projects that will not only reduce emissions but also create efficiencies and reduced costs for your business. These projects can encompass transportation, packaging, inventory management or automation.

The process can be overwhelming. We understand.

The important thing is to get started as soon as you can. It can begin with some desktop research and a quick call or email to us at Extolla. We are always happy to have a no-obligation discussion with you about where you are at on your emissions reduction journey.