This risk assessment covers the broad emissions and operational risks SMBs may face and provides strategic focus areas for emissions reductions.
- Energy Usage (Scope 1 & 2)
- Risk: High dependency on fossil fuels, high energy costs, potential carbon taxes.
- Impact: Increased operational costs, potential non-compliance with emissions targets, reputational damage.
- Mitigation: Shift to renewable energy, energy efficiency programs, energy audits.
Transportation and Logistics (Scope 3)
- Risk: High emissions from company fleets, supply chain logistics, reliance on non-sustainable transportation.
- Impact: Increased fuel costs, regulatory pressures for emissions reduction, supply chain disruption.
- Mitigation: Transition to electric/hybrid vehicles, route optimization, carbon offsetting.
Supply Chain Emissions (Scope 3)
- Risk: Suppliers with high carbon footprints or unsustainable practices.
- Impact: Increased carbon reporting complexity, potential supply chain disruptions due to non-compliance.
- Mitigation: Supplier engagement programs, carbon footprint assessments, supply chain collaboration on sustainability.
Manufacturing and Industrial Processes (Scope 1 & 2)
- Risk: Emissions from production processes, reliance on non-sustainable materials.
- Impact: Increased compliance costs, inefficiency in production, reputational risks.
- Mitigation: Implementing cleaner production technologies, process optimization, renewable material sourcing.
Waste Generation and Disposal (Scope 3)
- Risk: High waste production, reliance on landfills, low recycling rates.
- Impact: Rising disposal costs, potential penalties for non-compliance with waste regulations.
- Mitigation: Waste minimization strategies, circular economy models, better waste management practices.
Business Travel (Scope 3)
- Risk: High emissions from air travel and non-sustainable travel options for staff.
- Impact: Increased carbon footprint from frequent travel, higher operational costs.
- Mitigation: Adoption of virtual meetings, promotion of sustainable travel options, carbon offsets for flights.
Water Usage
- Risk: High water consumption, inefficient water use in processes.
- Impact: Higher operational costs due to water scarcity, reputational risks if operating in water-stressed areas.
- Mitigation: Water conservation practices, rainwater harvesting, water reuse systems.
Packaging Materials (Scope 3)
- Risk: Use of non-recyclable or high-carbon packaging materials.
- Impact: Rising regulatory pressures, customer backlash, increased waste disposal costs.
- Mitigation: Shift to sustainable packaging materials, packaging optimization, reduction of unnecessary packaging.
Emissions from Leased Assets (Scope 3)
- Risk: Carbon emissions from leased office spaces, warehouses, or vehicles.
- Impact: Compliance risk, high operational emissions, landlord’s lack of sustainability practices.
- Mitigation: Engage with landlords on sustainability initiatives, energy efficiency retrofits, review leasing agreements for sustainability clauses.
IT Infrastructure and Data Centers (Scope 2)
- Risk: High energy use from data centers, inefficient IT equipment.
- Impact: Increased operational costs, high carbon footprint from energy-intensive systems.
- Mitigation: Cloud-based solutions with renewable energy commitments, server consolidation, energy-efficient IT practices.
Product Lifecycle and End-of-Life Emissions (Scope 3)
- Risk: High emissions from the use and disposal of products.
- Impact: Customer dissatisfaction, environmental regulations, higher product costs.
- Mitigation: Design for sustainability, promote product recycling, take-back programs.
Employee Commuting (Scope 3)
- Risk: High emissions from staff commuting, reliance on private vehicles.
- Impact: Increased Scope 3 emissions, limited company control over commuting patterns.
- Mitigation: Incentives for public transport, carpooling, remote work options, providing EV charging stations.
Carbon Emissions from Raw Material Extraction (Scope 3)
- Risk: Reliance on carbon-intensive raw materials.
- Impact: Higher input costs, supply chain instability due to environmental regulation.
- Mitigation: Source from low-carbon suppliers, material substitution, recycling initiatives.
Refrigerants and Other F-Gases (Scope 1)
- Risk: Use of high global warming potential (GWP) refrigerants.
- Impact: Regulatory penalties, high emissions factors, equipment leaks.
- Mitigation: Regular maintenance, shift to low-GWP alternatives, phase-out programs for high-emission refrigerants.
