Catastrophes due to the climate crisis are causing catastrophic economic and social damages. Pakistan just went through its worst flood in history. Resulting in one-third of the country being under water, 1,100 deaths (including 400 children), and a cost of over $10 billion, while Pakistan only contributes to less than 1% of the global GHG emissions.

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Countries must come together and reduce their carbon emissions as quickly as possible to prevent a similar event from happening again. Developed countries, in particular, must take responsibility for their historical emissions and reduce their emissions even faster.

SMEs across these countries eagerly want to contribute to the fight against climate change. However, defining an effective reduction strategy to reduce emissions can be challenging, as climate science and carbon accounting are complex topics.

One sector affecting almost any company largely contributes to global emissions. In fact, transportation accounts for more than 16% of global emissions, 18% of the Netherlands’ and 26% of the European Union. Moreover, 70% of Europe’s transport CO2 emissions come from road transportation.

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So, changing how we transport ourselves and the goods we trade will be crucial to reach Net Zero emissions and avoiding future climate catastrophes.

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Benefits of reducing emissions from transport

By 2050, the EU wants to reduce transportation-related greenhouse gas emissions by 90% compared to 1990. As stated in the European Green Deal roadmap, this is an essential component of the EU’s effort to reduce CO2 emissions and reach climate neutrality by 2050. Significant changes are coming within the EU regulations, and, likely, it will greatly affect SMEs. Therefore, it is crucial that small businesses start reducing their transport-related carbon emissions.

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But there is more to gain from reducing transport emissions than solely being compliant with future EU regulations. Here are undeniable reasons why reducing transport and business travel emissions is beneficial for SMEs:

• Investors and large enterprises are paying attention to SMEs’ efforts to reduce their emissions. Implementing a reduction strategy can help exceed the competition;
• Transport still heavily relies on oil. While the world is getting increasingly tensed over fossil fuels, being more independent from oil will make businesses more resilient. Which is becoming a major factor of success for investors;
• Reducing unnecessary transport and business travel benefits small businesses’ finances by saving on increasing traveling costs;
• Employees are more willing to work for a company with a strategy to reduce its carbon footprint. As employees become more eco-aware, they refuse to use polluting means of transportation, going against their convictions (e.g., plane travel).
• Unnecessary business travel also brings down productivity. Re-thinking business travel can increase work produced and employee productivity.

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Reducing transport and business travel carbon emissions brings many benefits. But is a reduction strategy easy to implement? What actions can be taken to reduce SMEs’ transportation emissions effectively?

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How to implement an effective reduction strategy

Reducing emissions and integrating sustainability often result to be expansive and time-consuming, for poor results. However, SMEs can become the next climate leaders by implementing proven efficient climate actions to reduce their transport carbon footprint.

Encourage alternative modes of commuting

We tend to mainly focus on cars when we think about individual transportation (e.g., whether we should prefer a hybrid or an electric car). This is due to the fact that our society has become heavily car-dependent. Nevertheless, the most efficient way to reduce emissions from car transportation isn’t to go all-EV, but to rely less on cars.

Companies can have a significant impact on the modes of transportation their employees will adopt. Therefore they must encourage the use of alternatives to cars, such as:

• Cycling
• Walking
• Public transportation
• Electric scooters

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To increase the share of employees choosing to rely less on cars, companies can use multiple leverages:

• Entirely or partially finance bike purchases, from electric bikes to cargo bikes. Thanks to all these different types of bicycles, people can now cover most of their transportation needs with bikes;
• Install e-bike charging stations and bike storage for cycling employees;
• Before choosing an office, think strategically about its location and its accessibility by public transportation;
• Encourage the use of low-carbon vehicles like e-scooters or mini-cars.

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Remove unnecessary business travel

Business travel often involves air travel, which emits large amounts of carbon dioxide. Many environmentally conscious employees no longer want to take repeated air travel and increase their personal carbon footprint. Hence, companies should find ways to remove unnecessary business travel or, when possible, prefer the utilization of low-carbon modes of transportation, such as rails.

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A recent study by Deloitte confirmed that much business travel is non-business critical and could be easily replaced by technology. In addition, it also benefits companies' relationships with their employees, as employee reluctance is the second most important factor for a slow recovery in corporate travel.

Replacing air travel with trains can also be an effective way to decarbonize corporate travel. Indeed, trains are one of the least polluting modes of transportation, emitting on average between 3 and 40 times less emissions than air travel in Europe. Moreover, employees say they are more productive when they travel by train than by plane.

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Shift to electric vehicles (EVs)

Lastly, when another form of transportation isn’t adequate, companies should consider shifting from traditional vehicles to EVs, depending on the local electricity grid. Indeed, electricity can either be generated from fossil fuels such as coal, gas, or oil or by low-carbon energy sources, such as nuclear and renewables. If one charges an EV on a carbon-intensive grid, overall emissions will be comparable to driving a standard fuel vehicle. However, on a low-carbon electricity grid, EVs will emit 2 to 3 times less CO2 in their lifetime.

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A large part of a car’s carbon footprint represents the emissions resulting from manufacturing. It is even more important for electric vehicles. Therefore, preferring smaller cars to SUVs can also be an effective strategy for SMEs to reduce their carbon emissions.

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Find out how to implement an entire reduction strategy and become climate positive.

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