The concept of Environmental, Social, and Governance (ESG) was first introduced in the 2006 United Nations Principles for Responsible Investment (PRI) Report, which mandated its integration into financial evaluations of companies. In 2020, ESG gained significant attention as the World Economic Forum, International Business Council, and the Big Four accounting firms (Deloitte, PwC, KPMG, and Ernst & Young) developed standardized measurements for 22 specific metrics within an organized framework. These metrics focus on four key areas: principles of governance (led by Deloitte), planet (led by PwC), people (led by KPMG), and prosperity (led by Ernst & Young). Additionally, the inclusion of Sustainable Development Goals (SDGs) emphasises building societal impact metrics. The four pillars—principles of governance, planet, people, and prosperity—align closely with many aspects of the SDGs.

The Electric Car Scheme was born from the belief that everyone wants to make choices to achieve a net zero future. We aimed to create an easy and affordable decision for everyone to transition to net zero. Every company in the UK can support their employees on this journey by offering The Electric Car Scheme as an employee benefit. This cost-neutral benefit provides employees with the most affordable way to switch to an electric car. Implementing an EV salary sacrifice scheme at your company not only benefits employees but also enhances non-financial reporting, such as ESG or SDG metrics, by facilitating the switch from petrol or diesel cars to electric vehicles.

In this blog, we will explore how to measure and report your company's carbon emissions, with a particular focus on EV salary sacrifice schemes and how The Electric Car Scheme can assist companies in achieving this goal.

Why do carbon emissions matter?

The impact of global temperature increases includes rising sea levels and disrupted weather patterns, which threaten the safety and livelihoods of communities and habitats worldwide. Smaller businesses, which are estimated to contribute 50% of all UK business-driven emissions according to research by the British Business Bank (PDF, 210 KB), must begin the transition towards net zero. Reducing carbon emissions not only helps combat climate change but also appeals to customers. Research by Deloitte shows that a third of consumers prefer to buy from sustainable brands and services.

It is crucial for companies to report on their emissions as a step towards net zero. This awareness of the company's environmental impact enables the implementation of positive changes to reduce carbon emissions.

How to measure your company’s carbon emissions

The first step in measuring your company’s carbon emissions is to calculate its carbon footprint, which encompasses the total greenhouse gas emissions from business operations. This involves assessing emissions from various activities, including electricity usage and product transportation. Establishing a baseline, typically using data from the previous year, is essential for tracking progress. Once you have your emissions data, you can work on reducing your company’s greenhouse gas emissions by investing in renewable energy, adopting more efficient transportation methods (such as electric vehicles), and minimising waste production.

There are three categories of GHG (greenhouse gas) emissions produced by your business: processes, actions and employee behaviours.

Scope 1: Emissions created by your organisation through actions like heating systems and fuelling company vehicles.

Scope 2: Indirect emissions caused by your company, like energy bought by external sources.

Scope 3: Indirect emissions that happen due to your business activity, like the transportation of office supplies or employees travelling to and from work. This is typically the biggest category for businesses.

How to calculate Scope 1 and Scope 2 carbon emissions

To calculate scopes 1 and 2, gather records of energy consumption over the course of a year. This typically includes utility records for water, electricity, and gas, as well as plane and train tickets or fuel for company vehicles. You’ll then need to convert the records into compatible units:

Gas and electricity: Measured in kilowatt-hours (kWh) on utility bills.
Water: Measured in cubic meters, listed on utility bills.
Car travel: Measured in kilometres. If distances aren't tracked, sum fuel receipts and use a fuel calculator.
Rail or boat travel: Measured in passenger kilometres (pkm). For example, two employees on a 1,000-mile round trip equal 2,000 pkm.
Air travel: Measured in pkm, similar to rail or boat travel.

The Carbon Trust’s SME Carbon Footprint Calculator is a helpful tool to use to convert the records.

To calculate the GHG emissions associated with each activity you need to do the following calculation: Data x Emission Factor = GHG. You can then add the total GHG emission from each activity to reveal your company’s carbon footprint.

How to calculate your company’s Scope 3 carbon footprint

Calculating Scope 3 emissions can be challenging, yet they often constitute the majority of emissions. Scope 3 emissions typically stem from activities involving assets not directly owned or controlled by the reporting organization but still influenced indirectly within its value chain. Businesses have options to use the Greenhouse Gas Protocol’s calculation guidance, this includes information not included in Scope 3 Standard, like:

Methods for calculating GHG emissions for each of the 15 categories (like purchased goods and services, transportation and distribution and use of sold products),
Guidance on selecting the correct calculation methods,
Examples to demonstrate each calculation method.

Alternatively, many companies enlist environmental consultants to calculate Scope 3 emissions.

Identify opportunities to reduce your carbon emissions

Reducing carbon emissions primarily involves enhancing processes or adopting new technologies to lower emissions, especially for smaller businesses that might lack existing infrastructure. Examples include:

Improving your energy efficiency - this largely hinges on your office setup and the flexibility to make changes, such as with lighting. However, you do have control over the equipment you use.
Switching to renewable energy sources - this can be anything from solar to wind.
Improving transportation - This means fuel-efficient vehicles, encouraging carpooling, and promoting remote work. Implementing The Electric Car Scheme at your company can support these efforts by encouraging the transition to electric vehicles for a larger portion of your workforce.

Implementing and measuring changes

Once you have completed your GHG emission reporting, highlighted areas of improvement and implemented changes, you need to track progress over time. You can do this by comparing your emission data from one year to the next, which will help to identify where your emissions have increased and make subsequent changes.

Getting employees on board

Scope 3 covers various aspects of your company, with employees being a key factor. To significantly reduce your company’s carbon emissions, your employees must be committed to climate action. Here are a couple of ways to raise awareness of their carbon footprint:

Educate them on the current climate crisis,
Encourage employees to take action,
Offer incentives or a company-wide incentive - like The Electric Car Scheme.

How does The Electric Car Scheme better my company’s carbon footprint?

Every person can make a significant impact in lowering carbon emissions. Switching to an electric car is one of the biggest steps you can take as an individual to reduce your carbon footprint. By offering The Electric Car Scheme as an employee benefit, you can enable everyone at your company to make the choice to accelerate the transition to net zero. The more employees who adopt The Electric Car Scheme, the bigger impact this will have on your company’s carbon footprint.

Why does The Electric Car Scheme exist?

A direct quote from Thom Groot, CEO & Co-founder of The Electric Car Scheme, summarises this perfectly:

“Cars typically spend around 12 years on the road, covering approximately 120,000 miles in their lifetime. At The Electric Car Scheme, our focus is not on existing vehicles but on shaping the impact of new cars entering the market. Our significant influence lies in steering consumers towards opting for a new Battery Electric Vehicle (BEV) instead of a traditional Internal Combustion Engine (ICE) car.

By addressing key barriers, particularly affordability, The Electric Car Scheme facilitates a smoother transition for customers to electric vehicles, fostering an increase in demand for new electric cars. This shift in consumer preference triggers a positive cycle, driving infrastructure and manufacturing investments, subsequently accelerating innovation and uptake rates.”

Reasons to implement The Electric Car Scheme at your company

Companies can launch with confidence knowing you’re getting the best prices, first-rate protection and a trusted 5* service for you and your team. There are many positives to implementing The Electric Car Scheme at your company, here are a couple of the key reasons:

Complete Risk Protection

Last year, at The Electric Car Scheme, we conducted a study that revealed 83% of companies plan to offer an electric car salary sacrifice scheme in 2024. However, there were some misconceptions and concerns about the cost and risk to the businesses implementing these schemes. At The Electric Car Scheme, we offer Complete Risk Protection to ensure employers are protected from day one. If an employer has to make redundancies or dismiss an employee, they can do this at any time without facing a fee. It also protects the employer from any shortfall due to employee resignation, long-term sickness, or family-friendly leave.

Make your team feel rewarded

By offering this benefit you can support their personal journey to Net Zero and directly reduce your company’s carbon emissions. You can save your team £5,000 to £15,000 on the cost of their car through salary sacrifice.

Cost-neutral benefit

With no setup or running costs, The Electric Car Scheme’s fee is equivalent to your employer's tax savings, so you can roll out the scheme at no cost to your business!

Best prices available

You will access the top leasing companies to ensure the best prices are available. The best prices are required to get good employee take-up. Ask us to compare prices on any car for you.

Happy employees, healthy company

Employee happiness is at the heart of a healthy, thriving company. With The Electric Car Scheme, you can show your commitment to sustainability. Your employees will appreciate the opportunity to make a positive impact.

Straight forward reporting

It’s easy to keep your HR, Finance and Tax affairs on track. The Electric Car Scheme’s automated monthly payroll, HMRC and climate reporting help you with compliance and minimise hassle.

We also produce an annual impact report that summarises key metrics, including the number of employees enrolled in the scheme, those who have requested car quotes, cars ordered and delivered, total committed mileage, kilograms of carbon dioxide equivalent saved, and the Scope 3 carbon dioxide equivalent reduction achieved by participating in the scheme. You can see the impact we have made at The Electric Car Scheme here.

The Electric Car Scheme is the first B Corp EV salary sacrifice scheme!

In January 2024, we were proud to have been certified as a B Corp, which acknowledges our commitment to being a force for good in the world of work. But what does that actually mean? B Corps are businesses that live the highest social and environmental standards for people and the planet. To be certified as a B Corp means that we are held accountable by a recognised network and that we stay focused on our mission to help people transition to electric cars.

To become a certified B Corp, businesses must score 80 points or more. We're proud to say that we've surpassed this benchmark with a score of 104.3. But we're not stopping there – our goal is to achieve an even higher score in the future. You can learn more about our B Corp certification here.

What other green initiatives will help improve my company’s GHG emissions?

Green initiatives encompass a wide range of practices aimed at reducing a company's carbon footprint while promoting sustainability. Some examples of green initiatives include:

Recycling in the workplace: Efforts to maximise workplace recycling can significantly reduce carbon emissions and demonstrate commitment to environmental protection.

Going paperless: Implementing a paperless workflow helps save trees, cut costs, and reduce energy consumption from printing equipment.

Hybrid working schemes for staff: Implementing hybrid working can improve work-life balance and reduce the carbon footprint by reducing commuting.

You can read more about this in our blog: How are your employee benefits?