For many Canadian small and medium-sized businesses, the question of whether they need to measure their carbon footprint begins with another question:
“Are we legally required to do this?”
For many SMEs, the answer is currently no. But that may not be the most important question.
A more relevant question might be:
“Will our customers expect us to provide this information?”
Larger companies are examining the carbon emissions associated with their supply chains. As they establish sustainability objectives and reporting practices, they may need information from businesses supplying their products, materials and services.
That creates a challenge for SMEs.
A manufacturer supplying components to a multinational customer may be asked to provide information about energy consumption, production emissions or the carbon intensity of its products.
A transportation company may be asked to quantify emissions associated with delivering goods.
Even businesses without formal sustainability reporting obligations may find themselves responding to customer questionnaires or supplier assessments.
These requests are being driven by commercial relationships, not necessarily government regulation.
For Canadian SMEs, this becomes relevant when considering export diversification.
With uncertainty surrounding U.S. trade relationships, businesses are exploring opportunities in Europe and other international markets. Some prospective customers in these markets may place greater emphasis on environmental performance and supply chain transparency.
The ability to provide credible carbon information could therefore become a competitive advantage.
From a CFO perspective, this is a business risk and opportunity assessment.
What happens if a significant customer requests carbon information that we cannot provide?
Could better emissions data strengthen our position when competing for new business?
And could measuring our carbon footprint reveal opportunities to reduce operating costs?
These are questions worth considering before a customer makes a formal request.
Preparing doesn’t necessarily require an elaborate sustainability program.
Establishing a basic Scope 1 and Scope 2 emissions baseline, identifying significant Scope 3 exposures and maintaining reliable supporting records can provide a practical starting point.
For SMEs, sustainability should not be viewed exclusively as a compliance obligation.
It can also be an investment in protecting existing customer relationships and positioning the business for future growth.
Sometimes the strongest reason to measure your carbon footprint isn’t because government requires it.
It’s because your next customer might.
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