Case Studies of Social Innovation and Social Finance in Canada
SUMMARY
The existential threat of climate change requires all sectors of the economy to reduce their carbon footprint. Climate Smart provides easy-to-use technology coupled with training to help small businesses and non-profit organizations track their carbon use and figure out ways to reduce it. Along the way, many companies see operational savings as well.
BACKGROUND
Website: https://climatesmartbusiness.com
Headquarters: Vancouver, B.C.
Climate Smart began in 2007 as a program of Ecotrust Canada with a pilot cohort of ten British Columbia businesses and organizations. The goal was to test the viability of a service that lowered the financial and technical barriers for small and medium-sized enterprises (SMEs) to take action on climate change. The pilot was generously supported by various foundations and corporations, including the Vancity Community Foundation, Oak Foundation and Mountain Equipment Co-op. The Pembina Institute and the David Suzuki Foundation were recruited to contribute their content expertise.
In early spring 2009, Climate Smart was incorporated as a social enterprise owned by Ecotrust Canada. In 2010, Climate Smart launched the first municipally supported climate change program designed specifically for the local SME business community.
On the technology front, the Climate Smart web-based software is custom built to serve private sector businesses and non-profit organizations, and is maintained in-house. It is designed as a software tool that is user-friendly yet rigorous. It was ranked the #1 software solution for SMEs in an independent study by Carbonzero and was granted honourable mention in the 2010 Globe Award for Excellence in Emerging Technology by the Globe Foundation.
In 2015, Climate Smart was awarded a City of Vancouver Greenest City Leadership Award, for helping to make progress toward six goals of the Greenest City Action Plan. Also in 2016 Climate Smart’s Business Energy and Emissions Profile (BEEP) tool was the overall Grand Prize Winner in the MIT Climate Co-Lab contest in the ‘Smart Zero Carbon Cities Challenge’ category, chosen from over 500 proposals with 71,000 public votes cast.
CHALLENGE
UN Sustainable Development Goal(s): Goal 13: Climate Action; Goal 11: Make cities inclusive, safe, resilient and sustainable.
In order to achieve the scope and scale of change required to adequately address climate change, all business sectors must be engaged to find less carbon-intensive ways to produce and distribute goods and deliver their services. Small and medium-sized enterprises (SMEs)—the engines of our local economies—have been largely overlooked by climate change policy. This dynamic, job rich, and innovative sector can play an important role in addressing climate change and lead the transition to a prosperous, low-carbon future. But motivating these businesses to take time and invest resources into climate change solutions is challenging. SME entrepreneurs are successful because they work hard and focus intensely on business growth and success. Climate change solutions appear to be a distraction that they do not have time or money to pursue. Available tools and expensive consultants did not build the capacity for businesses to continue to reduce their carbon footprint. Government policy did not focus incentives on SMEs.
SOLUTION & INNOVATION
Climate Smart has developed user friendly and low cost software and a peer-based training program to provide SMEs with the information they need to track their carbon footprint and identify solutions. Climate Smart software was ranked the #1 software solution for SMEs in an independent study by Carbonzero and was granted honourable mention in the 2010 Globe Award for Excellence in Emerging Technology by the Globe Foundation.
Climate Smart’s innovative software is combined with training and assistance to SMEs in finding effective ways to reduce carbon emissions. As part of the transition to a low-carbon, resilient economy, Climate Smart works with a wide range of businesses — across different sectors of the economy, geographic regions, and varying in size — to help them reduce their operational greenhouse gas (GHG) emissions. This means that Climate Smart works with and certifies businesses that are leaders in environmental sustainability, and also with companies that are just beginning to consider their environmental impact. The company meets businesses ‘where they are at’ and helps them to make positive change from there.
“Working with Climate Smart has helped us develop improved systems for tracking the environmental impact of our operations, as well as incorporating those impacts into our operational and financial decision making processes. The added benefit of learning alongside other Port businesses has also proved extremely valuable, significantly reducing the cost of researching new technologies, incentives and program specific to our industry”
Jurgen Franke, Former Director of Engineering & Terminal Development, Fraser Surrey Docks
IMPACT
Since its inception in 2007, Climate Smart has worked with more than 40 host partners (e.g., local governments, financial institutions, ports and airports) to engage close to 1,000 businesses — representing approximately 85,000 employees. The result is assistance in profitably tracking and reducing their greenhouse gas (GHG, or carbon) emissions. On average, businesses that work with Climate Smart achieve an impressive 22% reduction in emissions within two years. Case studies from a sample of 98+ Climate Smart businesses show a total annual cost savings of $4.6 million.
In the last ten years, Climate Smart has helped SMEs and nonprofits track 5,141,788 tonnes of CO2 which is the equivalent of 989,946 car emissions.
“It was very important for us to work with Climate Smart to measure our emissions and create a benchmark so that we can measure whether we have truly improved. After three years of tracking emissions, we have reduced our emissions by 18% and realized a savings of more than $100,000 annually.”
Morten Schroder, VP Operations – BC, Van Houtte Coffee Services
BARRIERS
Climate Smart entrepreneurs, like all small business owners, have a full agenda and limited resources. They must develop products and services that appeal to customers; deliver high quality every day and every time; build a brand and raise capital all while running an under-resourced company that is often competing against global competitors. Motiving these entrepreneurs to spend time and money on climate change solutions is challenging. There are always more urgent problems and more critical issues to deal with.
A second barrier is the scale of carbon emission reductions that can be attained by most SMEs. Because Climate Smart clients are small businesses, they do not have the range or the depth that corporations and larger businesses do so their carbon reductions will be smaller. As a result, fewer environmental advocates are interested in building the tools that can be useful or providing the technical assistance needed to help SMEs reduce carbon emissions.
Finally, there is a scarcity of public policy incentives for the SME sector. These are the businesses that could most benefit from incentives and subsidies, yet, policy makers have largely ignored this sector in favor of larger scale interventions.