June 6th, 2023.
The concept of budgeting has evolved over time, influenced by historical, economic, and political developments. From ancient resource allocation practices to the modern budgeting frameworks used by governments and organizations today, budgeting has become an essential tool for financial planning, control, and decision-making.

The urgent need to mitigate climate change has placed increasing emphasis on the concept of a “carbon allocation.” As the global community recognizes the necessity of limiting global warming to well below 2 degrees Celsius, companies are facing mounting pressure to take decisive action towards reducing their carbon emissions.

May 22nd, 2023.
Micro, small, and medium enterprises (MSMEs) play a vital role in global economies, contributing to job creation and economic growth. As per statistics from World bank, MSMEs represent 90% of businesses and more than 50% employment worldwide. Recognizing their potential to drive sustainable development, it is imperative to incentivize MSMEs to embrace climate action. However, estimating the precise carbon emission contribution from MSMEs globally on an annual basis is challenging due to variations in the size, sector, and geographical location of these enterprises.

According to a report published by the International Finance Corporation (IFC) and the World Resources Institute (WRI), small and medium-sized enterprises (SMEs), which include many MSMEs, contribute around 60% of the world’s greenhouse gas emissions. By aligning financial incentives, providing technical support mechanisms, and fostering awareness, we can empower these enterprises to become catalysts for positive environmental change.

Increasing awareness about the benefits of climate action is crucial for MSMEs. Governments, NGOs, and industry associations can conduct awareness campaigns, workshops, and training programs to educate MSME owners and employees on sustainable business practices. Sharing success stories and best practices can inspire MSMEs, highlighting the economic advantages, enhanced brand reputation, and access to new markets that result from adopting climate-friendly approaches.

By incentivizing MSMEs to embrace climate action, we can drive significant progress towards a sustainable future. Financial incentives, support mechanisms, and awareness campaigns create an enabling environment that encourages MSMEs to implement green practices. Through their collective efforts, MSMEs can contribute to mitigating climate change, fostering resilience, and creating a more sustainable and inclusive economy.

May 15th, 2023.
As the world becomes increasingly aware of the impact of greenhouse gas emissions on the planet, steps to curb climate change has become paramount. The UN through the Paris Agreement in 2015 has formalized the acceptance of 196 nations worldwide to work together to achieve climate mitigation, adaptation and mobilize finance. The ultimate objective is to reach Net Zero, which refers to a state in which the greenhouse gases going into the atmosphere are balanced by removal out of the atmosphere.

In order to get to Net Zero, all companies, organizations and citizens will need to do their part by massively reducing their carbon footprints (CFPs). A carbon footprint is the total greenhouse gas (GHG) emissions caused by an individual, organization, service, place or product, and other activities expressed as carbon dioxide equivalent (CO2e). Greenhouse gases, including the carbon-containing gases carbon dioxide and methane, can be emitted through the burning of fossil fuels, land clearance, and production and consumption of food, manufactured goods, materials, wood, roads, buildings, transportation and other services. In order to ensure a standard framework for measurement and managing greenhouse gas emissions, the GHG protocol was established in 1998. An initial step towards climate action can be taken as follows:

1. Identify the scope: The first step is to identify the scope of the carbon footprint assessment. This involves defining the boundaries of the assessment, such as the company’s operations, supply chain, and products or services. Then identify the three scopes of emissions defined by the Greenhouse Gas Protocol, which are:
   • Scope 1 emissions: direct emissions from sources that are owned or controlled by the company, such as fuel combustion in boilers or vehicles.
   • Scope 2 emissions: indirect emissions from the consumption of purchased electricity, heat, or steam.
   • Scope 3 emissions: indirect emissions from sources that are not owned or controlled by the company, but are related to its activities, such as emissions from the production of purchased goods and services, employee commuting, or waste disposal.
2. Collect data: Collect data on the company’s energy consumption, fuel use, transportation, waste generation, and other relevant factors. This can be done through internal data collection, supplier questionnaires, and third-party data sources.
3. Calculate emissions: Use a carbon footprint calculator or emissions factor database to convert the data into greenhouse gas emissions. The emissions factors, are standardized factors that convert activity data into emissions, to calculate emissions for each scope. For example, the company can use emission factors to calculate CO2 emissions from the combustion of a certain amount of natural gas. This will give an estimate of the company’s carbon footprint. Some sources of such information are:
   1. Government agencies: Many government agencies publish emission factors for different sectors and activities, such as the US Environmental Protection Agency (EPA) or the UK Department for Business, Energy and Industrial Strategy (BEIS).
   2. Industry associations: Industry associations may also provide emission factors and other data relevant to specific sectors, such as the International Aluminum Institute or the World Steel Association.
   3. Carbon calculators: There are various online carbon calculators that provide emission factors for different activities and sectors, such as the CoolClimate Network or Carbon Trust.
   4. Emissions databases: Emissions databases, such as the Emissions & Generation Resource Integrated Database (eGRID) or the European Environment Agency (EEA) greenhouse gas emissions database, provide information on the emissions of different energy sources.
   5. Third-party consultants: Companies can also work with third-party consultants or experts who specialize in carbon footprint analysis to identify and use the most appropriate emission factors for their specific activities and locations.
   6. When selecting emission factors, it is important to ensure that they are appropriate for the specific activity or sector being measured and that they are based on the most up-to-date data and scientific knowledge. It is also important to consider the location of the activity and the specific sources of energy being used, as emission factors can vary widely depending on these factors.
4. Analyze the results: Analyze the results to identify the main sources of emissions and the areas where the company can make the most significant reductions. This can be done using charts, graphs, and other data visualization tools.
5. Set targets: Set targets for reducing the company’s carbon footprint based on the analysis. The targets should be ambitious but achievable, and should align with the company’s overall sustainability goals.
6. Develop a plan: Develop a plan for achieving the targets, including specific actions to be taken, timelines, and responsibilities. The plan should be integrated into the company’s overall sustainability strategy and should involve all relevant stakeholders.
7. Monitor progress: Regularly monitor progress towards the targets, and adjust the plan as necessary. This will help the company to stay on track and identify areas for further improvement.
8. Report and communicate: Report on the company’s carbon footprint and progress towards the targets, and communicate this information to stakeholders, including employees, customers, investors, and regulators. This will help to build trust and credibility, and demonstrate the company’s commitment to sustainability. Global frameworks that can be adopted are:
   1. Task Force on Climate-related Financial Disclosures (TCFD): This is a framework developed by the Financial Stability Board to help companies identify and disclose climate-related financial risks and opportunities. It provides guidance on the governance, strategy, risk management, and metrics and targets related to climate change.
   2. Global Reporting Initiative (GRI): This is a framework for sustainability reporting that includes guidance on climate-related reporting. The GRI provides a set of indicators that companies can use to report on their greenhouse gas emissions, energy consumption, and other environmental impacts.
   3. Climate Disclosure Standards Board (CDSB): This is a framework that provides guidance on climate-related financial disclosures. The CDSB encourages companies to report on their climate-related risks and opportunities in a way that is transparent, comprehensive, and decision-useful for investors.
   4. ISO 14064: This is a standard that provides guidance on greenhouse gas accounting and verification. It includes guidance on how to quantify and report greenhouse gas emissions, as well as how to develop and implement a greenhouse gas management system.
   5. Carbon Disclosure Project (CDP): This is a global disclosure platform that collects and disseminates information on companies’ environmental performance, including their climate change risks and opportunities. The CDP provides a standardized questionnaire that companies can use to report on their carbon emissions, energy use, and climate-related risks and opportunities.
   6. The Trustees of the IFRS Foundation formed the International Sustainability Standards Board (ISSB) on 3 November 2021 at COP26 in Glasgow, following strong market demand for its establishment. The ISSB is developing—in the public interest—standards that will result in a high-quality, comprehensive global baseline of sustainability disclosures focused on the needs of investors and the financial markets.

The total carbon emissions from companies worldwide vary from year to year depending on various factors such as global economic conditions, energy consumption, and policies implemented by different countries. According to the International Energy Agency (IEA), global energy-related CO2 emissions from the consumption of fossil fuels and other sources were 33.4 gigatons (Gt) in 2019. This includes emissions from all sectors, including industry, transport, and buildings. However, it is important to note that not all carbon emissions from companies are accounted for in this figure. For example, emissions from land use change, forestry, and agriculture are not included. In addition, some companies may not report their emissions, and the accuracy of reported emissions can vary widely.

Various efforts are being made to reduce carbon emissions from companies worldwide, such as setting carbon reduction targets, investing in renewable energy, improving energy efficiency, and adopting sustainable practices. The move to make mandatory climate reporting has been drafted in developed economies and is expected to come into force by 2025/26 and later for Small & Medium Enterprises. The success of these efforts will play a crucial role in reducing global carbon emissions and mitigating the impacts of climate change; therefore, your first step is about time!