Pilot 1: Why UK SMEs? | See Through Carbon

Pilot 1 Locale: Why UK?

Convenience: See Through Carbon is UK-based
Contacts: See Through Carbon’s network of advisors, pro bono Experts and volunteer administrators has particularly strong connections with various British public bodies, businesses, media, NGOs etc.
Resources: Sibling programmes See Through News (STN), See Through Together (STT) and See Through Games (STG) share See Through Carbon’s goal, ecosystem and resources.
Reach: The See Through Network’s global reach has been growing exponentially at around 10%/month since early 2021 and is due to pass 1,000,000 in early 2025. Around 90% of this reach is composed of See Through News’s global network of community-level Facebook Groups, moderated by volunteers, usually local.
SME Goodwill: 90% of See Through News’ Facebook groups are responsibly-moderated local ‘Notice Board’ groups serving communities of 15K-500K. Most of the posts in these groups are local businesses advertising to local customers, and local residents seeking local businesses. The prototype groups were UK-based, and many now have memberships in excess of 50% of the total population.
SME Leverage: With local businesses relying increasingly on STN-administered groups for free local advertising, the See Through network is leveraging this dependence by rewarding participation in Pilot 1 with more free ads than non-Participants. This asset is complex, unique, exclusive, and only possible due to the See Through Network’s zero-budget ecosystem.

SME numbers: Estimating how many small businesses there are in any given geographical area is a surprisingly inexact science. The OECD defines an SME as a company with up to 249 employees. A town of 40,000 may have a handful of companies with, say, 100+ employees. The local chamber of commerce may have dozens of members with, say, 10+ employees. Include every single part-time sole trader who’s invoiced once in the past year, and there could be thousands.
Biggest emitters: According to OECD research, Small and Medium Enterprises (SMEs) generate up to 70% of total global business emissions. SMEs produce twice as much carbon as big businesses.
Most neglected emitters: SMEs can’t access current carbon auditing and consultancy because they can’t – and unlikely to ever be able to – afford to pay for such services.
The’ SME paradox’: Big businesses are now required to account for their Scope 3 emissions, which largely come from their supply chain of SMEs. But being compliant requires big businesses to accurately measure their Scope 3, made up of SMEs who can’t afford to, and for whom most are not yet legally required to do their own carbon footprint reporting. This ‘SME paradox’ is an intractable problem for any commercial carbon auditing standard, and neither government subsidies nor AI can help crack this problem.
Free to Use: The only way to accurately measure SME carbon emissions is therefore to offer SMEs a free service.

Methodology: See Through Carbon describes an overview of the basic carbon accounting methodologies in a separate article. As each Pilot progresses, the website will update and add more specifics.
For Pilot 1, STC is following the GHGP carbon footprint protocol specified in the UK Government’s Carbon Reduction Plan.
Dynamic improvement: As a free, open, transparent ecosystem, See Through Carbon makes all its methodology public, publishes correspondence with regulators regarding compliance, and encourages public scrutiny. The Expert Panel determining STC methodology is motivated by accuracy, not commercial concerns about arriving at ‘acceptable’ outcomes. This enables STC to incorporate best practice, and new research, giving Pilot participants confidence they’re ‘ahead of the game’ when it comes to carbon reporting.

Comprehensive: The interlinked nature of carbon reporting, with every supplier and end user part of any customer’s Scope 3 calculation, means that in principle it doesn’t matter where to start, i.e. which entity, or connected entities, should make the initial application. Accurate calculation of any one entity’s Scope 3 emissions requires the accurate calculation of all parts of its upstream and downstream suppliers/customers.
Consistency: Ultimately, all levels and strands of any hierarchy are interconnected, and all will benefit from consistently applying the same methodology.

Having said this, Pilot 1 applicants might want to consider how best to administer the Pilot to suit SMEs. Some options:

Local Governments: as public sector bodies, UK local governments were among the first to have to comply with Carbon Reduction Plan requirements. Local governments have their own Pilot 5: UK/Public Sector, but all local governments have outreach units dedicated to SME engagement.
Trade Associations: Industrial sectors have their own targets for emissions reporting and reduction, but find it hard to compile accurate, verifiable data to demonstrate their progress, motivate their members, or apply for government subsidies or funding.
Supply chains: A unique feature of See Through Carbon’s ecosystem is its capacity to automatically aggregate supply chain data for Scope 3 reporting as a trusted 3^rd party that will not reveal commercially sensitive information, i.e. any user’s degree of dependence on its customers/suppliers This information is required in order to assign, say, a ‘fair’ proportion of a supplier’s carbon footprint to its customers on a revenue basis, but SMEs are understandably reluctant to report such data directly. Most carbon reporting regulation requires big businesses to use 3^rd-party data collectors for precisely this reason.