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With the recession taking centre stage in Canada, talk of environmental sustainability and global warming seems to have shifted to the sidelines.

Many worry that the economic downturn could even be a setback in the push to go green, as companies weigh the costs of eco-friendly technologies and practices.

One business that continues to pursue green thinking is Toronto-based Environics Communications, which last June became "the first North American public relations agency to become carbon neutral," in the words of its president and CEO, Bruce MacLellan.

Becoming carbon neutral involves a detailed audit of the greenhouse-gas emissions from a company's operations — everything from office paper use to fuel and electricity consumption, from staff commutes to business travel — followed by a concerted effort to reduce those emissions.

"While we operate in the services sector, as do 80 per cent of all SMEs, and have fewer than 100 employees, the 237 tonnes of carbon we created in 2007 will never be reached again," Mr. MacLellan says. "Now imagine if even a fraction of the other one million SMEs in Canada did the same."

Along with helping the planet, Environics found that going green can be a key staffing tool for small business: Many of its new employees say the sustainability policies were an important factor in deciding to join the firm.

Mr. MacLellan was with us earlier to talk about the processing of becoming carbon neutral, and offer tips to small and medium-sized businesses on how they can do the same.

In addition to his work as head of Environics, counselling leaders in business, government and natural resources on communications and issues management, Mr. MacLellan is also a member of the steering committee of the Greening Greater Toronto initiative and has served on the Ontario board of the Nature Conservancy of Canada.

Kathryn Maloney, globeandmail.com: Welcome, Bruce, and thanks for taking the time to share your company's experiences with our readers. Before we get started with their questions, could you briefly describe why Environics decided to reduce its carbon footprint, and what was involved?

Bruce MacLellan: I have always had a strong personal interest in the environment and was seeing the mounting impact of global warming. I knew from casual conversations that our team here at Environics Communications shared the concern. If you were to find my picture in my high school graduation yearbook, I use the quote "Everyone thinks of changing the world but no one thinks of changing himself." We decided we should change.

Our first move was to convert to clean Bullfrog Power as the electricity source for our large Toronto office. We then created a team which I chaired to examine other options and hired the Pembina Institute to conduct a carbon audit of all four offices. You have to measure in order to change.

Kathryn Maloney, globeandmail.com: Did you have any difficulty getting your employees to go along with the new program, or whatever new methods they had to adopt?

Bruce MacLellan: Our team was 100-per-cent supportive in every office, as were the fellows who lead our Quebec and U.S. offices. The more we did, the more excited our team became. As one person said to me, wasting paper became a social no-no just like smoking has become in many places. On our side is the fact that our average staff age is in the mid-thirties, so it is a group that has grown up with heightened environmental awareness. They are also beginning to plan their own families. The health of the planet is a priority for us all. People were thrilled when we achieved carbon neutral status.

Duncan Noble from Ottawa writes: What percentage of your carbon footprint is related to business travel? How many employees did you have during 2007?
Also, the introduction refers to how in 2007, your company's greenhouse-gas emissions were "237 tonnes of carbon." Is this correct, or should it refer to 237 tonnes of carbon dioxide? Note that 237 tonnes of carbon would be about 869 tonnes of carbon dioxide...

Bruce MacLellan: According to the analysis from Pembina, 15 per cent of our carbon footprint was attributed to business travel. We had 89 full-time employees for the audit calendar year of 2007. Compared to some professional service firms, we do not take as many airlines flights and work mostly with clients in our local areas. That helped create a lower number.

Your second question makes me think you have a science background, and I confess to having studied economics and political science! Our greenhouse gas emissions were measured in CO2e (carbon dioxide equivalent). My understanding is CO2e is the common unit of measurement for all greenhouse gasses regulated under the Kyoto Protocol.

This means that if our business activity was responsible for the creation of both carbon dioxide and methane, the totals of methane would be converted to CO2e so that we could have a total emissions sum that would include all of our greenhouse gasses given in a single unit of measurement. My conclusion is that even arts grads can go carbon neutral!

Kristina Anne Casey from Toronto asks: Did you find there was a financial impact to going green? What was the investment from a dollar value perspective?

Bruce MacLellan: There is a mix of costs and savings, but for us the costs were higher. Because my profession is marketing, I would also not want anyone to overlook the important but intangible reputation impact of going green.

For example, we surveyed the people who joined our firm in 2008 and a majority of them said our environmental commitment was a positive factor in deciding to join us. They also said the company's environmental performance would be a factor in their ongoing satisfaction. (We are proud to note we were no. 2 on the list of Canada's 50 Best Workplaces for 2008, as published in The Globe and Mail.) We also have had great feedback from clients and client prospects.

Hard costs included paying a premium for clean electricity about 7 per cent above regular prices, paying the Pembina Institute for the audit, switching to 100-per-cent recycled paper, and buying carbon offsets at about $30 per tonne.

A reader from Toronto asks: I am very interested in making changes in my office but given the economic crisis right now, my CEO is definitely not thinking green. Do you have any advice on how I could approach this with her?

Bruce MacLellan: The fact your CEO is female may help, because a lot of research shows women are more concerned about environmental issues compared to men. But we are in tough times and you might want to start with small steps that actually save money.
For example, we instituted a mandatory double-sided printing policy for all documents and reduced our paper use by almost 40 per cent. We also implemented a program to reduce electricity consumption by turning off lights when you leave your office and setting computers to go to sleep after a few minutes idle. Once you get started, positive feedback from employees and customers might provide momentum for other steps.

Wondering in Ottawa writes: How "green" is your company in physical terms -- do you have solar heating or use recycled water, for example? Or, if your offices are rented space, how much control do you actually have over things like heating and llighting? If you don't have control of those things, and can't make them "green," do you count them in your footprint analysis? If you're renting space in a building that has inefficient windows, or the lights are on all the time, etc., then how "green" is that?

Bruce MacLellan: All four of our offices are in rented office buildings ranging from four storeys to over 20. Our largest, in Toronto, is a building built only about 20 years ago, so it is more efficient than an older property would be. We count everything in our footprint analysis.
You raise an excellent point, however, about market inefficiencies in greening commercial office space. Since landlords typically pass operating costs along to the tenants, they have little incentive to retrofit the towers in more energy-efficient ways.

Our firm is volunteering service to the Greening Greater Toronto program and one aspect of the work is to bring together major building owners with major tenants and build a consensus. Sadly, as one company we have not found landlords very willing partners in becoming greener and we spend a lot of time lobbying on everything from energy reductions to better waste diversion practices.

Alan Burke from Ottawa writes: What has been the financial impact of your initiatives? I'd expect that an energy audit alone could result in significantly reduced costs and that efficiency measures would have a positive effect.

Bruce MacLellan: At this stage I would have to say there has been a net cost rather than a net saving. Although we have audited and established measures for items such as energy consumption, it is difficult to achieve significant savings due to the issues I mentioned earlier about building landlords. We are having ongoing debates, for example, about reducing areas of excess lighting and improving efficiency in heating.

But I would also point out that Environics Communications has revenue of about $13-million and the total annual net costs of our program would not exceed $25,000 for the audit, credit purchases, environmental products, etc. Those are hard costs and do not include staff time spent. That cost is well worth the benefits for the planet and in corporate responsibility of our company.

Michael McGee from Toronto writes: Mr. MacLellan, you are to be commended for showing leadership for SMEs in this regard. You refer to performing "a detailed audit." How difficult is this? Do you need to employ outside experts? Is there a standard, recognized format one can follow? Thank you.

Bruce MacLellan: Thank you, Michael. There are a growing range of sources you can go for an audit. As mentioned, we used the Pembina Institute, an environmental not-for-profit based in Alberta. I know the Canadian Standards Association (CSA) is also offering services in the areas of audits, reductions, compliance, etc. The World Wildlife Federation is also another option. (CSA and WWF are also not-for-profits.)

Unless you happen to be an engineering firm, I would advise using outside experts for both accuracy and credibility. If we are to make carbon reduction attainable for the wide range of people and organizations, we need the help of experts because it will be too intimidating otherwise. Everyone has to be wary of "green washing" challenges, so having a thorough, credible audit is very important.

Roger Gagne from Calgary asks: Is there a place for the federal government to lead the way with small and medium-sized businesses to make the shift toward carbon neutral? If so, what are the three most important things Parliament needs to do?

Bruce MacLellan: Great question, Roger. Our provincial and federal governments have a lot of room to improve their leadership in this area. To its credit, the government of British Columbia has pledged all crown agencies will be carbon neutral by 2010 or 2011. Setting an example like this should be their first move.

I have also raised the suggestion in my Environics blog that there could be tax incentives for businesses to develop carbon-reduction plans. There is also the issue of carbon trading, which I would not pretend to fully understand. But carbon markets already exist in Europe and they are coming soon to the United States with the new administration. Canada needs to get on board with a plan. This issue also ties into the designation and available options for Gold Standard offset purchases.

Right now, a firm like ours had no choice but to spend our offset money in other countries, because the global environmental groups that set standards have a preference for developing world projects. I raised this with some of them and I think we should have local options as well, such as credits that would fund retrofits to schools or public housing in our local communities. That would make many organizations more enthusiastic about buying credits. I hope this discussion continues.

Bev Dywan from Toronto writes: Many people in my office would like to reduce their carbon footprint, but management is worried about the economy, staying afloat and prospering first and foremost. How to convince them?

Bruce MacLellan: Every business manager must operate in way that allows them to continue and grow operations. I can't disagree. I suggested some ideas in an earlier question about how to start gradually. I think it would be exciting to turn it over to a staff committee of interested people and ask for ideas that lower carbon, reduce waste and save money.

Scott Randall from Canada writes: Whenever I hear about businesses going carbon neutral my eyes glaze over ... I am a cynic for three reasons: (1) A lot of the CO2 emissions resulting from a business activity are indirectly incurred by purchasing goods and services from suppliers who may not care about going carbon neutral. This means that businesses can create the illusion of carbon neutrality by simply outsourcing more activities to places like China. (2) I have seen zero evidence that carbon credit purchases actual result in meaningful reductions in emissions ... (3) When I look at the energy system and do the math I can only conclude that a CO2 emission-free society is a technologically impossible pipedream at this time. This means that when a single business that goes "carbon neutral" it cannot possible be anything more than an accounting trick.

So I guess my question is: Why should anyone believe that claims of "carbon neutrality" are anything more than a hollow PR gesture?

Bruce MacLellan: Your comments and question are a great introduction to an important point I make on this topic: I am an entrepreneur, business founder and chief executive. I have paid profit sharing bonuses to my team for 14 out of 14 years of operation. I understand the bottom line and the importance of real numbers. I also see the cost to our planet of pollution and poor resource stewardship. So in reading your points, I would say:

1. By our purchase of clean Bullfrog Power, we are reducing the use of dirty power such as coal and building demand with real cash for the creation of additional clean power. Wind and solar farms are being built in Ontario as we speak.
2. By our purchase of credits, we are funding the construction of a wind turbine project halfway around the world that will eliminate the need to build a less clean source of energy.
3. We are satisfied to be reducing carbon today and as new technologies emerge, we will all learn what options exist for going to zero. It will not be easy or cheap. But over time, oil prices only go in one direction and change will come as that continues.

Jason Rose from Toronto writes: Hi, as the North American Representative for South Pole Carbon Asset Management, I work in the development of international carbon-offset projects ... We are the leading developer in the premium quality segment of the market through our project pipeline of "Gold Standard" projects. Achieving the Gold Standard label requires the project to not only reduce GHGs from business-as-usual levels, but also provide additional socioeconomic co-benefits. ... I am interested to learn what your opinion is on purchasing carbon offsets to achieve carbon neutrality. 

If you purchased offsets, then I would be interested to learn whether you will be employing financial metrics on the impact of achieving carbon neutrality and/or purchasing carbon offsets to the value of your company through increased brand value or as a competitive advantage. Will you measure a return on this investment? If so, then what valuation models for intangible assets or other type of financial models do you utilized. Great initiative, by the way, and congratulations.

Bruce MacLellan: Thanks for the feedback, Jason. You are clearly an expert and I would repeat my earlier remark that we have to make carbon neutrality attainable and user-friendly for ordinary people across all types of organizations. I also repeat my earlier comment about the need for domestic credit options when purchasing credits. I am glad to have helped to fund a developing world project but I would also love to help retrofit a local public school to lower its carbon footprint some day. It is important to have credible organizations providing credits and overseeing how the funds are used. It is not realistic for a SME organization in Toronto or Calgary or Halifax to be able to do this.

Regarding the brand benefits, I agree they are significant for both internal and external audiences. Our team members refer to our environmental commitment as a core value of the company. When introducing our firm to new prospects, our record always wins nods of approval. I call this one of the best investments we could make. We launched a Clean Energy and Sustainability Practice at Environics Communications on Jan. 1 and one measure of our brand will be in how much business we build in counselling clients about their own activities during this year. After six weeks, I am optimistic.

n w from Canada writes: Do you buy offsets to counter your emissions? If so, do you believe that is sustainable, and if so, will that continue to be the case if the rest of the world does the same?

Bruce MacLellan: Yes, we bought our carbon offset credits from a group called First Climate, recommended to us by Pembina. It is based in Germany with offices worldwide, including one in Washington, D.C. where we have an office. They provide access to a broad portfolio of high-quality emission reduction projects, including offset programs with Gold Standard certification.

As we reduce our carbon output, the amount and cost of credits we require will decline. As more funds are generated by credit purchases by more organizations, they will help to fund clean energy alternatives and other projects that reduce carbon.

Over time, the planet should move to clean energy, sustainable farming practices, etc. I am obviously not one of the Nobel prize-winning scientists that documented global warming but I have met one of them and I think progress can be made if we all do our part.

Karen E from Toronto asks: Can you predict what the next environmental frontier will be for Environics now that you have achieved carbon neutral status?

Bruce MacLellan: We are continuing to find ways to lower our actually carbon output and buying credits for what we can't. We also have to educate people each time we add a staff member. One important frontier is to make people more aware and comfortable with the idea of becoming carbon neutral, such as through this forum. We really hope to see our competitors get on board too. We are leading by example and happy to share.

Kathryn Maloney, globeandmail.com: Well, we're almost out of time for today, Bruce. In summary, I'm wondering if you have five or six concrete tips for small businesses that want to become more eco-friendly?

Bruce MacLellan: For other companies considering their own green plan, I would identify six key lessons we learned. Going Green requires:

1. Senior level commitment and financial support
2. Acceptance that every organization has a role in measuring and reducing pollution
3. Team engagement and participation
4. Advice and support from outside experts
5. The establishing of numbers and targets
6. Celebrating and sharing progress and success

Kathryn Maloney, globeandmail.com: Thank you for taking the time to join us today, Bruce. We've covered a lot of territory, and I'm sure you've given small business owners and their employees a lot to think about on this important topic.

Bruce MacLellan: Thanks to The Globe and Mail for hosting this discussion and to everyone for their questions. I am excited to see the interest and I am also glad to address some of the skeptics. This is an important topic!