PROPOSED PROGRAM APPROACH FOR SMALL BUSINESSES SEPTEMBER 2009
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PROPOSED PROGRAM APPROACH FOR SMALL BUSINESSES
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SEPTEMBER 2009
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LEADERS
o Example: Company B uses 14 million KwH of purchased electricity and 500,000
gallons of gasoline in one year. Company B would be defined as a small business
because both its purchased electricity and gallons of fuel used fall, individually, under
their denoted thresholds.
B. However, if a company uses less than 15 million KwH per year, less than
1,000,000 gallons of fuel per year, or less than 2 million Therms of natural gas
per year, but does not consider itself to be a small business, it may request
Climate Leaders to apply a revenue threshold instead. Companies with more
than $35 million in annual revenue would not be considered small businesses.
Using a threshold based on electricity, fuel or natural gas usage or revenue to define
small businesses, rather than using an inventory-based emissions threshold, would
eliminate the need for companies to conduct a GHG inventory to determine their
eligibility to join the program. Tools and assistance would also be tailored to address the
specific needs of small businesses, rather than general issues faced by low emitters.
While large and small companies may encounter similar challenges and opportunities
(e.g., lease arrangements, purchasing Renewable Energy Certificates or "RECs"),
others may differ significantly.
DETERMINING THE SMALL BUSINESS THRESHOLDS
A representative sampling of low emitters that joined Climate Leaders demonstrates that
companies that purchase less than 15 million KwH of electricity per year, use less than
1,000,000 gallons of gasoline or diesel, or combust less 2 million Therms of natural gas usually
have fewer than 500 employees or less than $35.5 million in annual revenue, correlating with the
average SBA definition for small businesses. Fifteen million KwH multiplied by the most recent
national eGrid average (1329.35 Ibs. CO2/MwH) yields approximately 10,000 MTCO2e, the
threshold currently used for low emitters; 1,000,000 gallons of gasoline or diesel for heavy duty
transportation or 2 million Therms of natural gas each yields approximately 10,000 MTCO2e. In
cases where a company uses KwH, gallons of fuel, and Therms that, in aggregate, exceed
10,000 MTCO2e --and where the company's annual revenue is below $35 million- EPA will
assess the suitability of defining the company as a small business for purposes of Climate
Leaders.
The Small Business Administration's Small Business Size Standards, updated in August 2008
(http://www.sba.gov/idc/groups/public/documents/sba_homepage/guide_to_size_standards.pdf),
provides different classification measures for different sectors. The highest annual receipts size
standard in any service industry is $35.5 million. For all other industries, the highest annual
receipts size for small businesses is under $30 million. For summary information, see also
http://www.sba.qov/contractinqopportunities/officials/size/summaryofssi/index.html
SBA measures the manufacturing sector by employee count only, where the small business
denotation varies between 100 and 1500 employees, depending on the manufacturing
subsector. Employee count is not a good measure for EPA to use for Climate Leaders when
defining small businesses in the manufacturing sector because some manufacturers with few
employees may have operations with significant process emissions.
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PROPOSED PROGRAM APPROACH FOR SMALL BUSINESSES SEPTEMBER 2009
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2. Develop a distinct "Small Business Network" within Climate Leaders
Small businesses will be part of a newly-created Climate Leaders Small Business
Network, which is distinct from the regular membership of the program. The Network
would provide its members with the following support:
• Network members would have access to online technical assistance, where
they could submit questions and receive answers through an online format. As
EPA receives common inquiries, Climate Leaders can develop tailored webinars
and trainings to address similar inquiries from many Network members.
• Companies would receive technical assistance through targeted webinars, open
only to Network members. Approximately every six weeks, members would have
access to technical trainings on how to conduct GHG inventories using Climate
Leaders Low Emitters tools and/or discuss best practices among small
businesses on key GHG reduction opportunities (such as purchasing green
power, improving employee travel, and working with property managers to
reduce emissions where companies are under triple net leases).
• Companies would have easy access to a more expansive Small Business
page on the Climate Leaders web site with new sections for FAQs, best
practices and case studies, references to other EPA resources, and information
specific to Network members, such as a calendar for webinars and other
networking opportunities.
• Companies could use a new Climate Leaders Small Business Network mark, or
logo, on their website, corporate annual report, print media or other
communications efforts; members of the Small Business Network would identify
themselves as such and not as Climate Leaders Partners.
To join the Climate Leaders Small Business Network as a member, a company
would:
• Commit to develop a corporate-wide GHG inventory;
• Commit to set and achieve a goal to reduce their emissions; and
• Commit to promote the Climate Leaders Small Business Network and the
program's tools and resources to build awareness across industries.
Network members would not be required to report their inventories to EPA, though they
would be encouraged to publicly report their emissions.
EPA would provide a small business with public recognition and an award if it
met the following three conditions:
1 . Sets and achieves a carbon-neutral goal, sustained over a three-year timeframe.
Companies would need to achieve the first year of carbon neutrality within two
years of developing a base year inventory.
2. Submits to EPA for review a corporate-wide inventory for the base year and each
of the three years of carbon neutrality signed by a senior executive of the
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PROPOSED PROGRAM APPROACH FOR SMALL BUSINESSES SEPTEMBER 2009
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company attesting to the accuracy of the inventory. Companies must also agree
to publicly disclose their emissions at the aggregated, corporate level.
Demonstrates reductions through initiatives that reduce energy or fuel
consumption, such as energy efficiency or on-site renewable energy projects,
employee behavior change, combined heat and power retrofits, or other
initiatives in addition to purchasing offsets and renewable energy certificates
(RECs) to achieve carbon neutrality.
3. Leverage intermediary organizations to disseminate Climate Leaders GHG
management tools and technical assistance to small companies.
EPA can also support small businesses by working through organizations that have
ongoing communication and credibility with the small business community. Leveraging
relationships with such intermediaries also creates more champions and visibility for
Climate Leaders as other organizations promote the program's Small Business Network
to their members. Specifically,
• EPA would work with existing partners to encourage their small business
suppliers to measure and reduce their GHG emissions. Small suppliers would be
encouraged to join the Climate Leaders Small Business Network and work
towards achieving recognition for reducing their emissions. EPA would also work
with its utility partners to identify high rate payers that are small businesses and
encourage them to join the Climate Leaders Small Business Network for ongoing
technical assistance and networking opportunities.
• EPA would work with organizations that deploy technical assistance to small
manufacturers, such as the Department of Commerce's Manufacturing
Extension Partnership, to disseminate tools and trainings on GHG
measurement.
• EPA would work with trade associations for different industries to disseminate
Climate Leaders tools for low emitters and encourage their small business
members to join the Small Business Network.
Going Forward: FAQs
What if my company is already a partner and it is a small business?
All companies that are currently partners and who meet the small business criteria
outlined in the proposed approach would automatically become members of the Small
Business Network.
What happens if my company is a small business and we already set a goal with
Climate Leaders? What if we already submitted a goal but haven't yet received
EPA approval?
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PROPOSED PROGRAM APPROACH FOR SMALL BUSINESSES
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SEPTEMBER 2009
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EPA will accept all previously approved goals from small businesses for public
recognition. EPA will also review and consider goals from small businesses that have
already been submitted to EPA prior to September 25, 2009. These small businesses
have the option to commit to the carbon neutral goal instead, but are not required to do
so. Going forward, all small business members would be required to adopt the carbon
neutral goal, and its requirements, for public recognition and an award from EPA.
When will these changes take effect?
EPA anticipates implementing the new changes on January 1, 2010, taking into account
feedback received.
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PROPOSED PROGRAM APPROACH FOR SMALL BUSINESSES
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Appendix
Feedback Form
Feedback is due bv9:00om EOT, Friday, October 16, 2009.
Please email all feedback forms to Verena Radulovic at Radulovic. Verena@eDa.gov
Company:
Primary Contact Name:
Title:
Telephone:
Email:
Feedback on Climate Leaders' Proposed New Approach to Engage Small Businesses:
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