Final Approach to Provide Assistance to
Small Businesses on GHG Emissions Management
November 2009
Background
In 2008, EPAs Climate Leaders Program developed tools and resources to help smaller companies
measure and reduce their GHG emissions. At the same time Climate Leaders began allowing "low
emitters"—companies that emit less than 10,000 metric tonnes of carbon dioxide equivalents (MTC02e)
on an annual company-wide basis—to participate in the program. Since then, approximately 70 low-
emitting companies have participated in Climate Leaders.
A growing number of small businesses are interested m the program, and EPA's aim is to assist many
small businesses effectively. Consequently, EPA has determined that a new approach would enable the
program to deliver more quality GHG management tools, technical assistance and public recognition
within existing resources. Tools and assistance will be tailored to address the specific needs of small
businesses, which are often different than the needs of large companies.
In working with small businesses, Climate Leaders seeks to accomplish the following three long-term
objectives:
1.	Reduce emissions among small businesses in the U.S. on an absolute basis.
2.	Promote accuracy and transparency in measuring and reducing emissions.
3.	Take GHG emissions management into the mainstream of small business practices.
Approach to Support Small Businesses
EPA will implement a three-pronged approach for effective delivery of tools, resources and recognition to
support small businesses in their efforts to reduce GHG emissions. This approach is designed to sustain
high growth in participation. The three elements to the approach are as follows:
X* Develop a distinct category for small businesses
For Climate Leaders, a company will be considered a small business if it meets ALL of the following
criteria:
•	Uses less than 15 million kWh of purchased electricity per year;
•	Uses less than 1 million gallons of transportation fuels per year;
•	Uses less than 2 million Therms of natural gas (200,000 MMBTUs) per year; and
•	Annual revenue is less than $200 million.
Using these thresholds to define small businesses eliminates the need for companies to conduct GHG
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inventories to determine their eligibility to join the program. See the Appendix for more information on
how EPA determined the thresholds to define small businesses.
2.	Develop a distinct "Small Business Network" within Climate Leaders and provide online tools
and trainings
Small businesses will be able to join a newly created Climate Leaders Small Business Network, which is
distinct from the traditional partnership in Climate Leaders.
Small businesses will have easy access to a more expansive Small Business page on the Climate
Leaders website with new sections for technical assistance in developing a GHG inventory, best
practices from other small businesses, references to other EPA resources, and upcoming webinars and
events.
Approximately every six weeks, small businesses will have access to technical training webinars on how
to conduct GHG inventories using Climate Leaders tools and discuss best practices on key GHG
reduction opportunities.
Small businesses will have access to online technical assistance, where they will be able to 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 small businesses.
Small businesses will be able to use a new Climate Leaders Small Business Network mark, or logo, on
their website, annual report, print media and other communications efforts. Members of the Small
Business Network would identify themselves as such and not as Climate Leaders Partners.
All low-emitting companies currently participating in Climate Leaders who have less than $200 million in
annual revenue will automatically become Members of the Small Business Network
3.	Leverage intermediary organizations to disseminate Climate Leaders GHG management tools
and technical assistance to small companies.
EPA will 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 will collaborate with existing partners to encourage their small business suppliers to
measure and reduce their GHG emissions. Small suppliers will be encouraged to join the Climate
Leaders Small Business Network and work towards achieving recognition for reducing their
emissions.
•	EPA will collaborate 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 will collaborate with trade associations for different industries to disseminate Climate
Leaders tools and encourage their small business members to join the Small Business Network.
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Joining the Small Business Network and Receiving Recognition
To join the Small Business Network, a company must:
1)	First complete an online application form, which will be available on the Climate Leaders web site
starting in January 2010.
2)	Submit a company-wide base year GHG inventory within one year of joining the Small Business
Network using EPA's Inventory Summary and Goal Tracking Form. Companies must self-attest to
the accuracy of the base year inventory. Inventories must be based on a calendar year. EPA will not
review inventories for accuracy. Members are strongly encouraged to have their GHG inventories
reviewed by an external party.
3)	Set a goal to reduce total emissions by a minimum of 5% achieved in 5 years or less. Companies
that set carbon neutral goals must sustain carbon neutrality for a minimum of 3 years after setting a
base year. Partners announcing a carbon neutral goal should expand their GHG inventory boundary
to include at least one optional emissions source, such as employee commuting, employee business
travel, product transport, or international operations. The goal must be set within one year of
joining the Small Business Network. Intensity-based goals will not be accepted. EPA will publish
Member goals on the Climate Leaders website. Members are strongly encouraged to publicly report
their aggregate company-wide emissions.
4)	Promote the Climate Leaders Small Business Network consistent with forthcoming Climate
Leaders mark guidelines in its communications efforts.
5)	At the time of goal achievement, if a Small Business Network Member wishes to receive
recognition from EPA, it must provide its base year inventory, all yearly inventory data through
the goal period, a completed Inventory Management Plan, and a narrative describing its GHG
reduction projects that led to goal achievement. All documentation must be reviewed and
validated by an external party with demonstrated knowledge of GHG accounting, using the
Climate Leaders Simplified Inventory Checklist (to be released in mid-2010). EPA is not seeking
third-party verification or external audits for Small Business Network Members' inventories.
6)	Must agree to let EPA publish its aggregate company-wide emissions from base year through
goal year using EPA's Inventory Summary and Goal Tracking Form. EPA will publish the data
on the Climate Leaders website at the time of goal achievement.
EPA will provide a Small Business Network Member with an award if:
•	The company achieves a minimum 20% reduction in absolute emissions in 5 years or less.
•	Companies that set carbon-neutral goals must sustain carbon neutrality for a minimum of 3 years
after setting a base year. Partners announcing a carbon neutral goal should expand their GHG
inventory boundary to include at least one optional emissions source, such as employee
commuting, employee business travel, product transport, or international operations.
Notes:
o All previously approved goals under Climate Leaders for previous low-emitting companies
will be grandfathered into the Small Business Network,
o Membership to the Small Business Network will be terminated for companies that do not
submit baseline inventories and set absolute goals within one year of joining the Small
Business Network.
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o New Members to the Small Business Network must use the 2008 calendar year or later as the
base year.
o Members will be eligible to use the Climate Leaders Small Business mark only after they
submit their base year inventory and set a goal,
o Below is an example of how the Small Business Network Member's information may appear
on the Climate Leaders website:
Company
Name
City, State
Join Date:
Mo/Yr.
Goal
Base year inventory
submitted? Yes/No
XYZ, Inc.
Anywhere,
State
January 2010
XYZ pledges to reduce total
GHG emissions by 5% from
2008 to 2013.
Yes
For more information on EPA's approach to working with small businesses, please contact
Verena Radulovic at Radulovic.Verena@epa.gov.
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Appendix
Determining the Thresholds for Defining Small Businesses
A representative sampling of low-emitting companies that participate in 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 for their transportation needs, and combust less 2 million Therms of natural
gas usually have fewer than 500 employees, correlating with the average SBA definition for small
businesses. Fifteen million kWh multiplied by the most recent national eGrid average (1329.35 lbs.
C02/MWh) yields approximately 10,000 MTC02e, 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 MTC02e.
The Small Business Administration's (SBA) 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. 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. However, employee count is not the best 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.
Fortune Small Business magazine defines small businesses as companies with less than $200 million in
annual revenue. Therefore, EPA will also use a revenue threshold of $200 million to determine the
definition of small businesses for Climate Leaders.
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