Climate leadership roundtable: Are we on the right track for a net-zero economy?
The UK Government's recent move to legislate for net-zero emissions by 2050 has been widely welcomed across the green economy - but how should businesses respond? edie recently convened a group of sustainability leaders from an array of industry sectors to discuss exactly that.
Organised in association with Centrica Business Solution, edie’s roundtable discussion explored how businesses of all sizes and sectors can adequately respond to what the Government has declared a ‘Climate Emergency', amid a somewhat turbulent time for national politics and economics.
The roundtable, hosted at the Kia Oval as part of edie’s annual Summer Lunch event, couldn’t have been timelier. It came shortly before Extinction Rebellion launched its fresh wave of summer demonstrations; amid the Conservative Party voting for a new Prime Minister; and with Brexit worries still dominating the headlines.
While these issues were inevitibly weighing on participants' minds, the group of 17 sustainability leaders and climate experts were keen to focus the discuss on one thing: The UK’s new net-zero target, and the measures which now need to be taken by business and Government to achieve it.
When Theresa May confirmed last month that she would amend the Climate Change Act to account for a net-zero target by 2050, green economy leaders came out in force to praise the decision. May’s choice was dubbed “hugely important for business”, “world-leading” and “gold standard”.
This sentiment seemed to be shared among the roundtable participants, with all in agreement that net-zero is the right trajectory – regardless of concerns surrounding exactly how each sector should get there. Indeed, several speakers noted that the net-zero legislation had either served to bolster their organisations’ existing climate strategies or spurred them to increase their ambitions.
Among them was Rolls-Royce’s group sustainability manager Rachel Everard, who said that her company’s 2030 zero-carbon target for facilities and operations had “made the business more resilient” by “putting it ahead of the curve” in terms of technology investments and minimising reputational risks. Crucially, Rolls-Royce will not be purchasing offsets through this process.
Similarly, Vodafone’s senior sustainable business manager Tom Salisbury and Multiplex Construction Europe’s sustainability director Eva Skenakou emphasised the importance of setting bold climate targets in accelerating action – regardless of whether the business has all the answers on how to meet them.
“Having targets in the 'net-zero' or ‘net-positive’ space might mean you don’t have the answers now, but it’s the right way to go,” Salisbury said, citing Vodafone’s 2025 targets to source 100% renewable electricity and halve its absolute carbon footprint. “It’s much better to have that ambition and vision to move the business out there as a tool to start collecting data or gaining buy-in, than to spend years over-analysing all the steps you’ll take.”
To this point, the participants collectively acknowledged that they were “preaching to the converted” around the table, noting that the net-zero target came after years of weak policy support for business-led decarbonisation in certain sectors – particularly the built environment and transport.
The issues of ever-changing compliance and reporting standards; a lack of policies to bring down the cost of electric vehicles (EVs); and the closures of several subsidies for renewable power, low-carbon transport and energy efficiency measures for buildings were all touted – as was the fact that the UK does not currently mandate a natural or social capital approach to account for the “true cost” of products and services.
“Generally speaking, I don’t think our politicians understand what their audience is like when it comes to supporting joined-up progress, and they certainly don’t understand the technology gaps in decarbonising transport,” Arla Foods’ energy and utility manager Bill Dickson said.
This disparity between future ambitions and past actions from the Conservative Government prompted some of the participants to ask whether net-zero was a move made by May to secure a positive legacy at the last-minute, rather than a considered and business-friendly approach.
The ‘B’ word
Aside from those concerns regarding how, exactly, business will bridge these policy gaps in a way which does not create an “unjust transition” to net-zero, a further key concern for roundtable participants was Brexit – and the multitude of uncertainties stalled discussions have caused.
Businesses with a high proportion of workers from elsewhere in the EU face losing staff, while others have begun stockpiling goods or scrambling to find new supply chain contracts, Tideway’s head of sustainability Darren White explained. 3M’s sustainability manager Romy Kenyon added that many manufacturers have begun moving production outside of the UK, while many businesses will have had to re-allocate resources to plan for no-deal or have faced trouble finalising long-term international trade agreements.
The more positive news, however, is that businesses with an ambitious and embedded approach to climate action are continuing to position long-term environmental and social benefits over short-term political uncertainty, AB Sugar’s head of advocacy Katherine Teague said.
“Brexit did stop us [from making decisions] to start with, because everyone thought there was going to be more guidance sooner, but we’ve gotten fed up with waiting,” she explained. “Sustainability has to matter, Brexit or no Brexit. This is any business’s licence to operate.”
Even for businesses that have managed to overcome policy gaps and maintain stakeholder appetite for sustainability leadership amidst the turbulent tides of Brexit, it isn’t all smooth sailing.
Several participants highlighted the difficulty in targeting net-zero when different city-regions are working towards different deadlines – 2038 for Manchester and Leeds, for example, but 2030 for Edinburgh and perhaps even sooner for Glasgow. While local authorities setting these goals does show positive ambition, Hammerson’s environment and energy manager Kate Neale explained that these non-universal targets can result in businesses having to spend more time on region-specific compliance than they are able to on long-term planning.
This concern was echoed by William Jackson Food Group’s sustainability director Gavin Milligan and Royal Mail’s head of CR Frances Fay, who both admitted that their companies had “factored in extra time and expenses” to meet local requirements, rather than altering their overall business models.
“If you're having to manage a huge logistics operations or fleet, and every city has different rules, there will be a whole wave of issues, even though the direction of travel is the right one,” Fay said. “That said, you may change entirely if the situation reaches critical mass [i.e. that most major towns and cities align their targets].”
Another recurring concern among the participants was the growth in popularity of science-based targets – a trend which has widely been welcomed as a sign of businesses aligning with climate science, but which AB Sugar’s Teague claims has now created a “waiting list” of more than 600 organisations waiting for verification by the Science-Based Targets Initiative (SBTi). Once companies have committed to having their targets verified, this must happen within two years, or the process will be void.
“If you weren’t in line at the start with companies like Mars, there’s no way of getting in now and getting a quick turnaround,” Teague said. “It’s not that we don’t care, it’s that the processes we must navigate around don’t support what we need to do in a suitable timeline.”
Hammerson’s Neale agreed, revealing that part of her company’s reasoning for pledging ‘net-positivity’ was not wanting to wait two years for SBTi approval in the face of growing demands for climate leadership and pressure from stakeholders.
As the roundtable began to draw to a close, Business in the Community’s environmental director Gudrun Cartwright (chairing) was keen to end on a positive note. After hearing about the policy gaps surrounding certain technologies, Cartwright was keen to see how others had acted as an enabler of business leadership.
Multiplex’s Gkenakou said that technology to automate for reducing energy consumption at her firms’ sites, such as self-running heating and lighting systems, had helped the company “understand what [its] priorities should be” and “eliminate the labour involved with getting hundreds or thousands of people to change behaviours.”
Capgemini’s global head of corporate sustainability James Robey and AB Sugar’s Teague also said they had reaped benefits from technologies such as automated control systems, with the former noting that these benefits could be realised on both an internal level, and by clients.
However, while expressing pride in the work done to date, Teague admitted that driving large sustainability progress through tech could soon get more challenging – particularly in developing nations where there are data gaps and social inequalities to factor in.
“Like a lot of other companies, we’ve covered the low-hanging fruit at this point, meaning that, in five years’ time, we’re going to have to start investing large numbers in big, transformational projects,” she said. “Changing your business model is going to be key but will inevitably be more expensive.”
3M’s Kenyon agreed, adding: “We can use tech to make operations more efficient, but at the end of the day we have to consume less, waste less, manufacture less, sell less and adapt to less choice.
“None of us want to do that, because it’s how we’ve made money in our global industry so far. How we are going to do good and make profits, without growing every year like our shareholders believe we’re supposed to, is the real elephant in the room.”
edie’s Earth Overshoot Day webinar
This roundtable discussion was held just weeks before Earth Overshoot Day – the day that humanity uses up all of the planet's natural resources for the year. This year, it is falling on the earliest date in history (29 July 2019).
To mark the occasion and help edie readers understand what "one-planet compatibility" should look like for their business, we are hosting a one-hour webinar on the topic. Speakers include AB Sugar's KAtherine Teague, Tesco's Mark Little, and Global Footprint Network's Mailhes.
Taking place Monday 29 July at 2pm (BST) and again hosted in association with Centrica Business Solutions, the interactive webinar will hear from businesses that are radically reinventing their business models and decoupling growth from resource consumption to advance a circular economy and operate within the means of our planet.