LATEST

Resources strategy: a good start but more action needed in 2019

18th December 2018

Reacting to the publication today of the government’s Resources and Waste Strategy for England, Nick Molho, Executive Director of the Aldersgate Group said:

“With 80% of a product’s environmental impact determined at the design stage, this Strategy is a welcome step forward in that it moves the focus of England’s resources and waste policy beyond just recycling and towards the early stages of a product’s lifecycle. We welcome in particular the intention to consult on new rules for extended producer responsibility schemes, the plan to broaden their scope to include a wider range of products as well as the intention to introduce product standards setting minimum resource efficiency criteria, which together could have a significant impact in improving the quality of products put on the market. 

The intention to take greater consideration of social and environmental impact in public procurement decisions and the potential introduction of clear eco-labels, product assurance schemes and warrantees could, subject to the final details, also play an important role in driving the demand for resource efficient products and secondary materials. We would urge the government however to also consider the role of fiscal incentives such as VAT rebates in driving consumer uptake and to exceed its goal of doubling resource productivity early as research suggests far greater improvements are possible.”

Nick Molho added: “Despite the positive sense of direction provided by this Strategy, a lot of the measures announced today are either subject to consultation or at an early exploratory stage. It will be essential for the consultations and actions referenced in the strategy to make rapid progress in 2019. Greater resource efficiency is critical to cutting waste, cutting emissions and improving the competitiveness of our economy and it is essential that the Brexit process doesn’t result in further delay to policy progress in this area [1].”

—ENDS—

[1] The Aldersgate Group was a partner on the REBus project, an EU LIFE+ funded project that demonstrated how businesses can implement resource efficient business models and thus generate, financial, material and greenhouse gas savings. The REBus project ran 30 pilot schemes across a range of market sectors in the UK and the Netherlands, including electrical and electronic products, textiles, construction and ICT. If the savings secured by these pilots were applied across the EU, resource efficient business models could secure an increase of up to £280bn GVA for the EU economy by 2030, a reduction in material demand of 184 million tonnes and a reduction in greenhouse gas emissions of 154 million tonnes CO2eq. See Aldersgate Group (June 2018) No Time to Waste: An Effective Resources and Waste Strategy and (January 2017) Amplifying Action on resource efficiency: UK edition.

RWS

European Commission shows welcome ambition to achieve net zero emissions

28th November 2018

Reacting to the publication today of the European Commission’s proposal for a strategy for long-term EU greenhouse gas emissions reductions, Nick Molho, Executive Director at the Aldersgate Group said: “We welcome the publication of the European Commission’s proposal for a long-term climate strategy and the clear vision put forward by Commissioners Maroš Šefčovič, Miguel Arias Cañete and Violeta Bulc of building a climate neutral, competitive and socially cohesive European economy by 2050. This intervention comes at a key time ahead of the Katowice summit and can play an important role in ramping up ambition amongst other key emitters. To deliver the Paris Agreement and act on the key messages from last month's IPCC report, the Commission, European Parliament and national governments must focus their attention on the highest ambition pathways in the proposal, aim to over-achieve Europe’s 2030 climate targets and introduce appropriate policy in the immediate term to put Europe on a cost-effective and economically beneficial pathway towards net zero emissions.”

Nick Molho added: “It is by setting ambitious science-based goals and supporting these with credible innovation, deployment and transition support policies that the EU and its member states can play their part in delivering the ambition of the Paris Agreement, influence international partners and ensure European businesses are well placed to compete in the global low carbon economy.”

commssion

Reactive to Secretary of State Greg Clark's speech on the Cost of Energy Review

15th November 2018

Reacting to Secretary of State Greg Clark's speech on the Cost of Energy Review, Nick Molho, Executive Director at the Aldersgate Group said: "The Secretary of State announced some important principles today that give a better sense of the government's long-term energy policy direction. However, if the UK is to have an affordable and low carbon power system, the government's upcoming policy paper needs to tackle how cheap and mature forms of renewable energy can have a route to market, how interconnection links with the EU will continue to grow after Brexit, what the carbon price trajectory will look like in the 2020s and how large consumers of electricity can be rewarded for providing flexibility services to the grid [1]."

—ENDS—

[1] UCL (2018) UK industrial electricity prices: competitiveness in a low carbon world http://www.aldersgategroup.org.uk/latest#removing-barriers-to-mature-renewables-key-to-lowering-industrial-electricity-prices

GG face

Top companies back green targets

6th November 2018

On 4th November, the Sunday Telegraph published our letter, signed by 20 business organisations, arguing that there is a strong business case for including long-term environment goals in the upcoming Environment Bill. See full text below:

Britain’s first environmental Bill in over 20 years is a unique opportunity to improve the competitiveness of the British economy and demonstrate continued environmental leadership after Brexit.

As organisations operating across multiple sectors of Britain’s economy, we believe that ambitious, well-designed and properly enforced environmental regulations make good business sense. They provide a level playing field, incentivise investment in innovation and skills, support job creation and help businesses develop commercial strengths in fast- growing areas of the world economy. We have seen this dynamic at play in, for example, the introduction of environmental regulations in the construction, waste and car manufacturing industries.

We therefore call on the Government to strengthen its 25 Year Environment Plan by introducing environmental goals in the upcoming Environment Bill. The Bill should at least set measurable targets to cover improvements to air and water quality, soil health, peatland restoration, net biodiversity gain and resource efficiency.

If supported by detailed policies and an effective environmental watchdog, this legislation would send clear signals for businesses to invest in environmental improvements and resource efficiency, and ensure that we pass on a healthy environment and competitive economy to the next generation.

Nick MolhoExecutive director, Aldersgate Group, Javier Quiñones, Country Retail Manager, Ikea UK and Ireland, Mike Barry, Director of Sustainable Business, Marks & Spencer, Stefano Agostini, CEO, Nestlé UK & Ireland, Juergen Maier, CEO, Siemens plc, Jonathan Hampson, General Manager, Zipcar UK, Peter Simpson, Chief Executive Officer, Anglian Water, Duncan Price, Partner, Sustainability, BuroHappold Engineering, Martin Casey, Director, Public Affairs Europe, CEMEX, Dale Vince, Founder, Ecotricity, Ece Ozdemiroglu, Director, eftecRichard Speak, Founder Director, Environmental Finance, Nigel Stansfield, President, Interface EMEA, Nick Lakin, Group Director of Corporate Affairs, Kingfisher plcCaroline MayHead of Safety and Environment, Norton Rose Fulbright LLP, Dr Richard AndrewsManaging Principal, Europe & Africa, Ramboll Environment and Health UK LtdDavid Palmer-JonesCEO, SUEZ Recycling & Recovery UKBevis WattsManaging Director, Triodos Bank UKRick WillmottGroup Chief Executive, Willmott DixonDavid SymonsUK Sustainability Director, WSP.

London city

Budget 2018 doesn’t live up to government’s clean growth ambitions

29th October 2018

Reacting to the Budget presented to Parliament today by the Chancellor Philip Hammond, Nick Molho, Executive Director of the Aldersgate Group said: “Despite some positive announcements on industrial energy efficiency and plastics, today’s budget – and the way in which it was presented – did little to match the commitment to clean growth the government showed during Green GB Week. The creation of an industrial energy transformation fund is welcome and targets public funding at an essential part of the economy that needs support to cut its emissions, but it would be made even more effective if combined with measures to support a renewed roll-out of onshore renewable energy to lower power prices for industry [1].”
 
Nick Molho added: “As the red book recognises today, ‘the economy of the future will be low carbon and green’ and the UK is well positioned to compete in this global transition. It is essential that the government backs its commitment to clean growth in the next Spending Review and upcoming legislation. Priorities should include introducing new regulations and fiscal incentives to accelerate energy efficiency investments in domestic and commercial buildings, accelerating the phase out of polluting vehicles and roll out of electric vehicles, providing clear visibility to investors on carbon pricing and introducing an ambitious Environment Bill with legally binding goals that drives improvements in the natural environment.”

—ENDS—

[1] UCL (2018) UK industrial electricity prices: competitiveness in a low carbon world http://www.aldersgategroup.org.uk/latest#removing-barriers-to-mature-renewables-key-to-lowering-industrial-electricity-prices

Red box

Aldersgate Group reactive to Green GB Week green finance announcements

17th October 2018

Alex White, Policy Manager at the Aldersgate Group, welcomed government’s announcements on green finance today, saying: “It's positive to see that the government is driving forwards the green finance agenda. In particular, we're encouraged that government is supporting work on the development of green finance standards and that it is considering how the growth of green finance can have real impacts on infrastructure funding. Today’s announcement on quantifying the UK’s pipeline of green infrastructure will help to demonstrate the size of the investment opportunity to the private sector, as well as the gap in planned UK infrastructure we still need to build to remain within 1.5 degrees of global warming.”

Alex White added, “Once we’ve established just how green the infrastructure pipeline is, government must provide more clarity in the coming months on the regulations and incentives that will be introduced to encourage even more green projects to fill that infrastructure gap and meet our carbon budgets, such as investment in the energy efficiency of buildings, low carbon heat, electric vehicles and the natural environment. The new Clean Growth venture capital fund announced today will be a useful tool to support investment in these less mature and complex areas. We're also pleased to see the planned engagement at regional level, to really deliver the gains from green finance across the country.”  

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UK shows welcome leadership on net zero emissions

15th October 2018

Reacting to the UK government’s announcement today that it is commissioning independent advice from the Committee on Climate Change on the setting of a net zero target, Nick Molho, Executive Director of the Aldersgate Group said: “Just a week after the publication of the IPCC report highlighting the importance of limiting temperate rises to 1.5°C, the Prime Minister and her government deserve credit for making a formal referral to the CCC to investigate how a net zero emissions target could be set in the UK. The development of such a target, which is receiving growing public and cross-party support [1], could provide significant supply chain growth and export opportunities for the UK if it is accompanied by a clear plan of action.” [2]

Nick Molho added: “In parallel with the CCC developing its advice, it is essential that the government continues progress on its Clean Growth Strategy to deliver on current climate targets. Greater policy detail is urgently needed to drive energy efficiency improvements in commercial and domestic buildings, increase the take-up of zero emission vehicles and support the growth of onshore renewable energy which is key to deliver affordable industrial power prices [3]. Targeted innovation support will also increasingly be needed to support businesses in sectors where emission cuts are more complex to achieve such as agriculture, heavy industry and long-distance transport.” 

—ENDS—

[1] Bright Blue (2018) Hotting up: Strengthening the Climate Change Act ten years on

63% of UK adults when the UK to be a global leader in tackling climate change and 64% of UK adults agree the UK should aim to cut its carbon emission to zero in the next few decades. https://brightblue.org.uk/wp-content/uploads/2018/05/Hotting-up.pdf

See also Cross-party MP joint letter on net zero emissions target ahead of 2050: https://www.theclimatecoalition.org/joint-letter

[2] The UK cut its emissions by 43% since 1990, leading the G7, and grew its economy by over 70% in the same period. With strengths in areas such as offshore wind and electric vehicle manufacturing, energy efficient building design, green financial and legal services, and ICT solutions, UK businesses have a strong basis from which to accelerate emission cuts and be at the forefront of the development of the new clean technologies and services which the world economy will increasingly demand. See Committee on Climate Change (2018) Reducing UK emissions – 2018 Progress Report to Parliament https://www.theccc.org.uk/wp-content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf

[3] UCL (2018) UK industrial electricity prices: competitiveness in a low carbon world  http://www.aldersgategroup.org.uk/latest#removing-barriers-to-mature-renewables-key-to-lowering-industrial-electricity-prices

Big ben

Aiming for net zero emissions is a major opportunity for UK plc

8th October 2018

Reacting to the publication today of the International Panel on Climate Change’s special report on 1.5 degrees, Nick Molho, Executive Director of the Aldersgate Group said: “This report from the world’s leading climate scientists is clear that there are compelling environmental, economic and social benefits to limiting the increase in global temperatures to 1.5 degrees as envisaged in the Paris Agreement. Whilst achieving such a target will require challenging emission cuts across the economy, important progress has already been made and an increase in ambition would unlock a significant innovation and investment opportunity.

The UK cut its emissions by 43% since 1990, leading the G7, and grew its economy by over 70% in the same period. [1] With strengths in areas such as offshore wind and electric vehicle manufacturing, energy efficient building design and green financial and legal services, UK businesses have a strong basis from which to accelerate emission cuts and be at the forefront of the development of the new clean technologies and services which the world economy will increasingly demand.”

Nick Molho added: “Major economies now need to increase their existing emissions reduction pledges under the Paris Agreement and adopt net zero emissions targets in line with the conclusions of the IPCC report. The Prime Minister made the right call when she announced at the UN General Assembly that the UK will be joining the Carbon Neutrality Coalition, especially as this follows growing public backing [2] and cross-party support for a net zero target. [3]

The government must now begin work towards legislating for such a target in the UK, by rapidly acting on its commitment to seek the Committee on Climate Change’s advice on how the UK can ensure its climate targets are aligned with the 1.5 degrees goal. Backed by detailed policies, such a target would accelerate investment in ultra-low emission goods, services and infrastructure and support the innovation needed to tackle emission cuts in more challenging sectors such as land management, agriculture, long-distance transport and heavy industry.”

Steve Waygood, Chief Responsible Investment Officer, Aviva Investors, said: "Aviva Investors understands the business imperative of tackling climate change. The Economist Intelligence Unit estimated that, left unabated, climate change will cost the global economy $43tn in today’s prices. This is not a risk we can afford to take.

Keeping global temperature increases to 1.5 degrees will help safeguard our investment portfolios and protect our customers savings. The long term negative financial consequences of climate change are far, far greater than the short term financial risks of transitioning to the Paris Agreement. Today’s report reiterates the need for policymakers to accelerate action to reduce carbon emissions and meet the agreed aims of the Paris Agreement.”

Gabrielle Ginér, Head of Environmental Sustainability, BT, said: “Recognising the need to limit global warming to 1.5 degrees, BT set a science-based target in line with a 1.5 degree trajectory in September 2017. Our target is to reduce the carbon emissions intensity of our operations by 87% by 2030 against a 2016/17 baseline. We welcome this report by the IPCC and hope that other organisations and policymakers will follow suit in setting 1.5 degree targets.”

Pia Heidenmark Cook, Chief Sustainability Officer, IKEA Group, said: “This latest IPCC report on climate change reinforces the urgent need for action from every part of society. The science and facts are clear and that is why IKEA has set an ambition to be climate positive by 2030, reducing more greenhouse gas emissions than what the IKEA value chain emits.

Setting stretching science based targets is essential for achieving this. We will contribute by decarbonising our energy use including electricity and heating, using zero-emissions deliveries, moving to a circular business model and enabling millions of customers and co-workers to take climate action in their everyday lives.

We firmly believe that together with other businesses joining the climate action movement, we can help to create a positive future and avoid the worst impacts of climate change.” 

Benet Northcote, Director, Corporate Responsibility, John Lewis Partnership, said: “The Paris Accord was a great moment of hope as countries came together to tackle the challenge of climate change. Today's IPCC report confirms that it is possible to achieve what we need to, but only if everyone responds with speed and ambition. It is not too late, but there can be no delay.  

Fortunately, we know what is needed and I am pleased that the John Lewis Partnership is responding in our operations and through our supply chains. We have already cut our operational emission intensity by nearly 70% since 2010 and over the coming months we will be unveiling the next stage in our plans to reduce our environmental impact and emissions even further. Waitrose & Partners continues to lead in its commitment to truly sustainable agriculture, while John Lewis & Partners is pioneering circular economy solutions that will lessen humanity's impact on the environment."

Meryam Omi, Head of Sustainability and Responsible Investment Strategy, Legal & General Investment Management, said: “Climate science is unequivocal in showing the benefits of action to finance a low-carbon future. But we have to act now. From large investors to individuals who choose their own pension fund, our option must be the one that makes sense financially and for the planet.”

Mike Barry, Director of Sustainable Business, Plan A, Marks & Spencer, said: “The IPCC continues to provide the sound science we need to make profound decisions about how we run the economy globally. It’s a powerful reminder that business as usual is unsustainable and even climate action 1.0, as inspired by COP21, is insufficient. We need to take bolder, faster action and shift our mind-set to one of embracing the inevitability and opportunity of the low carbon economy.”

Nicolas Beaumont, Senior Vice President Sustainable Development and Mobility, Michelin Group, said: “Michelin is firmly committed to the full implementation of the Paris Agreement and the subsequent necessity to limit the increase of temperatures to 1.5 degrees. Fighting climate change is essential and not an option and it is only by working together that we will be able to face this challenge. That’s why Michelin has set up its annual global summit Movin’On which aims to go from ambition to action while bringing together all stakeholders from the transport sector to invent the mobility of the future.

We welcome any initiative by the UK government to decarbonise the transport sector, by encouraging electric and hydrogen powertrains, and by ensuring the effective pricing of carbon. This will help us ensure we continue to bring to market the most effective products and services, through our continuous R&D efforts and by reducing the CO2 impact of our offerings. Now more than ever, our aim is to ensure that transport is safe, green, efficient and accessible.”

Sarah Handley, Carbon Neutral Programme Manager, Siemens plc, said: "By providing innovative technologies, Siemens is a leading partner for decarbonisation for our customers and society. We welcome the IPCC’s report on the benefits of limiting global warming to 1.5 degrees which supports the urgency of delivering the Paris Agreement goals. Siemens has set targets to achieve net zero-carbon status by 2030. We urge the government to review the UK Climate targets to help shape the low carbon economy."

Danielle Lane, UK Country Manager, Vattenfall, said: “Vattenfall strongly welcomes the IPCC’s new special report on the Paris Agreement. We are seriously concerned that the combined effect of the pledges for reduced GHG emissions in national plans to date may cause the temperature to continue to rise above 3 °C. It is vital that governments take heed of the IPCC report and let it guide them when updating their respective pledges under the Paris Agreement to ensure that these conform with global objectives.”

David Symons, UK Director of Sustainability, WSP, said: “Ambitious carbon free strategies drive business innovation and growth. That’s why the UK must continue to be a leader and why we’re challenging all our colleagues to design Future Ready buildings and transport networks – ready for the future as well as today. And business has to lead too. At WSP we’ve set a target to be carbon neutral by 2025 – because we want to do the right thing and because our colleagues want us to lead.”

—ENDS—

[1] Committee on Climate Change (2018) Reducing UK emissions – 2018 Progress Report to Parliament https://www.theccc.org.uk/wp-content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf

[2] Bright Blue (2018) Hotting up: Strengthening the Climate Change Act ten years on

63% of UK adults when the UK to be a global leader in tackling climate change and 64% of UK adults agree the UK should aim to cut its carbon emission to zero in the next few decades. https://brightblue.org.uk/wp-content/uploads/2018/05/Hotting-up.pdf

[3] Cross-party MP joint letter on net zero emissions target ahead of 2050: https://www.theclimatecoalition.org/joint-letter

UK expertise to help developing countries tackle climate change and move to cleaner energy: https://www.gov.uk/government/news/uk-expertise-to-help-developing-countries-tackle-climate-change-and-move-to-cleaner-energy?utm_source=116d819e-3284-4ce7-ba27-0f20242c25f3&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Labour announces zero net greenhouse gas emissions by 2050: http://www.itv.com/news/2018-09-24/labour-to-commit-to-zero-net-greenhouse-gas-emissions-by-2050/

IPCC

UK must accelerate transition to zero emission vehicles

11th September 2018

Coinciding with the global Zero Emission Vehicles Summit held in Birmingham today, the Aldersgate Group launches a new briefing, Driving ambition: accelerating the transition to zero emission vehicles, [1] setting out key business recommendations for rapidly cutting road transport emissions in the UK. The Group argues that to significantly cut emissions in line with climate targets and put the UK at the forefront of the zero emission vehicle industry, government must provide much greater clarity on regulations, fiscal incentives and innovation support to drive manufacturing and demand.

Transport is now the largest-emitting sector of the UK economy, accounting for 28% of UK greenhouse gas emissions in 2017, with road transport the most significant form of emissions within the sector. Hitting the UK’s current climate targets requires the transport sector to cut emissions by 46% by 2030. [2] While the need to decarbonise is urgent, the opportunities of doing so for the UK are also great. The global market for low emission vehicles could be worth £1-2tn per year by 2030, and £3.6-7.6tn per year by 2050 [3] and significantly cutting emissions from road transport would deliver air quality and health benefits. The UK is well placed to capture a significant part of this low emission vehicle global market, with just one Nissan plant in Sunderland producing a fifth of all electric vehicles sold in Europe in 2016. [4]

To seize this economic and environmental opportunity, the Aldersgate Group urges the government to:

  1. Drive consumer uptake of the cleanest vehicles by extending the plug-in car and van grants until such a time that electric vehicles reach cost parity with conventional cars, which is not expected to happen until the mid-2020s. [5] The government should also consider boosting demand further through fiscal incentives, including significant VAT cuts on the sale of zero emission vehicles.  
  2. Provide much greater clarity on how vehicle emissions are to reduce in the 2020s after the UK leaves the EU. This should include providing clarity on whether the UK will remain part of the current EU rules on car, van and HGV emission targets or whether the UK will develop its own framework to drive down emissions. The government will also need to consider regulatory measures to tackle the limited supply of zero emission vehicles on the market, such as by introducing mandatory zero emission vehicles sales targets as a backstop.
  3. Deliver an affordable, efficient and reliable charging infrastructure by accelerating roll out of charging infrastructure to support 100% electric new car and van sales by 2030 and introducing standards on smart charging. Public funding to support charging infrastructure should be targeted where the market will not deliver such as in rural areas and should include offering guarantees against the unknown cost of connecting the chargers to the electricity grid to lower investment risk.
  4. Plan now for the future by looking at how the overall efficiency of the transport system can be improved. This should include planning long-term improvements to the accessibility, affordability and reliability of public transport (including working with cities and local authorities), encouraging a shift from road freight to rail, preparing for connected and autonomous vehicles, as well as facilitating disruptor businesses such as car sharing services. This will also require developing a sustainable future road tax system.

Nick Molho, Executive Director of the Aldersgate Group said: “Significantly cutting emissions from road transport is both an urgent environmental imperative and a unique economic opportunity for the UK. We will only get there however if the government provides much greater clarity on how vehicle emissions need to reduce in the 2020s, provides stable grant and tax incentives to drive consumer demand and stands ready to take the necessary measures to ensure that manufacturers play their part in meeting the public and business demand for clean vehicles.”  
 
“If we are to fully decarbonise transport by 2050, technological changes are only part of the picture. The government also needs to plan ahead and consider the shifts in travel patterns and infrastructure needs that are required to improve the overall efficiency of the transport system, from passenger travel to freight transport.”

—ENDS—
 
The Aldersgate Group will be exploring some of wider issues involved in decarbonising the transport sector in a comprehensive report early next year. This will include planning long-term improvements to the accessibility, affordability and reliability of public transport (including working with cities and local authorities), encouraging a shift from road freight to rail, preparing for connected and autonomous vehicles, as well as facilitating disruptor businesses such as car sharing services.

[1] The briefing can be found here.
 
[2] Committee on Climate Change Progress report to Parliament 2018: https://www.theccc.org.uk/wp-content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf
 
[3] Road to Zero (2018): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/724391/road-to-zero.pdf
 
[4] Green Alliance: How the UK can lead the electric vehicle revolution (2018)
https://www.green-alliance.org.uk/How_the_UK_can_lead_the_electric_vehicle_revolution.php
 
[5] Bloomberg New Economic Forecast: Electric Vehicle Outlook 2018
https://about.bnef.com/electric-vehicle-outlook/        


Legislation is essential if businesses are to invest in the 25 Year Environment Plan

24th July 2018

Responding to the House of Commons Environmental Audit Committee (EAC)’s report today on The Government’s 25 Year Plan for the Environment, Nick Molho, Executive Director of the Aldersgate Group, said: “Contrary to a common misconception, an ambitious, well-designed and properly enforced environmental regulatory framework will deliver significant economic benefits by supporting investment in more innovative and efficient business practices, increasing private sector investment to improve the state of the natural environment and providing a level playing field for businesses across the economy. [1]

The upcoming Environment Bill is a unique opportunity to move beyond the status quo as envisaged in the 25 Year Environment Plan and set long-term goals to improve the state of the natural environment on which businesses and the economy are heavily dependent. As the EAC argues, these targets should include measurable improvements to air and water quality, soil health, biodiversity and the UK economy’s resource efficiency, be underpinned by clear milestones, and be established within a suitable advisory and reporting architecture.”

Nick Molho added: “The EAC rightly highlights that the government’s initial proposals for the governance body must be strengthened to ensure environmental protections are maintained after Brexit, particularly in terms of enforcement where the new body must have the power to take legal action against the government as a last resort. It is also right to emphasise the importance of the body directly overseeing all public bodies, as well as ensuring its independence by being accountable to and funded by Parliament in a similar way to the National Audit Office. This will ensure that the body is a truly world-leading institution as the government desires.”

[1] BuroHappold Engineering (December 2017) Help or Hindrance? Environmental regulations and competitiveness was commissioned by the Aldersgate Group and is based on business interviews studying the impacts of three key environmental regulations in the buildings (London Plan), waste (Landfill Tax) and car (EU Regulations on passenger cars) industries. It concludes that the compliance cost attached to each regulation has been more than offset by the economic benefits they have triggered. These include greater business investment in innovation and skills, better quality and performing products and infrastructure, greater business competitiveness and net job creation.

Natcap

UK must up the pace on its clean vehicles ambition

9th July 2018

Reacting to the publication today of the government’s Road to Zero Strategy, Nick Molho, Executive Director of the Aldersgate Group said:

“With transport now the largest emitting sector of greenhouse gases across the UK economy [1], the publication of the government’s Road to Zero Strategy should mark an important milestone in the UK’s efforts to tackle climate change and boost clean growth. However, despite welcome measures to support the roll out of electric vehicle charging infrastructure and innovation, this strategy fails to support the rapid pace of change that is needed to deliver climate targets and put the UK at the forefront of the global clean vehicles market [2]. Transport emissions need to reduce by at least 46% by 2030 for the UK to meet its fifth carbon budget [3], which requires a phase out of conventional petrol and diesel cars far ahead of 2040.”   

Nick Molho added: “Given the UK’s strengths in manufacturing ultra-low emissions vehicles and world leading battery research, it is essential that the government provides strong regulatory and policy support to accelerate the transition to zero emission vehicles and ensure that UK businesses are amongst the best placed to capitalise on this emerging market. This requires building on the charging infrastructure measures announced today by bringing forward the phase out date for the sale of conventional petrol and diesel vehicles, providing support for the purchase of ultra-low emission vans beyond October 2018 and cars beyond 2020, and delivering on its commitment to simplify the regime for drivers to access local charging points.”

[1] Transport accounted for 28% of UK greenhouse gas (GHG) emissions in 2017. Committee on Climate Change Progress report to Parliament 2018: https://www.theccc.org.uk/wp-content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf

[2] The global clean vehicles market is estimated to be worth up to £7.6tn by 2050 by government. The UK automotive sector employs over 160,000 people and generates £40bn in exports, accounting for 7.3% of the UK’s total exports of goods and services. UK Automotive Council 2017: https://www.automotivecouncil.co.uk/wp-content/uploads/sites/13/2017/03/UK-Automotive-Sector-Core-Briefing-March-2017.pdf

[3] Transport emissions must reduce by 46% between 2017 and 2030 for the UK to remain on a cost-effective pathway to meet its climate targets. Committee on Climate Change Progress report to Parliament 2018: https://www.theccc.org.uk/wp-content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf

used-nissan-leaf

Time for UK clean growth plans to turn into concrete policies

28th June 2018

Reacting to the publication today of the Committee on Climate Change’s 2018 Progress Report, Nick Molho, Executive Director of the Aldersgate Group said: “Despite the positive progress delivered in the power sector and ambition coming out of government, the UK is not on course to deliver its carbon budgets on time or cost effectively. Private sector investment and supply chain growth in areas such as onshore wind and energy efficiency is being hampered by a lack of clear regulations (such as binding EPC targets), fiscal incentives (such as stamp duty rebates) and market mechanisms (such as subsidy free CfDs for onshore wind). 

The vision set out in the government’s Clean Growth Strategy was a positive one but it must urgently be complemented by clear regulations and incentives that will support decarbonisation in sectors that have shown negligible progress by creating project pipelines to drive energy efficiency improvements and low carbon heat provision in buildings, and the growth of an ultra low emissions vehicles market. Without project pipelines that attract long-term business investment in innovation, supply chains and skills, the UK will miss out on its climate targets and its industrial clean growth ambitions.”   

Nick Molho added: “In the power sector, providing a route to market for onshore wind through a new competitive auction round and providing more clarity on the timing and size of future offshore wind auction rounds would do much to cut power prices for UK heavy industry and support continued cost reductions in renewable technologies.” [1]

[1] See Professor Michael Grubb and Paul Drummond (February 2018) UK industrial electricity prices: competitiveness in a low carbon world. This report set out six policy recommendations to support competitive industrial electricity pricesas the UK continues its transition to a low carbon power system including for the government to improve investment conditions for low-cost renewable energy technologies such as onshore wind.

Committee on Climate Change

No Time to Waste: the government must use Brexit to make the UK a world leader in resource efficiency

19th June 2018

Today, the Aldersgate Group launches a briefing [1] setting out recommendations for the government’s forthcoming Resources and Waste Strategy (RWS), which is expected in the autumn. No Time to Waste: An Effective Resources and Waste Strategy sets out key policy priorities to radically improve the UK’s resource efficiency and maximise the economic, societal and environmental gains that this transition will offer.

Significantly improving the efficiency with which the UK economy uses resources could deliver major benefits, in environment gains and competitiveness. Recent business trials that the Aldersgate Group has been involved in showed that greater resource efficiency could deliver a total net gain in Gross Value Added (GVA) of £76bn by 2030, whilst also improving resource security [2].

To turn this economic and environmental potential into reality, the Aldersgate Group’s briefing urges the government to:

  1. Provide clear policy direction by explicitly linking resource efficiency commitments to existing targets and updating the RWS every five years; supporting the provision of skills and access to information about resource flows for businesses
  2. Set standards to mandate greater resource efficiency in the manufacturing of products, ensuring that these are at least as stringent as those developed in the EU
  3. Establish tax incentives (such as VAT rebates) to encourage businesses to develop resource efficient goods and services and to drive consumer demand
  4. Support an effective regulatory regime for resources and waste through adequate funding for regulators and local authorities who can apply pragmatic regulations and tackle waste crime
  5. Ensure the effective implementation of the Waste Hierarchy through development of metrics that better reflect the best environmental outcome for resources
  6. Optimise producer responsibility to capture more businesses and more products, incentivise businesses to take greater responsibility for the environmental impact of their products and penalise those who fail to engage.

The government has committed to establishing the UK as a world leader in resource efficiency and to doubling resource productivity by 2050. The economy-wide benefits of resource efficiency are well documented [2] and can save businesses money, reduce reliance upon finite materials, provide insulation from materials’ price volatility, protect the natural environment from harm by the processes of material extraction and waste disposal and reduce the UK’s carbon emissions.

To secure these benefits the government’s Resources and Waste Strategy must provide a coherent policy framework that moves beyond the take-make-dispose model of waste management and recognises the need for integrated regulations, product standards and technical and financial support to drive business innovation in developing new relationships, products and processes.

Victoria Fleming-Williams, lead policy paper author and Policy Manager, Aldersgate Group, said: “Resource efficient business models are proven to generate significant financial, material, natural resource and greenhouse gas savings, all of which are essential to deliver the government’s goals in the Industrial Strategy, 25 Year Environment Plan and Clean Growth Strategy. It’s high time for resource efficiency to cease to be an overlooked area of policy and for government to use the public procurement, regulatory and fiscal levers at its disposal to make the UK economy a world-leading resource efficient economy.”

Walter Scheel, Inbound Support Manager, Cement Operations, CEMEX, said: “Adopting resource efficiency practices in the manufacturing industries is a must to stay competitive in a world of finite resources and challenging economic conditions. CEMEX is a strong supporter of the Circular Economy, with its principles embedded in its day-to-day operations and sustainability targets, by co-processing un-recyclable waste streams as alternative fuels in the cement kiln and re-using waste streams as alternative raw materials for cement production. But, the path to travel in this CE journey is still long. Support from the government, through effective regulation and promotion of cross-sectoral collaboration between industries, is required to continue with the shift in mindset to see and treat waste as commodities.”

Caroline Laurie, Head of Sustainability, Kingfisher plc, said: “We warmly welcome the Aldersgate Group’s policy paper, because resource efficiency makes good economic sense for Kingfisher and resonates strongly with what our customers want: smarter use of their cash. But we could go further and faster if we had better policy direction from government; we recommend the Aldersgate Group’s priorities are given maximum consideration.”

John Kenny, Chief Officer for Circular Economy, Scottish Environmental Protection Agency (SEPA), said: “The most successful countries in the 21st century will be resource efficient, circular economies, which function within our planet’s means to support us. Recognising the value of our waste materials and natural resources is the first crucial step in creating a truly circular economy, which keeps materials in use for as long as possible and extracts maximum value from our waste.

Environmental regulators are central to this process, which is why SEPA is actively engaging with businesses who seek innovative solutions to reuse valuable resources, in ways that ensure the environment is protected and waste criminality is prevented.”

Dr Adam Read, External Affairs Director, SUEZ Recycling & Recovery UK, said: "There is so much work to be done to overhaul the UK’s approach to resource management, but the prize will be to spur new levels of productivity and economic competitiveness. SUEZ warmly welcomes the Aldersgate Group policy paper which sets out many of the priority areas that must be tackled. Our own recent report similarly emphasises the need to consider resource management at product design stage, whilst a number of policy interventions and measures are needed to more effectively tackle the complexity of our waste streams.

We firmly believe that a combination of Extended Producer Responsibility, better data, new non-weight metrics and better labelling will allow consumers and the value chain to identify, extract, harvest and reuse materials more easily. We look forward to working closely with the government and the Aldersgate Group on this vital agenda in the coming months.”

Julia Barrett, Director, Willmott Dixon Re-Thinking Limited, said: “The RWS provides an opportunity to move on from our historic preoccupation with municipal waste to target all waste streams prioritised based on economic and environmental benefit.

By using fiscal mechanisms to change behaviour, and government procurement to demonstrate leadership, underpinned by stronger penalties for those who breach the rules, we have a real opportunity to make the UK a world leader in resource efficiency."

[1] More details can be found here.

[2] See Aldersgate Group (January 2017) Amplifying Action on resource efficiency: UK edition. Aldersgate Group was a partner on the REBus project, an EU LIFE+ funded project that demonstrated how businesses can implement resource efficient business models and thus generate, financial, material and greenhouse gas savings. The REBus project ran 30 pilot schemes across a range of market sectors in the UK and the Netherlands, including electrical and electronic products, textiles, construction and ICT. If the savings secured by these pilots were applied across the EU, resource efficient business models could secure an increase of up to £280bn GVA for the EU economy by 2030, a reduction in material demand of 184 million tonnes and a reduction in greenhouse gas emissions of 154 million tonnes CO2eq.


Realign investment decisions to avoid long-term risks

4th June 2018

Responding to the House of Commons Environmental Audit Committee (EAC)’s report today on embedding sustainability in financial decision making, Alex White, Senior Policy Officer at the Aldersgate Group said: “Financial markets are overwhelmingly geared towards maximising short-term returns, to the potential detriment of long-term value creation. [1] However, climate-related risks and pensions are both long term in nature. It is not sound financial management if up to £2tn of UK pension savers’ money [2] is being invested without a strategy to avoid the longer-term risks that could reduce the value of their savings. We therefore endorse the EAC’s recommendation to clarify that pension fund trustees must consider Environmental, Social and Governance risks as part of their fiduciary duty.”

Alex White added: “Better information on long-term risks and risk management strategies is needed to underpin a more forward-looking financial system. The current lack of sufficient, quality data about the financial impacts of climate-related risks and opportunities makes it difficult to accurately calculate investment risk and allocate capital efficiently, even with clearer guidance on fiduciary duties. 

Widespread implementation of the TCFD framework will help businesses, investors and investment intermediaries to develop long-term climate risk management strategies. To ensure comparability between sectors this should be mandatory in the medium term, with a transitional arrangement from current mandatory carbon reporting to minimise burden for reporting entities. Businesses will require greater guidance and technical assistance from government, similar to the European Commission’s proposed Corporate Reporting Lab [3], to help identify best practice and allow for initial trial and error.” 

[1] The Aldersgate Group published a report on green infrastructure investment in March 2018, Towards the new normal: increasing investment in the UK’s green infrastructure which considers changes to financial regulations to encourage long-term investment in green infrastructure and greater mandatory business disclosure of climate and environmental risks to better inform investment decisions, alongside recommendations on targeted public spending to crowd in private sector investment in complex projects and greater policy detail to deliver a cost-effective pipelines of green infrastructure projects.

[2] Converted from USD$2,868bn in 2016. Source: Willis Towers Watson (January 2017) Global Pension Assets Study 2017

[3] European Commission (8 March 2018) Action Plan: Financing Sustainable Growth COM/2018/097

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No investment pipeline without policy detail

16th May 2018

Endorsing the House of Commons Environmental Audit Committee (EAC)’s report on green finance today, the Aldersgate Group stressed that government must provide additional detail on delivering the ambition of the Clean Growth Strategy and the 25 Year Environment Plan to provide a project pipeline for investment. 

Alex White, Senior Policy Officer at the Aldersgate Group said: “There are willing investors in the green economy, but not enough projects to invest in. Boosting the pipeline of green infrastructure projects will be critical to meet the UK’s environmental goals and should be the first priority in growing green finance. Policy detail is key: as the report notes, policy changes in the last Parliament, such as the cancellation of the Zero Carbon Homes policy, has contributed drop off in bankable projects. Government must now restore investor confidence and rebuild the base of investible propositions through clear and stable policies. In particular, we look to government to set out detailed policy mechanisms for boosting private sector investment in low carbon heat, transport and natural capital. [1]  

Alex White added: “We urge the government to respond promptly to the Green Finance Taskforce recommendations and ensure green finance delivers meaningful benefits to the UK’s real economy. For example, the development of a green mortgage market must be underpinned by net zero carbon standards in new buildings and fiscal incentives to retrofit existing buildings to become more energy efficient.”  

[1] The Aldersgate Group recently published a report on green infrastructure investment, Towards the new normal: increasing investment in the UK’s green infrastructure which considers how greater policy detail in the Clean Growth Strategy and 25 Year Environment Plan can deliver cost-effective pipelines of green infrastructure projects. It also suggests changes to financial regulations to encourage long-term investment in green infrastructure, targeted public spending to crowd in private sector investment in complex projects, the issuance of a sovereign green bond to help plug the likely drop in funding from the European Investment Bank after Brexit and it greater mandatory business disclosure of climate and environmental risks to better inform investment decisions. 

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Ambitious and well-enforced environmental regulations are good for business

10th May 2018

Reacting to the publication of the government’s consultation on a new Environmental Principles and Governance Bill, Nick Molho, Executive Director of the Aldersgate Group said: “Well-designed, ambitious and properly enforced environmental regulations are essential to economic growth: they provide a stable environment for businesses to invest in, support innovation in new green solutions and products and provide a level playing field across the economy [1]. This consultation to introduce a new Bill to set out environmental principles and a new governance body with statutory underpinning is therefore a significant and positive step forward and has the potential to support improved enforcement of existing legislation and good quality policy making on the environment after the UK has left the EU.”    
 
Nick Molho added: “To maximise regulatory certainty and clarity of policy direction for business, the new Bill should set out environmental principles in legislation, be broadened to include specific environmental improvement goals linked to the delivery of the government’s 25 Year Environment Plan and should provide the new body with powers to advise government on the delivery of these goals. Environmental gains and business certainty would also be clearly enhanced if devolved administrations played a role in co-designing and owning the new environmental principles and governance body.”

[1] BuroHappold (December 2017) Help or Hindrance? Environmental regulations and competitiveness. This report explores the impacts of ambitious environmental standards on business competitiveness, skills and innovation to conclude that well-designed environmental regulations can deliver positive economic outcomes in the form of increased business investment in innovation and skills, better quality products and infrastructure, greater business competitiveness and job creation. 

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Green Finance Taskforce sets clear to-do list for government

28th March 2018

The Aldersgate Group, which sits on the Green Finance Taskforce (GFT), urges the government to rapidly implement the GFT’s recommendations published today. However, based on the findings of its recent report [1], the Group warns that these recommendations will only be fully effective if the government also provides the policy detail that is needed under the Clean Growth Strategy and 25 Year Environment Plan to create a pipeline of green infrastructure projects which can be invested in.  

Nick Molho, Executive Director at the Aldersgate Group said: “Today, the Green Finance Taskforce recommends a comprehensive set of measures which, if implemented together, will make investment in green infrastructure projects more attractive. The recommendations for government to develop a National Capital Raising Plan, increase fiscal incentives for investment in green projects, require investors to consider environmental risks and make it compulsory for businesses to disclose how they are coping with climate change risks are all critical to moving the needle on green finance. The Taskforce has suggested a wide range of actions beyond the top recommendations, which the government should consider in full.
 
However, to be fully effective, implementation of these recommendations must be accompanied by more policy detail under the Clean Growth Strategy and 25 Year Environment Plan. If we want financial institutions to ‘green’ their investments, there needs to be a pipeline of green infrastructure projects for them to invest in. This will only happen if government provides more clarity in the coming months on the regulations and incentives that will be introduced to encourage investment in the energy efficiency of buildings, on- and offshore wind, low carbon heat, electric vehicles and the natural environment.”  

[1] Aldersgate Group, Towards the new normal: Increasing investment in the UK's green infrastructure, March 2018. Following a one-year project with businesses and investors, this report identifies the key barriers to greater investment in green infrastructure in the UK and makes key recommendations for government to grow investment in green infrastructure at the speed and scale needed to meet the objectives of the Clean Growth Strategy and 25 Year Environment Plan.

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Overcoming barriers to green infrastructure investment is a major opportunity for the UK

12th March 2018

Today, the Aldersgate Group publishes a new report Towards the new normal: increasing investment in the UK’s green infrastructure. This report, which concludes a one-year research project underpinned by multiple interviews with businesses and investors, argues that overcoming the barriers currently limiting private investment in green infrastructure is essential to delivering the Government’s economic, industrial and environmental policy objectives. It sets out key recommendations for government, businesses and investors to unlock greater volumes of private investment to meet the objectives of the Clean Growth Strategy, Industrial Strategy and 25 Year Environment Plan.

This report will be launched at an event hosted by Bank of America Merrill Lynch at 11.30 on Monday 12th March [1].

Increasing private investment in green infrastructure represents a huge opportunity for the UK. It is a growing market for the professional services industry, and is a crucial way of reducing the cost of capital to meet the UK’s environmental and industrial policy objectives, presenting a significant opportunity in terms of job creation and potential exports. There is real urgency: up to £693bn investment in low carbon infrastructure will be needed by 2031 in the UK [2] to deliver policy objectives, with $90tn needed worldwide over the next 15 years [3].

To tackle the huge investment needs ahead and maximise the opportunities from a growing green investment market, this report puts forward 30 recommendations for government, business and investors. In particular, the report recommends that the UK government should:

  1. Commit to support the growth of green investment over the long term through the Clean Growth Inter-Ministerial Group, with a stated remit to boost green finance up to and beyond the delivery of the fifth carbon budget

  2. Set long-term visibility and transparency on policy direction through multi-year, cross-party frameworks, as has been the case with carbon budgets and the coal phase out, noting that after Brexit, EU-led policy drivers for investment may cease to apply. Government should build on the progress made in the Clean Growth Strategy (CGS) and 25 Year Environment Plan (25YEP) with greater policy detail to deliver ambitions, such as through measures to ensure all existing homes reach a level of energy efficiency of EPC band ‘C’ by 2030

  3. Engage a wider base of investors by establishing the potential size of the market for different infrastructure needs within the CGS, 25YEP and forthcoming Resources and Waste Strategy, such as expected spending on low carbon transport infrastructure, to help clarify the investment opportunity

  4. Expand UK reporting requirements to capture a larger set of reporting companies in the immediate term, and set a medium-term target for mandatory introduction of the recommendations from the Taskforce on Climate-related Financial Disclosures (TCFDs)

  5. Adjust financial regulations to encourage long-term investment in green infrastructure, including through introducing a legal duty for all fiduciaries (such as pension fund trustees) to consider financially material environmental and social governance (ESG) risks and considering how a green supporting factor could help address market barriers arising from capital weighting requirements

  6. Introduce flexible and smart regulation to generate reliable revenue streams for investment in newer or complex markets like natural capital and energy efficiency, including a legally binding environmental net gain approach, as promised in the 25YEP, and the resumption of a carbon price escalator from the 2020s

  7. Ensure that all planned infrastructure spending passes a ‘green’ test to avoid locked in emissions and maximise resilience against flooding and future climate-related impacts

  8. Create targeted funds with cornerstone public funding to tackle difficult or less mature investment areas, such as domestic energy efficiency and natural capital, with a requirement to leverage in private capital and recycle funds for reinvestment

  9. Embed sustainability requirements in all public procurement, including supporting local government with standardised Power Purchase Agreements and energy management services contracts

  10. Issue a sovereign green bond and municipal green bonds to help fund the delivery of the 25YEP and CGS and address a potential drop in financing from institutions such as the European Investment Bank

The report, which comes shortly ahead of the publication of the government’s Green Finance Taskforce recommendations, brings together findings from the Aldersgate Group’s year-long project on green finance with the Centre for Understanding Sustainable Prosperity (CUSP) [4].

The report is released in conjunction with four separate briefings from the Aldersgate Group, which explore in detail several of the specific barriers and solutions to key types of green infrastructure investment: Increasing investment in domestic energy efficiency; Increasing investment in commercial energy efficiency; Increasing investment in low carbon power, and; Increasing investment in natural capital, which was first published in November 2017.

Alex White, lead report author and Senior Policy Officer, Aldersgate Group, said: “Over the next three decades, the UK needs hundreds of billions of private investment in green and resilient infrastructure to meet the objectives of the Clean Growth Strategy, Industrial Strategy and 25 Year Environment Plan. But investment isn’t happening fast enough on its own. Government must catalyse action on green infrastructure investment now to move the financial system towards a new normal if we are to meet our policy goals cost effectively while maximising benefits for UK plc.

This should include making a long-term commitment to address the structural barriers to infrastructure investment in the financial system, helping establish new and profitable markets through targeted government investment in complex green infrastructure areas and, crucially, building an investment pipeline through greater clarity and visibility of future policy.”

Jane Pilcher, Group Treasurer, Anglian Water, said: “We welcome this new report from the Aldersgate Group and its call to support the growth of green investment over the long term. Anglian Water has committed to a range of ambitious environmental goals, including pledging to become a carbon neutral business by 2050. We have already reduced embodied carbon by 55% from a 2010 baseline and we aim to reach 60% carbon reduction by 2020. Based on this work we were able to issue the very first public utility sector green bond and we are pleased that this is featured as a case study in the report.”

Steve Waygood, Chief Responsible Investment Officer, Aviva Investors, said:  “At Aviva Investors we are committed to being long-term, responsible investors. We welcome this new report from the Aldersgate Group and its clear and realistic solutions to unlock greater flows of investment in low carbon infrastructure, particularly clarifying fiduciary duty and the need for mandatory introduction of the TCFD recommendations.  

We also welcome the call to use the dormant assets within the insurance and investment sectors to introduce a national financial literacy campaign to educate people about how their money is invested and how this shapes the world they retire into.  This would help create sustained demand for sustainable investment, helping to grow the UK economy on a longer term and more sustainable basis for the future.”

Tim Jackson, Director, Centre for the Understanding of Sustainable Prosperity, University of Surrey, said: “Prosperity depends on us investing wisely in a resilient, green infrastructure fit for the future. The Aldersgate Group’s new report provides the kind of visionary and yet pragmatic steps required to achieve this task. All we need now is clear-sighted governance to put these recommendations into practice, and to ensure that our financial system works in the service of a sustainable and lasting prosperity for everyone.” 

Emma Howard Boyd, Chair, Environment Agency, said: “Some businesses are already alive to the risks and opportunities presented by climate change, but not enough. The UK can show international leadership with financial innovation to counter increased risks from droughts and storms. The Government’s Green Finance Taskforce is currently discussing how to accelerate investment in resilience, so this report is timely and helpful.”

Edward Northam, European Head, Green Investment Group, said: “The UK has made extraordinary progress towards its climate goals for 2020, demonstrating private investors’ appetite for low carbon infrastructure and building a world-leading capability in green finance.

With the nation facing more demanding objectives in the next decade and beyond, this report sets out a collaborative framework for government and investors that could prove vital in managing risk, mobilising capital and securing the next generation of green infrastructure investment.”

Morten Sørensen, Senior Project Finance Specialist - Financial Solutions, MHI Vestas Offshore Wind, said: "The Aldersgate Group's report on green finance provides valuable and quick insight into the finance requirements needed to drive further growth of the UK’s low carbon technologies. These investments are significant and have long repayment horizons. At MHI Vestas Offshore Wind, we share the view that long-term planning and the right policy environment is required, such as through continued CfD auctions to attract greater private sector investment.

This report recommends solutions to bridge the gap in investment between current levels of finance and what we need to meet the UK’s climate targets, and we welcome the report’s support of offshore wind as playing a crucial role in this.”

[1] Towards the new normal: how to increase investment in the UK's green infrastructure. This event will be held from 11.30am - 1.00pm on Monday 12th March at Bank of America Merrill Lynch, 10 Newgate Street, London, EC1A 7HD. Chaired by Martin Wolf CBE, Chief Economics Commentator at the Financial Times, the event will open with introductory remarks from Abyd Karmali, Managing Director - Climate Finance at Bank of America Merrill Lynch. Panellists include Jane Pilcher, Group Treasurer, Anglian Water; Steve Waygood, Chief Responsible Investment Officer, Aviva Investors; Emma Howard Boyd, Chair, Environment Agency; Gavin Templeton, Head of Sustainable Finance, Green Investment Group; and Peter Highmore, Lead Transaction Manager - Structured Solutions, Ørsted. 

[2] Vivid Economics (October 2011) The economics of the Green Investment Bank: costs and benefits, rationale and value for money

[3] New Climate Economy (2016) The sustainable infrastructure imperative

[4] The Centre for Understanding Sustainable Prosperity is an international, multi-disciplinary research project, addressing not just the economic aspects of sustainable prosperity, but also its social, political and philosophical dimensions. Working closely with business, social enterprise, civil society and government, the Centre aims to develop pragmatic steps towards an inclusive economy that works for everyone. www.cusp.ac.uk


New surge in Aldersgate Group membership highlights growing business backing for the UK’s low carbon economy

1st March 2018

The Aldersgate Group is delighted to welcome six new members at the start of 2018: SUEZ, Ramboll, Michelin, Green Investment Group, CEMEX and Bournemouth University.

Arriving on the heels of landmark environmental commitments by the UK government in the Clean Growth and Industrial Strategies and 25 Year Environment Plan, the addition of six new members to the Aldersgate Group since the start of the year demonstrates increasing corporate recognition of the investment opportunities of the low carbon economy.

As highlighted by the Clean Growth Strategy, the UK’s low carbon economy could grow four times faster than the rest of the economy, contributing up to £170bn of exports in goods and services by 2030. [1]

The new members, all of whom have made strong commitments on the environment and low carbon growth, are drawn from a wide range of sectors including transport, manufacturing, waste, consultancy, finance and higher education, adding to the Aldersgate Group’s existing strong pan-economy membership. The cross-sector corporate commitment to ambitious low carbon policies illustrates the well-recognised link between the health of the economy and that of the environment.

Nick Molho, Executive Director, Aldersgate Group, said: “We are delighted to welcome these seven dynamic new members from across the economic spectrum whose diverse perspectives will be highly valuable to our ongoing work on climate and energy, green finance, natural capital and resource efficiency. We look forward to working with our growing membership and the UK Government in the year ahead to drive ambitious environmental policy in the UK and build a competitive low carbon economy.”

David Palmer-Jones, CEO, SUEZ recycling and recovery UK, said: “SUEZ is very pleased to join The Aldersgate Group and to contribute to its vital work. Businesses across all sectors of the UK are increasingly embracing circular economy principles to guide their commercial activities, and this is key if we want to collectively achieve resource-efficient, sustainable, low-carbon, economic growth in tandem with world-leading environmental protection. 

The UK has already made huge leaps in the past decade, shifting from a throw-away society to a culture of re-use and recycling. However, with growing pressure on saturated global secondary raw material markets, it is vital that we now quickly begin to forge a path to long-term clean growth, by carefully aligning our industrial strategies with environmental policy.”

Steve Laking, Division President, Ramboll Environment & Health, said: “Our mission is to create sustainable societies where people and nature flourish. We are in business to find solutions to our clients' most pressing needs, with improving living conditions and protecting the natural environment at the core of everything we do. We are delighted to join Aldersgate and participate in thought leadership debates to develop and strengthen the low-carbon agenda.”

John Young, Managing Director, Michelin Tyre PLC, said: “Michelin is extremely serious about its responsibility to the environment and is leading the charge in many ways when it comes to resource efficiency and the circular economy. It supports sustainable mobility initiatives across the world and hosts global sustainability events such as ‘Challenge Bibendum’ and ‘Movin’On’. By joining the Aldersgate Group Michelin hopes to bring about even greater change when it comes to issues affecting mobility and the environment.”

Edward Northam, European Head, Green Investment Group, said: “Financial innovation is central to a successful and affordable transition to a low carbon economy. We’ve already seen how the experience and capability of the UK’s green finance sector has contributed to dramatic cost reductions in offshore wind, helping establish the nation as an industry leader. The same level of enterprise has to be applied to other fronts if we want to develop a truly green and productive economy. We look forward to working as a member of the Aldersgate Group to help deliver deeper decarbonisation in the UK and internationally.”

Martin Casey, Director of Public Affairs & Communications UK & EU Public Affairs, CEMEX, said: “CEMEX is delighted to join the Aldersgate Group, whose broad cross-sectoral membership, commitment to a low-carbon and circular economy compliments well our own commitments to lower our carbon intensity and reduce emissions by managing our usage of energy and water and reducing waste generation. We look forward to engaging with the other members and the broader policy community to deliver a more sustainable future for all.”

Professor Tim McIntyre-Bhatty, Deputy Vice-Chancellor, Bournemouth University, said: “Bournemouth University has at been at the forefront of inspiring learning and advancing knowledge about sustainability and sustainable development for many years having secured millions of pounds from prestigious research funders such as the European Commission and Research Councils in the UK. Significant development of the low-carbon economy is critical to sustainably enrich society. Bournemouth University joins Aldersgate Group in order to contribute to thought leadership; adding the voice and weight of a committed advocate for sustainability from the higher education sector.”

[1] HM Government (October 2017) The Clean Growth Strategy. Leading the way to a low carbon future

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Removing barriers to mature renewables key to lowering industrial electricity prices

5th February 2018

Today, the Aldersgate Group publishes a new report written by University College London (UCL) [1], setting out what the government can do to support competitive industrial electricity prices as it delivers its Clean Growth and Industrial Strategies. The report recommends that the UK government improves investment conditions in low-cost renewable energy technologies such as onshore wind, co-ordinates investment in power generation and network infrastructure more efficiently and ensures that the UK leaves the EU in a way that supports increased interconnection with European power grids and cross-border electricity trading. 

This report, written by Professor Michael Grubb and Paul Drummond of UCL, will be launched at an event in London on Monday 5th February [2]. Professor Michael Grubb, Professor of International Energy and Climate Change Policy at UCL, is available for interview.

Coming shortly after the government has published a Clean Growth and an Industrial Strategy and is reviewing the findings of the Helm Review on energy costs, this report sets out six policy recommendations to provide competitive industrial electricity prices. These recommendations seek to capitalise on the technological revolution underway in the clean power sector to reduce system costs and better align the structure of the electricity market with the UK’s new Industrial Strategy. 

To deliver competitive industrial electricity prices and reduce the gap with prices prevailing in some continental countries, the government should consider:

  1. Removing barriers to investment in mature renewable energy projects, given that technologies like onshore wind no longer need subsidy provided the political risks are minimised. This should be coupled with a resumption of the carbon price escalator, taking effect as coal retires from the UK system in the early 2020s, so that investors have confidence that they will save on fuel and rising carbon costs (with an appropriate compensation mechanism for those electro-intensive businesses in need of support);
  2. Encouraging greater co-ordination between investments in network and generation infrastructure to avoid congestion and inefficient network development. This should be done in conjunction with a review considering how to support electro-intensive companies with network costs;
  3. Ensuring that the UK leaves the EU in a way that retains unrestricted access to the internal energy market and supports continued investment in interconnection with continental grids, which will be essential to maintain system security affordably as the UK electricity system decarbonises. Research suggests that for every 1 GW of additional interconnection, UK wholesale electricity prices could reduce by 1% to 2% [3];
  4. Facilitating cross-border industrial electricity purchases;
  5. Using the five-year review of the Electricity Market Reform and Capacity Market to help UK industrial electricity consumers benefit from providing system-related services to the electricity system, such as demand-shifting and frequency support;
  6. Establishing a long-term market of zero carbon and tradeable electricity contracts to facilitate industry access to low cost and unsubsidised sources of renewable electricity such as onshore wind. Industrial consumers holding these contracts would avoid paying the carbon price.

The fact that UK industrial electricity prices are higher compared to those in countries such as France and Germany has been well documented but this report goes further than previous analysis by considering the drivers behind the evolution of electricity prices and what policy measures can help mitigate unnecessary costs to businesses.

It finds that differences in industrial electricity prices have been driven by the fact that some of the UK’s key continental neighbours tend to be better interconnected and engage in more cross-border electricity trading, are more supportive of long-term contracts to reduce prices for electro-intensive companies, take a more strategic approach to supporting electro-intensive companies with network and policy costs and have historically integrated renewable energy on their system in a more co-ordinated – and therefore cost-effective – way than in the UK (although UK policy is now improving in this regard).

Professor Michael Grubb, UCL, said: “With costs tumbling, the clean energy revolution presents an opportunity for UK industry. But harnessing the benefits will require removing the obstacles to mature renewables including onshore wind, and helping business consumers profit from flexibility. It also means ensuring that both fossil fuels and renewables face their environmental and system costs along with developing smarter energy markets, through which industry can procure its energy efficiently with the most cost-effective renewables.”

Nick Molho, Executive Director, Aldersgate Group, said: “Electro-intensive companies have an important role to play in the UK’s transition to a low carbon economy. The government has a wide range of tools available to deliver competitively priced power to those businesses in the years ahead, such as taking a more strategic approach to network development and funding, improving industry access to low cost forms of clean energy and ensuring that Brexit does not get in the way of increased interconnection and cross-border trading with the European electricity market.”

Roz Bulleid, Head of Climate, Energy and Environment Policy, EEF – the manufacturers’ organisation, said: “UCL is to be commended on a thorough investigation of the many complex and interconnected factors driving electricity prices in the UK and on the continent. Energy intensive manufacturers have been concerned for some time about the disparities between UK prices and those paid by their direct competitors. They will be pleased at the recognition of the challenges they face even if the scale of disparity for individual companies may vary beyond the averages necessarily set out here.

As a starting point, government should commission regular assessments of this type, as already happens in some competitor countries, and launch a wider conversation about the impact a more activist approach to electricity prices could have on UK industrial competitiveness.”

Martin Casey, Director of Public Affairs and Communications, CEMEX, said: “This report provides welcomed clarity on some of the challenges facing the cement industry and also puts forward some interesting options to improve the competitiveness of electricity prices which are fundamental to the future success of cement manufacturing in Britain, and consequently to the delivery of the Government's ambitious infrastructure and house building programmes.”

Dr Robert Gross, Co-director, UK Energy Research Centre, said: “This report provides a proper explanation of why UK power prices differ from those in near neighbours. Industrial power prices are not high because Britain is overambitious on green energy but because the way the costs and benefits of clean energy are shared have tended to disadvantage heavy industry.

The report rightly recommends that the UK should push ahead with subsidy-free long term contracts for low cost renewables and encourage large customers to contract directly with generators. The report also shows that prices here are higher because we are less interconnected than our continental neighbours. Interconnection is threatened by Brexit and it is a policy priority to keep the UK in the European energy market.”

Mary Thorogood, Stakeholder Relations Adviser, Vattenfall UK, said: “The UK has a great opportunity to take advantage of its investment in home grown, clean power to deliver competitive prices for consumers and businesses. Vattenfall agrees that, as the cheapest form of generation, UK Government should look at providing a viable path to investment in onshore wind. This will enable decarbonisation at least cost whilst improving the global competitiveness of British businesses of all sizes.” 

Angus MacRae, Head of Electricity Economics, SSE, said: “SSE welcomes this new analysis of how to achieve competitive GB electricity prices whilst delivering the Government’s Clean Growth Strategy at lowest cost. Many of the report’s recommendations will benefit customers by minimising overall costs, in particular, restoring access to the CfD mechanism for the cheapest renewable technologies, ensuring that carbon is properly accounted for in electricity imports, and providing a long-term investable carbon price signal.”

Dr Richard Leese, Director - MPA Cement and Director - Industrial Policy, Energy and Climate Change, Mineral Products Association said: “This report draws attention to an important issue for mineral products producers. Energy costs remain a significant issue for small, medium and large companies alike. Some cost compensations and exemptions exist for the few and are only partial where they apply. The Government’s clear support for renewable subsidies has brought down the cost of their installation and operation, but paradoxically, delivered electricity costs continue to rise. The Government needs to delve deeper into the energy system to understand the impacts and costs of low carbon electricity delivery on the system as a whole. In doing so it needs to take action on the rising costs associated with the network and its capacity constraints.”


[1] The Aldersgate Group published today a new report from Professor Michael Grubb and Paul Drummond at University College London, UK industrial electricity prices: competitiveness in a low carbon world.

[2] Delivering competitive industrial electricity prices in a low carbon world. This event will be held from 10.00am-11.30am on Monday 5th February at RELX Group, 1-3 Strand, London, WC2N 1JR. Chaired by Aldersgate Group Executive Director Nick Molho, the event will feature keynote speaker Michael Grubb, Professor of Energy and Climate Change, at the UCL Institute for Sustainable Resources. Panellists include Roz Bulleid, Head of Climate, Energy and Environment Policy, EEF - the manufacturers’ organisation, Dr Richard Leese, Director - MPA Cement and Director - Industrial Policy, Energy and Climate Change, Mineral Products Association, Matthew Knight, Director of Energy Strategy and Government Affairs, Siemens Plc, and Mary Thorogood, Stakeholder Relations Adviser, Vattenfall UK. 

[3] National Grid (March 2014) Getting more connected: the opportunity from greater electricity interconnection


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