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Business needs long-term support to deliver €324bn circular economy opportunity

14th December 2017

A new report from the Aldersgate Group out today, Beyond the Circular Economy Package, argues that EU institutions should continue to support the shift towards greater resource efficiency beyond the completion of the Circular Economy Package.

By introducing a range of new business case studies drawn from several sectors of the EU economy, the report shows that businesses and public organisations are investing significantly in resource efficiency but that the transition to a more circular and competitive economy will take time and requires long-term policy support.  

This report will be launched at an event in Brussels on 14th December with keynote speaker Jyrki Katainen, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness [1].

The new research [2] published by the Aldersgate Group includes a range of business trials and case studies across several sectors of the economy. Some of these include pilot projects carried out under the REBus project [3], which at the end of 2016 saw 28 resource efficiency business pilot projects deliver €5.62m in financial savings and a reduction of materials consumption and greenhouse gas emissions by 62,619 tonnes and 1,953 tonnes, respectively.

These pilot projects have been carried out across a range of key market sectors (including electrical and electronic products, textiles, construction and ICT) that are worth an estimated €350bn to the EU economy. Research carried out as part of the project found that adopting the resource efficiency business models tested by these business pilots across their respective economic sectors could increase the EU economy’s gross value added by up to €324bn by 2030 [4].

Whilst the resource productivity of the EU economy is improving overall [5], the report shows that businesses often face a number of barriers to taking greater action, ranging from regulatory obstacles and a lack of effective market signals to difficulties in obtaining finance or technical advice to drive innovation. 

Nick Molho, Executive Director of the Aldersgate Group said: “The Circular Economy Package is delivering welcomed progress on some of the barriers that are slowing down business action on resource efficiency. However, an economy-wide shift to much greater resource efficiency will take time. To invest in new business models, more resource efficient processes and new supply chains, businesses need the assurance that the resource efficiency agenda will remain a priority for the EU in the long term.”  

Building on the progress that has been made to date by the Circular Economy Package, the report identifies six key areas of long-term policy action for the Commission and its co-legislators, including:

  1. Pursuing work to include resource efficiency design criteria in product standards by delivering on the commitment to publish an updated Ecodesign Working Plan once a year and rapidly broadening the range of products subject to resource efficiency design criteria;

  2. Promote business innovation on resource efficiency, through continued financial support for business trials and broadening the sectors that receive technical support through the Commission’s Innovation Deals;

  3. Expand the use of circular economy criteria in the public procurement of a broadening range of products and encourage their application across EU Member States and EU institutions;

  4. Encourage Member States to develop pricing mechanisms that support material re-use where it is environmentally effective to do so;

  5. Ensure a consistent implementation of the Circular Economy Package in different Member States. This is especially important in terms of the improved definitions of “waste” currently being negotiated by all three EU institutions, which must ensure that materials are no longer classified as “waste” when they can be re-used safely.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The transformation towards more resource efficient business models is not a matter of choice but a necessity for retaining competitiveness. With the comprehensive Circular Economy Action Plan, the European Commission intended to address the key regulatory and financial challenges to facilitating this transition. But this is just the beginning. The move to a more resource efficient economy calls for an ambitious policy framework beyond the Circular Economy Package, which will require the active engagement of all stakeholders, from policymakers and businesses to consumers.”

Nicolas Beaumont, Senior VP Sustainable development and mobility, Michelin, said: “Resource efficiency is not a nice to have but a necessity. At Michelin, we design tyres with an aim to use resources sparingly. Ensuring they are not replaced before it is necessary, and maximizing their lifespan, in particular through retreading, makes economic, environmental and social sense. This is why we believe resource efficiency needs to remain at the top of the policy agenda and should be systematically taken into account when drafting regulation.”

Caroline Laurie, Head of Sustainability, Kingfisher Plc, said: “We know our customers want to get more from less, re-using and using longer, so the circular economy remains a key priority for Kingfisher but to accelerate activity, businesses require a more enabling policy environment that starts with the EU.” 

Martin Casey, Director of Public Affairs and Communication, UK and EU Public Affairs, CEMEX said: “For CEMEX, using key circular economy principles is core to our business, ensuring that we are materially and energy efficient, whilst ensuring that we serve our customers and protect the environment for this and future generations. Having the right regulatory framework to maximise these opportunities is therefore vital.”

David Symons, UK Director of Sustainability, WSP said: “Europe uses resources at three times the sustainable rate today, so designing more efficient products, infrastructure and business models is critical for long term prosperity and productivity. Moving to a more circular economy needs to remain a priority for EU and national policy makers.”

[1] Beyond the Circular Economy Package: priorities for the EU. This event will be held from 8.30am-10.00am on 14th December, 2017 at Hogan Lovells International, 23 Rue de la Science, 1040 Brussels, Belgium. The event will feature keynote speaker Jyrki Katainen, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness. Chaired by Aldersgate Group Executive Director Nick Molho, panellists include Martin Casey, Director Public Affairs & Communications UK & Public Affairs EU, CEMEX, Caroline Laurie, Head of Sustainability, Kingfisher, Audrey Douspis, EU Affairs Manager, Michelin and Joan Prummel, Strategic Advisor, Circular Procurement, Rijkswaterstaat (Dutch Ministry of Environment). 

[2] The Aldersgate Group published today a new report, Beyond the Circular Economy Package: Maintaining momentum on resource efficiency.

[3] The Aldersgate Group is a partner on the REBus project, an EU LIFE+ funded project that aims to demonstrate how businesses and their supply chains can implement resource efficient business models. The project is led by WRAP and also includes Rijkswaterstaat, the Environmental Sustainability Knowledge Transfer Network, and The University of Northampton. Business trials are taking place in a range of key market sectors (including electrical and electronic products, textiles, construction and ICT) that are worth an estimated €350bn to the EU economy.

[4] Under a transformational scenario with substantial progress in recycling and remanufacturing as well as major development of the reuse, servitisation and biorefining sectors, project partner WRAP estimates that replicating the resource efficiency business models tested by these pilot projects throughout their respective economic sectors would deliver an increase in gross value added to the EU economy of up to €324bn by 2030.

[5] Between 2000 and 2016, the EU-28’s resource productivity went from €1.47/kg to €2.07/kg, an increase of 41%: http://bit.ly/2hOBTHG


Beyond red tape: smart regulations are key to delivering UK industrial and environmental ambitions

7th December 2017

Today the Aldersgate Group launches a report by engineering consultancy BuroHappold, Help or Hindrance? Environmental regulations and competitiveness, which looks at the impacts of ambitious environmental standards on business competitiveness, skills and innovation.

The report, which is based on interviews in the waste, construction and car industries, concludes 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. 

This report will be launched at an event in Parliament today, 7th December with keynote speaker Claire Perry MP, Minister of Climate Change and Industry [1].
 
The report, commissioned by the Aldersgate Group and written by BuroHappold, 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 increased business investment in innovation and skills, better quality and performing products and infrastructure, greater business competitiveness and net job creation.

Examples include:

  • The low carbon infrastructure (heat networks and renewables) development required under the London Plan for building planning applications in 2015 is estimated to have created around 4,000 full-time equivalent jobs in the design, consultancy, construction and manufacturing parts of the supply chain;
  • The Landfill Tax helped trigger significant investment by the waste industry in new infrastructure and services (such as investment in waste recovery, sorting and recycling facilities), while also cutting the amount of waste sent to landfill by 72% in 20 years;
  • The EU passenger car and light vehicles CO2 regulation has provided a consistent and clear legal framework. Car manufacturers and suppliers have responded by developing an innovative, competitive and highly collaborative industry, with automotive companies now ranking third in R&D investments globally.

However, the report also highlights flaws in each of these regulations (from poor regulatory enforcement to a lack of focus on supply chain skills), which hold valuable lessons for designing the policies needed to deliver the Government’s objectives under the recently published Industrial and Clean Growth Strategies. To maximise environmental and economic benefits and avoid unintended impacts, well-designed regulations need to:   

  • Be pitched at the right geographic scale;
  • Provide a clear, stable sense of direction;
  • Be coherent with existing policies;
  • Be implemented in a way that works with business timescales;
  • Be accompanied by complementary policies (such as on skills and regulatory enforcement). 

Nick Molho, Executive Director, Aldersgate Group, said: “With clean growth positioned as one of the four Grand Challenges of the Industrial Strategy [2] and the recent Clean Growth Strategy promising to drive growth of the UK’s low carbon industries, the report comes at a crucial time to show how environmental regulations can act as a help rather than a hindrance to innovation and growth, whilst also delivering positive environmental outcomes.

The government recognised in the Industrial Strategy White Paper that regulations shouldn’t just be seen as red tape; on the contrary, they can also act as an important tool to support business innovation and competitiveness. The challenge ahead will be to ensure that regulations to deliver the UK’s environmental and industrial objectives are sufficiently ambitious, stable, practical and compatible with other policy objectives.”
 
Duncan Price, Director of Sustainability, BuroHappold and author of the report, said: “There is no inherent conflict between well-crafted policy and economic gains. When well designed and complemented by effective economic and industrial policies, smart regulations can deliver positive environmental and economic outcomes. Insights derived through this work hold valuable lessons for the government as it works to deliver its Industrial and Clean Growth Strategies.”
 
Sarah Cary, Head of Sustainable Places, British Land, said: “British Land is supportive of Government regulation to drive carbon efficiency in real estate and construction, helping the UK to lead the world in developing low carbon systems and services. A clear medium-term vision for future energy and carbon policy will drive millions into construction product innovation investment and upskilling for hundreds of thousands of workers. And, in challenging the industry to innovate, Government creates an opportunity for UK architects and manufacturers to become global leaders in energy efficient building design.”
 
Dr. Adam Read, External Affairs Director, SUEZ, said:
“Regulation has been at the heart of the positive evolution of the UK waste and resources sector, driving quality, delivering recycling and reducing our reliance on landfill, and landfill tax has been critical to this journey. We now have the opportunity to look to the future with an Industrial Strategy and a new Waste and Resource Strategy due where policy, regulation, and market incentives can come to the fore to help shape the Britain of tomorrow.”
 
Andy Walker, Technology Director, Johnson Matthey, said: “Regulating emissions at source is not only beneficial to the environment and human health, but also strongly drives innovation. Well considered regulations taking account of local and global considerations, signalled far enough in advance, provide scope for companies throughout the supply chain to innovate and plan for commercialisation, thereby maximising the economic benefits that can accrue from reducing the environmental impact of the vehicle fleet.”

[1] Help or Hindrance? The role of environmental regulations in the Industrial Strategy. This event will be held from 9.00am-11.00am on 7th December, 2017 in the Macmillan Room, Portcullis House, Westminster. The event, hosted by Peter Aldous MP, will feature a keynote speech from Claire Perry MP, Minister of State for Climate Change and Industry and Duncan Price, Director of Sustainability at BuroHappold. Panellists include Emma Howard Boyd, Chair, Environment Agency, Sarah Cary, Head of Sustainable Places, British Land, Dr. Adam Read, External Affairs Director, SUEZ, and Graham Willson, Chief Executive, British Tyre Manufacturers' Association Ltd. 
 
[2] Industrial Strategy: building a Britain fit for the future, HM Government, November 2017 https://www.gov.uk/government/publications/industrial-strategy-building-a-britain-fit-for-the-future


Clean Growth now part of UK’s mainstream economic strategy

27th November 2017

Reacting to the publication of Industrial Strategy: Building a Britain fit for the future today, Nick Molho, Executive Director at the Aldersgate Group said: “The Industrial Strategy can have a transformative impact on the UK’s economy, driving low carbon innovation and the continued growth of jobs, skills and supply chains. It is positive to see that clean growth is now a core objective for the strategy and there is increased focus on energy and resource productivity, and strengthening the synergies between power, heat and transport systems.

Annual global investment into climate-related projects is already more than $1 trillion and accelerating. Given UK strengths in industries such as offshore wind, ultra low emission vehicles and low carbon services, UK businesses are among the best placed to capitalise on the growth of low carbon opportunities and export markets.”

Nick Molho added: “Government can grow market demand for low carbon goods and services and help maximise the benefits of clean growth for UK plc through clear incentive policies, environmental standards, supportive policies on skills and a public procurement policy that rewards resource and energy efficient business. Going forward, the Industrial Strategy must also ensure that energy intensive industries are supported in a way that is consistent with the UK’s emissions targets and helps grow the role of these high value businesses in the UK’s low carbon supply chains.”

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Budget 2017: A bright future for Britain needs more focus on the low carbon economy

22nd November 2017

Reacting to today’s Autumn Budget, Nick Molho, Executive Director of the Aldersgate Group said: “The Chancellor is right that we cannot build an economy fit for the future unless we ensure our planet has a future. As well as aiming to be a world leader in tackling plastic pollution, it was good to hear further support for electric vehicles and charging infrastructure, and in ensuring the UK has the skills required to benefit from the job opportunities of the future.
 
However, the lack of clarity and progress on the future of low carbon power investments and energy efficiency standards in new buildings is disappointing. To reduce power sector emissions cost-effectively and continue to grow renewable energy supply chains, the UK needs a policy environment that allows it to deploy mature low carbon technologies such as onshore wind without subsidy, increase its ambition on offshore wind in the 2020s and keep the door open to improvements in new technologies. The announcement that there will be no new low carbon electricity levies until 2025 mustn’t get in the way of that.”

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Unlocking investment in the UK's natural environment is essential for a productive and resilient economy

6th November 2017

Today the Aldersgate Group publishes two briefingsKey asks for the 25 Year Environment Plan, which sets out business priorities for the upcoming plan, and Increasing investment in natural capital, which recommends actions by businesses and government to overcome the barriers currently restricting flows of finance towards natural capital projects.
 
Nick Molho, Executive Director of the Aldersgate Group said: “Our economy and society are hugely reliant on the goods and services provided by nature and are also vulnerable to the impacts of a changing climate. Investing in our natural environment will help improve both the productivity and resilience of businesses, supply chains and communities. The forthcoming 25 Year Environment Plan is an opportunity to show cross-government leadership and set clear legally binding targets that help support the growth of innovative natural capital enhancement projects.”
 
Nick Molho added: “Significant investment will be needed from the private sector to improve the state of the UK’s natural environment and meet the goals of the 25 Year Environment Plan. Whilst the natural capital finance market is currently nascent, innovation from business, investors and communities as well as targeted government intervention can work in tandem to develop its maturity by identifying new revenue models.
 
Opportunities include the reform of agricultural subsidy payments to increase focus on sustainable land management following the UK’s exit from the European Union, setting up an innovation fund that provides resources for the private sector to develop new financing models, and creating a Natural Capital Investment Fund that provides seed funding for priority natural capital projects across the country.”

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Aldersgate Group reactive to Professor Helm's Cost of Energy Review

25th October 2017

Reacting to the publication of Professor Dieter Helm’s Cost of Energy Review today, Sarah Williams, Public Affairs Manager at the Aldersgate Group said: “We welcome the publication of Professor Helm’s review. The UK needs a framework that supports the cost-effective growth of a secure low carbon power system. However, it is important to recognise that policies that have supported the deployment and economies of scale achieved in areas such as offshore wind have played a key role in driving clean energy innovation and cost reductions.

We note the suggestion of an equivalent firm power auction with interest, but would suggest that managing a low carbon power grid at the system level is likely to be far more efficient and cost-effective than asking individual renewable generators to arrange for their own balancing services.”[1]

Upcoming UCL analysis commissioned by the Aldersgate Group will explore in detail why UK industry faces higher electricity prices compared to EU counterparts and actions that can be taken to address this. Sarah Williams added: “Our upcoming study will be a useful complement to the findings of the Helm Review."

[1] Professor Jim Watson & Dr. Robert Gross (9 October 2017) Cost of Energy Review: Insights from UKERC Research

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Clean Growth Strategy sets UK economy on competitive path

12th October 2017

Reacting to the publication of the Clean Growth Strategy today, Nick Molho, Executive Director of the Aldersgate Group said: “The importance of positive government messaging on the low carbon agenda for investment confidence is often overlooked and today’s clear cross-government commitment to deliver on the UK’s climate targets will be welcomed by businesses. Recent announcements in the offshore wind and car manufacturing industries have highlighted how a clear vision, supported by detailed policies, enable the private sector to drive innovation, cut the costs of clean technologies and invest in UK jobs and supply chains.
 
By restating key commitments such as the £557 million for new offshore wind projects, providing new funding for electric vehicle charging infrastructure and innovative low carbon heat projects, and setting out important consultations on energy efficiency, the Clean Growth Strategy is an important milestone that will improve business confidence and the credibility of the UK’s climate targets.”
 
Nick Molho added: “To deliver the required increase in affordable private sector investment, the Clean Growth Strategy will have to increase in detail in the near future. This will be particularly important for the UK’s buildings, where mandatory standards and well-timed fiscal incentives such as stamp duty rebates are essential to delivering a step change in energy efficiency investment.”     

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Aldersgate Group welcomes BEIS green finance taskforce

18th September 2017

Reacting to the announcement of the Department of Business, Energy and Industrial Strategy’s green finance taskforce today, Nick Molho, Executive Director of the Aldersgate Group said: “The creation of a new taskforce on green finance is a very positive move forward and we are delighted to have been asked to assist the work of the taskforce. Investment needs in the green economy are ever-growing, with the Committee on Climate Change estimating the total annual investment needed to meet the UK’s fifth carbon budget at approximately £22bn [1]. Meeting domestic and international policy commitments on climate change and the environment will therefore require a significant amount of affordable private finance. With growing strengths in areas such as offshore wind and electric car manufacturing, the UK now faces a unique opportunity to broaden its competitive advantage in the low carbon economy by establishing itself as a world leader in the provision of green finance."

Nick Molho added: "The Aldersgate Group has been looking at ways of increasing private investment in green infrastructure through our work with the Centre for Understanding Sustainable Prosperity (CUSP). We look forward to using our findings to support the UK government in developing a green finance strategy to underpin the forthcoming Clean Growth Strategy and the Industrial Strategy.”

[1] Committee on Climate Change (November 2015) Advice on the fifth carbon budget. £22bn figure based on 1% of £2.23tn GDP in 2015 (US$2.86tn) World Bank national accounts data http://data.worldbank.org/indicator/NY.GDP.MKTP.CD

 

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Offshore wind is UK industrial success story

11th September 2017

Reacting to the results of the Second Contracts for Difference Allocation Round, Nick Molho, Executive Director of the Aldersgate Group said:

“The announcement today that the next round of offshore wind projects will receive a strike price of £57.50-74.75/MWh highlights the considerable cost reductions achieved by the offshore wind industry, at the same time as delivering increased UK content.[1][2]

Larger and more efficient turbines now mean offshore wind is a mainstream component of the UK’s energy mix and turbine blade manufacturing facilities in Hull and the Isle of Wight and servicing companies around the coast are important examples of how the industry has driven jobs and supply chain growth across the UK.

The UK is reaping the benefits of competitive auctions and stable government policy in this area. To continue to see costs reduce, a clear pipeline of projects well into the 2020s will be required and the government’s forthcoming Clean Growth Strategy must ensure that the £730m earmarked for auctions of less established technologies during the last parliament will be committed by 2020 as originally planned.” 

[1] The cost of offshore wind projects are now 50% lower than the first auction held in 2015.

[2] Renewable UK (September 2017) Offshore Wind Industry Investment in the UK: 2017 Report on Offshore Wind UK Content

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Scottish Programme for Government sends positive signal for low carbon investors

5th September 2017

Responding to the First Minister’s announcement today of her Programme for Government 2017-18, Nick Molho, Executive Director of the Aldersgate Group said:

“The First Minister’s proposal to phase out the sale of new petrol and diesel cars and vans by 2032 and the ambitious new targets included in the upcoming Climate Change Bill provide a clear sense of direction to business that investment in all forms of resource efficient infrastructure, renewable energy generation and clean transport will need to increase.
 
Scotland has a real opportunity to capitalise on its successes of recent years. The Scottish Government’s commitment to renewables has helped create a thriving sector that accounted for a total turnover of £2.7bn in 2015 and energy efficiency in Scotland’s buildings has been improving with a 74% increase in homes being rated EPC Band C between 2010 and 2015.
 
However, detailed policies are urgently needed if Scotland is to meet its climate targets on time and on budget and continue to grow its low carbon economy. This is especially the case for Scotland’s buildings where clear regulatory standards and well-timed incentives in the Scottish Energy Efficiency Programme and Warm Homes Bill will be essential to ramp up action on energy efficiency.”

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Government Must Develop A New Finance Strategy After Completed Sale Of Green Investment Bank

18th August 2017

Reacting to today’s announcement of Macquarie’s completed purchase of the Green Investment Bank (GIB), renamed the Green Investment Group (GIG), Nick Molho, Executive Director of the Aldersgate Group, said:

“Following the successful completion of the sale of the GIB today, we call on the new Green Investment Group (GIG) to honour their commitment to support investment in the UK’s renewable energy infrastructure. The GIG is ideally placed to lead private sector investment in UK green infrastructure projects and help deliver key government policy commitments such as those that will be set out in the upcoming Clean Growth Plan.”

Nick Molho added: “Delivering the government’s ambitions under the Clean Growth Plan and 25 Year Environment Plan will require supporting novel technologies and business models which may initially struggle to access finance. Now that the sale of the GIB is complete and given that the UK’s access to funds from the European Investment Bank is likely to be more restricted after Brexit, the government needs to develop a clear finance strategy in the near future. This strategy should aim to crowd in private sector investment in the new technologies and business models the UK will need to deliver on its environmental commitments and build a thriving low carbon economy.”

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Briefing: Energy efficiency in the UK’s buildings: key priorities for the new government

24th July 2017

Today, the UK’s building stock is responsible for 19% of annual emissions. Promoting energy efficiency in the UK's domestic and commercial sector is crucial to further decarbonisation in the UK.  Energy efficiency mechanisms could generate potential savings of 23.6MtCO2 per year by 2030, which is roughly equivalent to cutting the CO2 emissions of the UK transport fleet by one third. [1] However, there is a general lack of progress in reducing emissions across the UK’s building stock, insufficient uptake of low carbon heat and insulation and a failure to make any meaningful reduction in non-residential building emissions. [2] The Aldersgate Group and the UK Green Building Council have produced this briefing to highlight priorities for the government in addressing this issue.
 
Our briefing argues that reducing energy demand through greater efficiency can help the UK meet its legally binding climate targets, limit increases in energy bills, tackle fuel poverty, and drive economic growth and long-term job creation.

[1] Cambridge Econometrics and Verco (2015) Building the Future

[2] Committee on Climate Change (June 2016) Meeting Carbon Budgets: Progress Report to Parliament


UK low carbon ambitions must be made clear to investors

29th June 2017

Reacting to the publication today of the Progress Report from the Committee on Climate Change, Nick Molho, Executive Director of the Aldersgate Group said:

“If the UK is to significantly cut its emissions and modernise its buildings, energy and transport infrastructure in the next 15 years, the private sector must urgently understand the scale of the UK’s ambitions and the market arrangements under which it can invest in that infrastructure. Greater clarity is particularly needed on the policies that will drive emissions reductions in domestic and commercial buildings.”

“The EU referendum and recent General Election have resulted in some understandable delay in developing such a plan for businesses and investors. However, if low carbon infrastructure is to be delivered on time, at the lowest possible cost and in a way that grows UK supply chains, the government must deliver on the Minister’s intention to publish the Clean Growth Plan when Parliament returns from the summer recess.[1]”

Reacting to the key findings of the Progress Report on the UK’s adaptation to climate change, Nick Molho added:
 
“The limited progress being made to tackle the degradation of the UK’s natural environment and better protect its infrastructure from the impacts of climate change is concerning. In the coming year, we need to see a concerted effort across government departments to develop a detailed National Adaptation Plan and 25 Year Environment Plan. These plans must attract much greater investment to improve the state of key natural resources such as coastal wetlands, peatlands and soil and ensure the UK’s infrastructure and economy are resilient in the face of more extreme weather events.” 

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Business case for disclosing climate risks is overwhelming

29th June 2017

Reacting to the publication today of the final recommendations by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), Nick Molho, Executive Director of the Aldersgate Group said:

“The publication of the TCFD’s industry-led recommendations cements the importance within the investment and business communities of disclosing the physical, regulatory and commercial risks linked to climate change. There is growing recognition that understanding how this information may impact company or asset performance is essential to enable businesses to make sensible long-term strategic decisions and to give investors the information they need to shift their investments towards more resilient and lower carbon business models.”
 
Nick Molho added: “These recommendations on standardised voluntary disclosure will act as an influential guide for investors and businesses across the economy. However, in light of the urgency of tackling climate change, mandatory regulations remain essential to ensure that climate-related disclosure is widely adopted in the near future and is consistent and comparable between companies of a same sector. Given the UK’s aim to become a hub for green finance, the government should take note of the ambition of these recommendations and strengthen the breadth and scope of its own mandatory carbon reporting regulations in line with the industry standard.”  

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Ambitious low carbon agenda essential to make the UK a leader in new industries

21st June 2017

Reacting to the Queen’s Speech today, Nick Molho, Executive Director of the Aldersgate Group, said:

“It is encouraging to see the government’s desire to make the UK a leader in new industries and enhance its role on the world stage. If the government is to do this successfully, it will need to commit to an ambitious environmental and low carbon agenda. With the global low carbon economy growing fast and international action on climate change gathering pace despite the US withdrawal from the Paris Agreement, this will require the publication this year of a detailed clean growth plan to deliver the UK’s climate targets under the fifth carbon budget and a framework for a 25 year plan to enhance the state of the UK’s environment. In incorporating EU environmental legislation in UK law and determining its future, the government should focus on delivering environmental improvements on the ground that are as good as or better than what is currently legislated for.”

Nick Molho added: “The government is right to seek the “broadest consensus possible” in determining the UK’s negotiating terms on Brexit. In order to deliver the UK’s climate and energy policy ambitions in the most efficient and cost-effective way, the UK must maintain close collaboration with the EU after Brexit in key areas of mutual benefit, such as through continued participation in the internal energy market.” 

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Cross-party support for climate policy must strengthen low carbon economy

9th June 2017

Following the results of the General Election, the Aldersgate Group urges the new government when it is formed and MPs from all political parties to build on their support for the UK’s Climate Change Act and the Paris Agreement by backing the growth of the UK’s low carbon economy.
 

The Aldersgate Group, whose business members represent a wide range of economic sectors and a collective turnover in excess of £400bn, calls on the new government when it is formed and MPs from across the political spectrum to recognise the important role played by the low carbon economy in delivering widespread environmental, economic and social benefits, and in strengthening the UK’s international competitiveness.
 
The UK’s low carbon economy was already worth £77bn in 2015 and employed 432,000 people. With UK strengths in the offshore wind, ultra-emission vehicle, construction, ICT and legal and financial services sector, stable and long-term policies could help increase the size of the UK’s low carbon economy from 2% of GDP today to 8% by 2030. Despite President Trump’s recent decision to withdraw the US from the Paris Agreement, the global low carbon economy is rapidly growing, as shown by the $240bn invested in a record amount of renewable electricity capacity in 2016, the slowdown in coal consumption in India and China and increased collaboration between the European Union and China on tackling climate change.
 
Nick Molho, Executive Director of the Aldersgate Group said: “All the main parties have shown support during the General Election campaign for the UK to put in place an ambitious climate and environmental policy agenda and seize the industrial opportunities that this represents. We therefore look forward to working with the new government and MPs from all parties to put in place ambitious policies that will help grow the UK’s low carbon sector, improve resource efficiency, enhance the natural environment and strengthen the competitiveness of the economy.”
 
Nick Molho added: “As made clear in the Aldersgate Group Manifesto, this is a crucial time to establish policies that will improve the health of the UK’s environment and the future prospects of its economy. An important first step should be the publication in 2017 of a detailed Clean Growth Plan to attract low carbon investment and meet climate targets and a framework for a 25 Year Environment Plan to improve the state of the UK’s natural environment."

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Supporting renewables is in Republicans’ interest

7th June 2017

Today the Financial Times published a letter by Aldersgate Group Executive Director, Nick Molho, commenting on Republican US states' growing economic activity around renewable energy. See full text below:

Sir, Many of the US states that are joining the coalition to press ahead with their commitments to cut carbon emissions under the Paris agreement are indeed under Democratic leadership (“Trump Paris deal pullout faces US states’ backlash”, June 5). However, some key Republican states that haven’t yet joined this alliance are witnessing growing economic activity around renewable energy and it is in their interest to continue supporting the growth of the sector.

For example, just under $7bn was invested in renewable energy projects in North Carolina in 2015, while Texas has more than 100,000 people working in the sector. This is one of the reasons some of the federal incentives that facilitate the deployment of renewable energy, such as the wind and solar tax credits, have bipartisan support and were recently renewed for another five years.

When one adds to this the ambitious emissions reduction commitments of a major state like California, the world’s sixth-largest economy before France, it becomes clear that US states and cities could deliver significant emission cuts in the years to come despite an unsupportive federal government.

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Green business needs strong, stable support

5th June 2017

Today the Guardian has published our letter, signed by 11 businesses, highlighting the importance of the UK's low carbon economy and calling on the next government to put in place ambitious and stable environmental policies. See full text below:

Despite the US withdrawal from the Paris agreement on climate change (Anger at US as Trump rejects climate accord, 2 June), the global market for low carbon goods and services is rapidly growing and the UK must make the most of this opportunity. Spurred in particular by major investments in low carbon technologies by countries such as China, India, Mexico and South Africa, the Paris agreement could open up $23tn (£18tn) worth of opportunities for low carbon investments in emerging markets between 2016 and 2030. The commitments made by six world leaders at the recent G7 summit and the decision by China and the EU to collaborate more closely on climate change support this trend.

The UK is well placed to benefit. Its low carbon sector employed 432,000 people and produced a turnover in excess of £77bn in 2015. The UK’s strengths include manufacturing ultra-low emission vehicles and offshore wind turbines, piloting innovative ideas in energy, water and resource efficiency and providing financial and legal services for clean energy projects worldwide. The focus on developing low-cost, low carbon infrastructure is gaining momentum across all key economic sectors.

The low carbon economy could grow from 2% of UK GDP today to 13% by 2050. However, stable policies to grow the UK’s low carbon market will be essential to turn this potential into reality and ensure our economy remains competitive on the global stage. We therefore call on the new government to put in place ambitious and long-term policies to tackle climate change and improve the state of the environment at the heart of its industrial strategy and vision for the UK.

Nick Molho Executive director, Aldersgate Group, Chris Newsome Director of asset management, Anglian Water, Steve Waygood Chief responsible investment officer, Aviva Investors, Nigel Stansfield President, Interface Europe, Middle East and Africa, Pierre Woreczek Chief customer officer, Kingfisher, Jens Tommerup CEO, MHI Vestas Offshore Wind, Matthew Knight Director of energy strategy and government affairs, Siemens UK, Alistair Phillips-Davies Chief executive, SSE, Julia Barrett Director, Willmott Dixon Re-Thinking, David Symons UK Director of Sustainability, WSP, Piers Guy UK country manager, Vattenfall, Paul Greensmith UK country leader, XL Catlin

houses-of-parliament-westminster

Low carbon growth will continue without Trump

1st June 2017

Reacting to President Donald Trump’s announcement that the United States would withdraw from the Paris Climate Change Agreement, Nick Molho, Executive Director of the Aldersgate Group said:

“Donald Trump’s decision won’t result in a U-turn on climate action in the US or globally. Several US States have made clear commitments to continue investing in low carbon technologies [1] and major US businesses such as Walmart have set ambitious targets to cut carbon emissions and increase the use of renewable energy [2].

Globally, the shift to a more efficient, low carbon economy is gathering pace, the cost of clean technologies is rapidly falling and coal use in China and India is slowing faster than anticipated [3]. Over $240bn was invested in record levels of renewable energy capacity in 2016, 40% of which was driven by developing economies including China, India, and Brazil [4]. Following the commitments made by six world leaders at the recent G7 summit [5] and the news of greater co-operation between China and the EU on climate change, major global players like the UK must continue to build competitive, low carbon economies and honour their commitments under the Paris Agreement.” 


[1] A bipartisan group of 17 US state governors representing almost 40 percent of the US population recently agreed for example to co-operate on the deployment of clean energy and transport solutions. 

[2] Walmart recently joined the global science-based targets initiative and committed to cut its emissions of greenhouse gases by 18% by 2025 relative to 2015 levels, source half of its energy from renewables by that date and work with its supply chain to reduce emissions by a further 1 Gigatonne.

[3] https://insideclimatenews.org/news/15052017/china-india-paris-climate-goals-emissions-coal-renewable-energy 

[4] Excluding large hydro. Renewable energy investment in 2016 added 138.5 gigawatts capacity, an 8% increase from 2015 with average costs for solar and wind dropping by 10%. Bloomberg New Energy Finance, April 2017 https://about.bnef.com/blog/bang-buck-record-new-renewable-power-capacity-added-lower-cost/

[5] In a communique on 27 May, the governments of France, the UK, Japan, Italy, Germany and Canada as well as the presidents of the European Council and European Commission reaffirmed “their strong commitment to swiftly implement the Paris Agreement”.  

08

Aldersgate Group Manifesto 2017: A healthy environment, a competitive economy

16th May 2017

Today the Aldersgate Group publishes a manifesto report, A healthy environment, a competitive economy, setting out policy priorities for the new government. The report highlights the growing importance of the low carbon economy to the UK’s competitiveness and urges the new government to put ambitious environmental and climate policy at the heart of its programme as the UK leaves the EU. 

The UK faces several environmental challenges from the growing impacts of climate change on its infrastructure to the degradation of key parts of its environment such as soil. Tackling these environmental challenges effectively will provide economic as well as environmental benefits for the UK. The Aldersgate Group manifesto therefore calls for the next government to:

  • Publish a detailed Clean Growth Plan without delay to attract greater levels of affordable private sector investment in energy efficient buildings, low carbon energy and transport infrastructure. This will help deliver the UK’s emissions reduction commitments under the fifth carbon budget in a timely and affordable way and grow supply chains;
  • Put in place a cross-departmental resource efficiency policy to drive better management of resources across the economy and encourage greater use of secondary materials;
  • Improve the state of the UK’s natural environment via the prompt publication of a 25 Year Plan for the Environment;
  • Develop an industrial strategy to build on the UK’s strengths in the low carbon and resource efficient sectors and support continued growth and job creation in its supply chains;
  • Develop a new finance strategy to increase the levels of private investment flowing into the UK’s modern, green infrastructure, new technologies and innovative business models.

Policies such as the Climate Change Act have already helped to cut carbon emissions, reduce household energy bills in real terms [1], reduce the cost of new technologies like offshore wind and deliver growth in new industries. The Office of National Statistics estimates that the UK’s low carbon and renewable energy economy employed some 432,000 people in 2015 and delivered a turnover of more than £77bn. [2] Critically, a lot of this growth is taking place in parts of the country that need it the most such as the North of England and the Solent area. [3]

UK businesses have strengths in numerous areas of the low carbon economy such as the manufacturing of ultra-low emission cars and wind turbines, expertise in energy efficiency services and engineering, leading cutting edge pilots in resource efficiency and natural capital and the provision of legal and financial services for clean energy projects worldwide. Going forward, the export potential for UK businesses is significant, with estimates that the low carbon economy could grow from 2% of the UK’s GDP today to 8% by 2030. [4]

Nick Molho, Executive Director of the Aldersgate Group said: “As the new government negotiates the UK’s departure from the EU, it should not neglect the importance of putting forward an ambitious low carbon and environmental policy. The UK has significant strengths across the low carbon economy, a market which is already worth over $5.5tn globally [5] and is rapidly growing following the Paris Agreement on climate change. The next five years are a unique opportunity to consolidate the UK’s competitive advantages and put its businesses in the best possible position to tap into growing export opportunities.”

Steve Waygood, Chief Responsible Investment Officer at Aviva Investors said: “We are calling for the creation of public league tables, ranking the performance of companies on a range of sustainability issues, including climate change. Providing ambitious and clear low carbon policies in the next parliament and improving the disclosure of corporate information relating to climate risks will be essential to increase affordable private investment. We need policies to direct capital towards the resource efficient and low carbon infrastructure that the UK so urgently needs to build in order to maintain a globally competitive and resilient economy.” 

Jens Tommerup, CEO at MHI Vestas Offshore Wind said, “We support the Aldersgate Group in their calls for a broad political consensus in the UK around the need for a renewed focus on the transition to a low carbon world, and the great opportunities this presents a new Government after 8th June and the people and businesses of the UK. Offshore wind in particular is demonstrating a compelling proposition, accelerated cost reduction - on track to be the lowest cost large scale generating technology by the early/mid-2020s-, whilst at the same time delivering industrialisation and valuable jobs the length and breadth of Britain.”

Chris Newsome, Director of Asset Management for Anglian Water and member of the Green Construction Board said: “As highlighted in the Infrastructure Carbon Review, infrastructure is responsible for over half of the UK’s carbon emissions. We fully support the Aldersgate Group’s manifesto released today, and their aligned efforts to reduce carbon and cost within infrastructure through innovation and collaboration with the supply chain. The manifesto will undoubtedly drive the sustainability agenda and influence future policy."

"It’s through coalitions such as the Aldersgate Group that Anglian Water aims to provide leadership, practical advice and engage with other companies looking to deliver reduced carbon and reduced cost in sustainable growth.”

Nigel Stansfield, President at Interface Europe, Middle East and Africa said: “Our Mission Zero commitment has reduced our greenhouse gas emissions by 98% across our EMEA operations since we started our sustainability journey in 1996. While companies like ours continue to lead the way, governments at both a national and EU level can accelerate moves to reduce our dependence on fossil fuels by encouraging transparency around the environmental impact of products, and introducing measures to change buyer behaviour in favour of those that are low carbon.”

Julia Barrett, Director at Willmott Dixon Re-Thinking Limited said: “The construction industry is willing to invest in research, innovation and skills development to find the solutions for an affordable low carbon future. But, we need to be confident that the government is taking a long-term policy approach that will support spending on resource efficiency, energy efficiency and low carbon infrastructure.”

Mary Thorogood, Stakeholder Relations Adviser at Vattenfall UK said: “Vattenfall supports the Aldersgate Group’s call for the next government to quickly publish a detailed Clean Growth Plan. The publication of a supportive plan will provide certainty for future low cost onshore and offshore wind projects.  These long-term market signals will encourage Vattenfall’s continued investment and job creation in the UK.”

David Symons, Director of Sustainability at WSP said: “A low carbon, resilient and prosperous United Kingdom is key for WSP and our business.  We look to the next government to deliver world class, ambitious programmes that support our own Future Ready ambitions.”

Sue Riddlestone OBE, Chief Executive at Bioregional said: "Britain's place in the world, and the strength and sustainability of its economy, now depend on how well we look after our environment and the planet. So, too, does the health and long term prosperity of our people. Deep down, more and more of us know that. Voters and politicians must keep that front of mind during this election campaign."

Peter Young, Trustee of the Wildlife Trusts said: “The next 5 years will see coherent and far-sighted environmental policy as an increasing necessity to underpin our future economic success. It is vital that all parties are explicit in demonstrating their commitments to decarbonise, use resources efficiently and enhance our natural capital. Without heeding the importance of these issues to secure a strong UK economy and international trading position, claims to improve UK prosperity and society will be hollow."


[1]: Committee on Climate Change (March 2017) Energy Prices and Bills – impacts of meeting carbon budgets. Improvements in energy efficiency have saved the typical household around £290 per year since 2008 as demand for electricity and gas has reduced, more than offsetting the price of low carbon policies and network costs.

[2]: ONS (6 April 2017) "UK environmental accounts: Low carbon and renewable energy economy survey, final estimates: 2015"

[3]: Aldersgate Group (September 2016) Setting the pace: Northern England’s low carbon economy. In 2013, there were already 136,000 people working in the low carbon economy in the North and this is set to grow with major ongoing investments such as those from Siemens, ABP and DONG Energy at Green Port Hull. On the Isle of Wight, MHI Vestas’ investment in an offshore wind turbine blade factory has created hundreds of jobs on the Isle as well as jobs and other positive impacts across the wider Solent area.

[4]: Ricardo Energy & Environment (March 2017) UK business opportunities of moving to a low carbon economy

[5]: New Climate Economy (July 2015) Seizing the Global Opportunity


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