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Aldersgate Group announced as Race to Zero Accelerator

24th September 2021

During Climate Week NYC, the Aldersgate Group has been announced as an official Accelerator for the UN-backed Race to Zero campaign, which is a global campaign rallying non-state actors – including companies, cities, regions, financial, educational, and healthcare institutions – to take rigorous and immediate action to halve global emissions by 2030 and deliver a healthier, fairer zero carbon world in time. The campaign’s accelerators commit to boosting the campaign by supporting their members in applications to join and building awareness of its objectives through strategic communications, messaging, and events.

With members spanning business, civil society, educational institutions and professional institutes, the Aldersgate Group believes that ambitious and stable low carbon and environmental policies make clear economic sense. Many of the Group’s members have set ambitious net zero targets and are already developing plans to meet them. Over the course of the past year, the Group has driven a 43% increase of signatories across its membership into the Race to Zero.

Nick Molho, Executive Director of the Aldersgate Group, said: “In order to deliver emissions reductions in line with the Paris Agreement, and meet global net zero targets, collaboration between business, government, civil society, investors, and education institutions is crucial. That is why we have signed up to become an Accelerator for the UNFCCC’s Race to Zero campaign, to champion this cause and fast track action across society.

“This year’s IPCC report made clear the urgency of the task at hand: we must get on track for the 1.5C target of the Paris Agreement to minimise climate impacts, while also harnessing the opportunities of a net zero economy. COP26 will be a crucial moment to make progress on issues such as emission reduction pledges, international commitments on climate finance, the phase out of coal power, and carbon pricing.”

Nigel Topping, UN High Level Champion for Climate Action, said: “Momentum continues to build in the run up to COP26, with businesses, cities and investors raising their ambition and taking action to race towards a greener, fairer, healthier, zero carbon world. We're delighted to welcome the Aldersgate Group as an important Accelerator to the Race to Zero to help us expedite this agenda."

The unifying goal of the Race to Zero campaign is for all members to halve emissions by 2030, and achieve net zero as quickly as possible, by 2050 at the latest. So far, it has mobilised 799 cities, 35 regions, 4,475 businesses, 220 financial, 731 educational and 45 healthcare institutions as they work together to present decarbonisation initiatives. Collectively these non-state actors now cover nearly 1 billion people, over 11% of global CO2 emissions and almost 15% of the world’s GDP.

Race to Zero members must work in line with a clear set of guidelines, by pledging to have emissions reduction targets that are in line with the goals of the Paris Agreement, backed by clear and comprehensive plans, and supported by transparent reporting on progress throughout the process.

COP6

Clear plan of action needed to cut industrial emissions, improve competitiveness and create jobs

9th September 2021

Following the Government’s recent strategies on industrial decarbonisation and hydrogen, today the Aldersgate Group launches two major publications from Frontier Economics and University College London (UCL) calling for a more detailed policy framework to drive low carbon investment in heavy industry.

Based on significant engagement and case studies from several industrial sectors, these papers present tangible solutions to accelerate the decarbonisation of UK heavy industry in a way that will drive innovation, increase competitiveness, and create jobs across the country.
[1]


Heavy industrial sectors like steel, cement, glass, and ceramics are essential to the UK’s economic prosperity, contributing £170bn to the UK economy and directly employing nearly 3 million people across the country [3]. As the UK transitions to a net zero economy, heavy industrial sectors will be fundamental to providing the building blocks for low carbon infrastructure, goods and services. They also have a unique opportunity to develop new competitive advantages and expand into new markets during the net zero transition.

Despite some welcome commitments in the Government’s Industrial Decarbonisation Strategy and Hydrogen Strategy, a more comprehensive and ambitious plan of action is urgently needed to deliver cuts from industrial emissions at the pace and scale demanded by the UK’s net zero target.

Backed by extensive engagement with industry representatives from manufacturing sectors such as steel, cement, glass, ceramics and chemicals, today’s publications put forward specific recommendations to scale up innovation, roll out supporting infrastructure and accelerate low carbon investment in industrial clusters and dispersed sites (Frontier Economics). They also feature proposals to tackle the investment and competitiveness barrier created by high industrial electricity prices, which is slowing down efforts to electrify and decarbonise parts of industry (UCL).

Nick Molho, Executive Director of the Aldersgate Group, said: “There is strong appetite across heavy industrial sectors to accelerate emission cuts and seize the potential opportunities created by the net zero transition in terms of innovation, new investment and job creation at industrial sites across the country. The Government now has a key role to play in supporting industry, by taking firm decisions on infrastructure funding and policy support and by tackling head on the investment barrier stemming from high industrial electricity prices.”

Accelerating the decarbonisation of industrial clusters and dispersed sites (Frontier Economics)

Industrial clusters and dispersed sites (those located more than 25km from the 6 major industrial clusters) contributed an estimated 37.6 MtCO2e and 33.6 MtCO2e of emissions respectively in 2018. [4] Despite differences in their net zero journeys and technological solutions, industries predominantly located in clusters (steel, chemicals) and those mainly located in dispersed sites (cement, glass, ceramics) will require similar policy solutions to decarbonise. Key recommendations in this report include:

1. Provide certainty to industry on the future availability of low carbon hydrogen, biomass, and carbon capture usage and storage (CCUS), by using contracts for differences (CfDs) and government matchmaking. Industrial producers need confidence that low carbon hydrogen and CCUS infrastructure will be available to support innovation and investment in low carbon technologies. To build on the commitments of its Hydrogen Strategy, the Government should establish a certification for low carbon hydrogen, explore CfDs for key alternative fuels and CCUS, legislate for low carbon hydrogen and CCUS targets, and act as a “matchmaker” between suppliers and industrial producers.

2. Work closely with Local Enterprise Partnerships (LEPs), local authorities (LAs) and devolved governments to design local infrastructure plans to help connect dispersed industries to the infrastructure being deployed in clusters. LEPs and LAs can play a key role in ensuring that dispersed industrial sites such as cement plants have access to the essential low carbon infrastructure located in industrial clusters.

3. Provide targeted UK ETS free allowances or support through Carbon Border Adjustment Mechanisms (CBAMs) to prevent unintended impacts during the transition to low carbon business models. In cases where the requisite policy, infrastructure, and technology support is not in place to allow specific industries to decarbonise and respond to carbon price signals, industries should receive interim support in the form of free allowances or CBAMs to avoid a competitive disadvantage and the risk of carbon leakage.

4. Drive greater resource efficiency in industry through changes to regulation and increased accessibility of funding. Changes to building and waste regulations and introducing targets for recyclable material could be of significant benefit to sectors such as glass (which can use recycled glass in production) and steel (around 90% of end-of-life steel could be collected and recycled in electric arc furnaces). Access to innovation funding, such as through the Industrial Energy Transformation Fund, should be made easier by simplifying timelines and allowing businesses to apply for funding on a rolling basis.

5. Introduce demand-side policies to grow the markets for low carbon and resource efficient industrial products. This could be done by using product standards (similar to the Buy Clean California Act for construction materials), procurement policies (such as the CO2 Performance Ladder used in the Netherlands), and information campaigns.

Matthew Bell, Director and Joint Head of Public Policy at Frontier Economics, said: “The UK has an opportunity to develop competitive, low carbon industries to match growing global demand for low carbon industrial products. Meeting this demand is likely to help a very broad range of industrial sectors. Our report highlights the most important and urgent actions that the Government must take to help UK industry take the lead in winning new contracts, whilst also meeting our climate commitments.

These actions include improving the predictability of the future supplies of low carbon fuels, enhancing the links between Westminster and parts of local government (including Local Authorities and Local Enterprise Partnerships), and ensuring the UK’s trade policy supports the competitiveness of UK businesses as they move to net zero – such as through the possible introduction of carbon border adjustments and demand led measures such as product standards.”


Delivering competitive industrial electricity prices in an era of transition (UCL)

The UK has significantly higher industrial electricity prices than European competitors. With electrification key to industrial decarbonisation, delivering low cost and low carbon electricity is essential. Seizing the opportunity provided by the rapidly declining policy costs of renewables must be a priority. Key recommendations from this briefing include:

1. Maintain an efficient framework to accelerate investment in the cheapest forms of mature renewable energy such as onshore wind, accompanied by a predictable, rising carbon price to reduce investor risk. Offshore wind should be further supported with investment in surrounding supply chains and infrastructures such as ports.

2. Establish an integrated approach to network development, funding, and pricing. Independent Future System Operator Objective(s) should include more coordinated oversight of future generation and network developments, to minimise costs and facilitate the power sector’s transition to zero emissions.

3. Support continued growth of interconnection (through Ofgem’s cap-and-floor revenues system) and offshore grid development and reduce friction in electricity trade. Each 1GW of interconnection capacity can reduce UK wholesale electricity prices by 1-2%, [5] by making low cost, low carbon imports available and increasing variable supply and demand. The government should seek to restore UK participation in the day-ahead electricity markets with neighbouring EU countries, the absence of which is estimated to result in £45 million in lost trade in 2021. [6]

4. Establish a market for long-term, zero carbon and tradable electricity contracts, grounded in the declining cost of unsubsidised renewable electricity sources. These contracts would mitigate the indirect costs of carbon prices, and the volatility of fossil fuel prices.

5. Investigate options for moving some policy costs from electricity prices to gas prices over time, with interim competitiveness support for major gas users unable to electrify or transition to low carbon fuels in the short term. This will incentivise electrification and more evenly distribute the costs of the low carbon transition, while ensuring industry has the appropriate support to remain competitive.

6. Improve scrutiny and transparency of reported electricity price data. In order to effectively assess the degree to which electricity prices faced by UK industrial consumers are changing, both over time and relative to international competitors, reliable data is crucial. As part of Quality Assurance we recommend a review of how this data is requested, collected, and reported by BEIS.

Michael Grubb, Professor of Energy and Climate Change at UCL Institute for Sustainable Resources, said: “The UK electricity system has already undergone part of its low carbon transition. Thanks in large part to carbon pricing, coal is no longer significant – and that in itself reduces the impact of carbon costs on UK electricity prices. But industry is still carrying the legacy cost of building up renewables, which are part of the larger energy transition. Those costs could be spread more evenly, and in particular, reforms are needed to ensure that industry can benefit both from access to the now-cheap renewables, and from smoother participation in the capacity market.”

Paul Drummond, Senior Research Fellow at UCL Institute for Sustainable Resources, said: “Historic investment in the deployment of renewable energy technology, and the substantial reductions in cost it produced, now presents the UK with a clear opportunity to both reduce the high electricity prices faced by energy-intensive industries relative to many of continental neighbours, and emissions reduction through increasing electrification. The government must make sure a clear, long-term policy architecture is in place to encourage investment in increasingly subsidy-free renewables and grid interconnection, and effective and efficient markets in electricity trade and system balancing.”

Laura Cohen, Chief Executive of the British Ceramic Confederation, said: “Almost all of our members' 150 sites are located off-cluster. To switch from firing with gas we need to move to hydrogen, bioenergy, or electricity. We need policy interventions now for off-cluster manufacturers to remain competitive over this extended period until options are widely available, particularly as most of our members are paying an eye-watering £130/MWh which makes electrification uneconomic. Given the scale of the challenge we need much more government funding and supportive policies to develop and implement decarbonisation technologies for these off-cluster sites.”

Martin Casey, Director of Public Affairs Europe at CEMEX, said: “CEMEX very much welcomes these two reports: Individually, and when considered together, they provide deep insight into the real challenges faced by UK industry and provide well thought-out suggestions for actions and policies that the Government should take onboard. The competitive, sustainable and climate neutral future of essential material production in the UK depends on it”.

Sam French, Business Development Director at Johnson Matthey, said: “Decarbonising and modernising the UK’s heavy industrial sectors is an urgent necessity on both climate and economic grounds. These two reports provide a clear plan of action to drive innovation, cut the cost of new technologies, improve the competitiveness of industry and drive job creation. Industry needs a clear, net zero aligned roadmap to deploy hydrogen and CCUS infrastructure, alongside predictable revenue mechanisms and carbon pricing trajectories to unlock private investment in new technologies, business models and skills.”

Edward Heath-Whyte, Head of Environment and Sustainability at Liberty Steel, said: “As we approach COP26 it is important to ensure the low carbon transition for energy intensive industries is supported by appropriate policy measures. Liberty Steel UK is committed to supplying GREENSTEEL from its Rotherham Electric Arc Furnaces as part of the UK’s transition to becoming a low carbon economy. It is important that government takes steps to help drive this innovation from industry, in order to accelerate the net zero transition. As the Rotherham steelmaking plant is a ‘dispersed site’, we support the recommendations made in this report to help us and other sites like Rotherham accelerate the pace and cost-efficiency of reaching net zero."

Shane Hughes, Carbon Consulting Lead at Ramboll, said: “We welcome Aldersgate Group’s well informed policy recommendations. Britain kick started the Industrial Revolution but now heavy industry urgently needs ambitious policies to support the UK to again lead in the Net Zero Revolution. Get this right and heavy industry can both be climate positive and attract massive inward investment.”

Brian Holliday, Managing Director, Siemens Digital Industries, GB&I said “For the UK to achieve carbon net zero by 2050 it’s vital that UK manufacturing decarbonises. Whilst UK Government’s policy framework is advancing, industry needs greater forward certainty to allow leaders across the spectrum to plan effectively. This report highlights the challenges facing manufacturers with complex operations and I trust it will catalyse focus to address their needs. Industry has much work to do and needs greater insights to the art of the possible and more accessible technology solutions from multiple vendors.”

Dr Martyn Kenny, Sustainability Director at Tarmac, said: “Achieving the decarbonisation of UK heavy industry will require close collaboration between government and the UK cement and concrete sector. A comprehensive and ambitious plan is now needed to develop the policy environment, technologies and supporting infrastructure essential to decarbonise both industrial clusters and dispersed sites.

Tarmac is committed to this transition and has defined a clear pathway to not only achieve net zero by 2050, but even to go beyond net zero and remove more carbon than we emit. It is now critical that government delivers the policies needed to provide clarity and certainty, in order to facilitate a just transition that supports investment, competitiveness and jobs.”

[1] The Aldersgate Group’s new report, commissioned from Frontier Economics, Accelerating the decarbonisation of industrial clusters and dispersed sites is available to download here. The Aldersgate Group’s new briefing, commissioned from UCL, Delivering competitive industrial electricity prices in an era of transition, is available to download here.

[2] These publications will be discussed at a public webinar from 9.30am to 11.15am on September 9 with panellists from key industry organisations and lead authors of each report. You can register here.

[3] UK Industrial Decarbonisation Strategy (2021), page 16

[4] ibid, page 17

[5] National Grid (2014a) Getting more connected: The opportunity from greater electricity interconnection, National Grid, London

[6] Roberts, D. (2021) An initial assessment of the extent of inefficiency in electricity trade, Frontier Economics [online]


Decarbonisation of 29 million homes at risk due to significant gaps in net-zero plans

25th August 2021

It’s currently too complicated for people to adapt their homes for net zero and too often things go wrong. That’s the message today from a major coalition of consumer and industry groups in an open letter to the Prime Minister.

Citizens Advice, Which?, Aldersgate Group and the Federation of Master Builders are urging the government to work with them to address the obstacles currently faced by consumers and ensure lessons from previous energy efficiency schemes are learned. Otherwise it risks undermining the UK’s ability to decarbonise its 29m homes.

By making sure this process is as easy as possible for the public to engage with and understand, the government can maintain public trust and support and realise the benefits of emissions cuts, safer and warmer homes and innovation and jobs.

  • Consumer confusion - right now the process of installing low-carbon heating, upgrading insulation or installing smart technologies is time-consuming, confusing and stressful. Researching and choosing the right technology, finding a reputable installer and having the work completed demands huge amounts of knowledge, time and effort.
  • Things go wrong too often - the process of making adaptations is often beset by problems, including poor installation, technologies not working as expected, and people facing difficulties fixing things when they go wrong.

The coalition is also urging the government to avoid the mistakes of past energy efficiency schemes. Mistakes which left too many people struggling with damp and mould due to poorly installed insulation. Others suffered damage to their homes, leaving them with long-term problems that were expensive, disruptive and distressing to resolve.

Despite recent improvements, current consumer protections are not ready for the pace and scale of the work needed to improve millions of UK homes.

The coalition is calling on the government to take the opportunity to fix these gaps through its upcoming Net Zero Strategy and put in place a long-term strategy to help households overcome the barriers to adapting their homes for the net-zero transition.

  • Information - from installing low-carbon heating to upgrading insulation, it’s confusing for people to know what steps to take and what technologies to install. People need more accessible and unbiased information to help make the right changes to their homes.
  • Consumer protections - the consumer protection landscape must be fit for purpose. If protections don’t keep up with the pace of change, the door will be opened to scammers and rogue traders. Previous energy efficiency schemes have been marred by such problems - which also began to emerge with the Green Homes Grant.
  • Costs - many people will need financial support to make changes to their homes. There needs to be a comprehensive long-term policy framework that provides certainty for businesses and consumers, which offers financial support such as predictable and well-advertised grants, low-cost loans and financing.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“Our evidence is clear. Right now, making green changes to homes is too confusing and too often things go wrong for those trying to do the right thing. The public are behind the net-zero transition, but they need the right information and tools, particularly when it comes to adapting their home.

“By getting things right now, the government can give people the confidence to make changes and play their part in getting to net zero.”

Rocio Concha, Director of Policy and Advocacy at Which?, said:

“Decarbonising millions of households across the UK is a vital, but complex component of the government’s net-zero strategy, and its success will depend on ensuring consumers are supported in transitioning to low carbon heating systems, which will involve radical changes to their home.

“The level of support consumers need must not be underestimated, and we are urging the government to ensure its net-zero policy has provisions to help consumers navigate the heating market, through access to the right information, strong consumer protections, and if needed, financial support.”

Nick Molho, Executive Director of the Aldersgate Group, said:

“Cutting emissions from homes is a significant part of achieving net-zero emissions but the transition also presents a real opportunity to improve the quality of the housing stock and the affordability of energy bills across the country.

“The Government has a significant opportunity with the upcoming Net Zero Strategy to set a clear direction of travel through predictable regulatory targets, easily accessible policy incentives and much improved information and local support measures. It is vital that energy efficiency and low-carbon heat schemes are placed on a long-term footing, so that industry can invest, train its workforce, and grow consumer confidence.”

Brian Berry, Chief Executive of the Federation of Master Builders, said:

“With our homes consuming 35% of all energy in the UK and emitting 20% of our total carbon dioxide emissions, it’s clear that net zero will only be possible alongside a long-term plan to green our homes. Short-term interventions, such as the prematurely closed Green Homes Grants Scheme, served only to undermine, rather than create, certainty for both consumers and builders.”

 “Any policy framework must be long-term, allowing time for local building firms to complete the relevant training to retrofit homes. Homeowners need to be informed about what changes need to happen to their home to make it environmentally-friendly. We recommend each building should have a renovation passport, setting out the path to net zero. We also need a locally-led approach that is sensitive to local communities’ needs.”

Housing

Ambitious trials and policy clarity key to support hydrogen

17th August 2021

Reacting to the publication today of the Hydrogen Strategy, Nick Molho, Executive Director at the Aldersgate Group said: “The Government’s consultation on business models to make large-scale low carbon hydrogen production commercially viable and the commitment to develop a credible standard to ensure UK hydrogen production is consistent with the net zero target are two important steps forward. Low carbon hydrogen has a crucial role to play in cutting emissions in complex sectors of the economy, such as long-range road transport and heavy industry in both clustered and dispersed sites. The key to ramping up production and cutting the cost of low carbon hydrogen will be to pursue meaningful demonstration projects in sectors such as steel, co-ordinate the deployment of supportive infrastructure, support investment in skills, and provide rapid clarity on the market mechanisms industry can rely on to make a predictable return on investment.”  
 
Nick Molho added: “The Government’s hydrogen production strategy must take into account the fact that different types of hydrogen are at different stages of development. They therefore have different requirements in terms of the innovation, infrastructure and policy support they require, with green electrolysis for example needing support to scale up over time from pilot trials initially to large commercial scale projects. Given the currently limited availability of low-carbon hydrogen, it will be essential that the use of hydrogen is first of all prioritised towards areas where few low carbon alternatives exist to cut emissions, such as in heavy industry and long-distance transport.”   

hydrogen

Evidence is clear – global action on climate change cannot wait

9th August 2021

Responding to the publication of the Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report, Nick Molho, Executive Director at the Aldersgate Group, said: “The message from the IPCC is crystal clear: climate change is happening here and now and it is caused by greenhouse gas emissions linked to human activity. Today’s report has huge implications for policy makers in terms of tackling greenhouse gas emissions and adapting to the levels of climate change the world is already locked into. To keep the 1.5C target alive and adapt to a changing climate, governments around the world must provide unequivocally clear policy signals to significantly accelerate the investment that is urgently needed in ultra-low carbon infrastructure and nature-based solutions. The business and finance communities have a clear role to play too by taking on credible net zero emissions and biodiversity restoration targets and delivery plans.”
 
Nick Molho added: 
“The UK Government has a critical role to play in the coming months. On the global stage, it needs to gather maximum momentum to bring emission reduction pledges from all key emitting nations in line with the 1.5C target and look to underpin this with tangible global collaboration and initiatives in areas where cutting emissions is particularly complex. Domestically, the expected publication of the net zero strategy and the finalisation of the Environment Bill provide the Government with a unique opportunity to set out the detailed and comprehensive policy framework to unleash the low-carbon investment that is needed across the UK’s homes, industry, energy, transport and land management sectors and maximise the job creation opportunities that will come with this.”

Ice caps

Theresa May appointed new Chair of the Aldersgate Group

19th July 2021

Today, the Aldersgate Group announces the appointment of the Rt Hon Theresa May MP as its new Chair, with effect from Tuesday 20 July 2021. She will take over from former Labour MP Joan Walley, who has chaired the Aldersgate Group for the last six years. Theresa May will support the Group’s ongoing work on the delivery of the UK’s net zero emissions and nature restoration targets and ensure the UK can build a globally thriving green economy in the process.

The appointment comes as the Aldersgate Group welcomes new business members from the facilities, retail, water, legal and energy sectors, and is involved in three major projects on green finance, resources and waste, and industrial decarbonisation.  

The Aldersgate Group is delighted to announce the appointment of Theresa May as its new Chair, as the organisation looks forward to a critical year for the climate, environmental and economic recovery agenda.

The appointment is a landmark moment for the Group, whose members include leading businesses, NGOs, professional institutes, and academic institutions. The former Prime Minister and MP for Maidenhead will bring immense leadership to the role and a commitment to driving action for an environmentally sustainable, net zero emissions and competitive economy.

As Prime Minister, Theresa May enacted the UK’s landmark commitment to reach net zero emissions by 2050, making the UK the first major economy to enshrine this target in law. She also oversaw the publication of the Clean Growth Strategy and the decision to end unabated coal-fired electricity generation in the UK by 2025, both of which are helping accelerate emission cuts in the power sector and driving the growth of renewable generation such as wind and solar.

On the environment, her Government published the 25 Year Environment Plan, which provided an ambitious framework to protect and restore the natural world within a generation, a vision which is now in the process of being enshrined in the Environment Bill currently going through Parliament.

Theresa May will assume her role on 20 July 2021. She will be handed the baton by current chair, former Labour MP Joan Walley, who has completed a two-term period of office and been an asset for the Group since 2015.

Today’s announcement comes at a significant moment for the Aldersgate Group, with the organisation welcoming new members from the facilities management, retail, water, legal and energy sectors including Mitie, the Co-operative Group, Wessex Water, CMS and Octopus Energy. Their expertise and insight will bolster the Group’s knowledge base across a range of important sectors where the Aldersgate Group is driving policy change to support more rapid cuts in emissions and actions to restore the natural environment.  

The Aldersgate Group is as active as ever in this crucial time for the climate and environmental agenda, with ongoing work to support the delivery of the UK’s net zero and nature restoration targets and green economic recovery ambitions. The Group is working on three major projects ahead of the crucial COP26 climate summit, focused on the future of green finance [1], resources and waste [2], and accelerating the decarbonisation of heavy industry [3].

Theresa May, incoming Chair of the Aldersgate Group and MP for Maidenhead, said: “I am joining the Aldersgate Group to champion the business case for decarbonising the UK economy, improving resource efficiency, and investing in the restoration of nature because we are at a crucial crossroad for our climate and the environment. As Prime Minister, I was proud to lead the UK to be the first major economy to enshrine the net-zero emissions target into law and publish a strategy to overturn the decline in nature within a generation. It is vital we now accelerate our progress towards these ambitious targets and develop clear delivery plans.”

Joan Walley, outgoing Chair of the Aldersgate Group, said: "It’s been a privilege to lead the Aldersgate Group as Chair for the last six years. I am proud of the contribution we have made on setting the zero carbon and nature recovery agenda. I am delighted to leave a legacy that puts the organisation in a strong position, with membership at its highest since the Group was formed and exciting new reports on key policy areas on the horizon. I have no doubt that under Theresa May’s leadership, the Group will go from strength to strength and play a key role in leading the conversation on climate and the environment and driving ambitious policy in the critical years to come.”

Nick Molho, Executive Director, Aldersgate Group, said: “We are delighted to welcome Theresa May as our new Chair at this critical time for the Group and the environmental agenda. Decisions made in the next few years will determine whether the UK economy is on a credible pathway towards net zero emissions and whether the country is on track for overturning the decline in its natural environment within a generation. Mrs May’s unrivalled experience and her passion for the climate, environmental and clean growth agenda will be a huge asset to the organisation. As a Group, we would like to give our profound thanks to our outgoing Chair Joan Walley who has been an inspiring leader and a key part of the Aldersgate Group’s success over the past six years.”

Peter Simpson, Chief Executive, Anglian Water, said: “I’m delighted to welcome the appointment of the Rt Hon Theresa May MP as the Aldersgate Group’s new chair.  As long-time Aldersgate supporters, I look forward to working with her and other members to promote the strong environmental consensus there is amongst leading businesses and civil society groups.  I would also like to congratulate Joan Walley as she comes to the end of her very successful term.  The Aldersgate Group goes from strength to strength, and under Theresa’s leadership, the Aldersgate Group will be a decisive voice in shaping policy for the net zero age.”

Mark Versey, Chief Executive Officer, Aviva Investors, said: “Theresa May’s experience and longstanding commitment to the environment, including legislating the UK’s world leading net-zero target, will be invaluable and we look forward to working with her.”

Sergio Menendez, EMEAA Regional President, CEMEX, said: “CEMEX is delighted to welcome the Rt Hon Theresa May MP as the new Chair of the Aldersgate Group. In taking up this appointment, it shows to policy makers and wider society in the clearest way possible why it is vital that both government and businesses keep focused on delivering net zero emissions and other vital sustainability goals.”

Ece Ozdemiroglu, Founding Director, Eftec, said: “Theresa May’s arrival as Chair will boost the Aldersgate Group’s contribution to delivery of the legally binding net zero target and 25 Year Environment Plan, which are key parts of the legacy of her premiership. This combination of respected leadership and credible implementation across the Group’s diverse membership is needed to give confidence to investors in net zero, climate adaption and new environmental markets across all sectors of the economy.”

Michelle Scrimgeour, CEO, Legal and General Investment Management, said: “Climate change is not just an urgent issue for society, but also a significant investment opportunity. As business leaders, we can align our influence and financial might, collaborating with other companies and policy-makers, including through the Aldersgate Group, to help accelerate the net zero ambition, producing positive sustainable economic and environmental returns. This is inclusive capitalism in action.”

Duncan Clark, Head of UK Region, Ørsted, said: “The economic and job creation opportunities created by the net zero target are significant and we are working hard in the offshore wind sector to skill up and grow domestic supply chains. We would like to congratulate Theresa May on her new role and look forward to working with her and the team at Aldersgate Group to maximise the benefits of the net zero transition across the UK.”

Beccy Speight, Chief Executive, RSPB, said: “As a long-standing member of the Aldersgate group, we’re pleased to welcome Theresa May as its new Chair. Aligning economic policy with the huge steps we must all take to address the climate and nature emergency will be fundamental over the coming decade and beyond. The work of the Aldersgate Group is vital in bringing both NGO and business voices together to find solutions to the emergency facing our natural world and to make a shared case for the legal and policy frameworks needed. Its work in helping to shape and influence those policies with urgency, bringing together organisations who share this mission has never been more important and we look forward to working together to secure a healthier future for us all.”

Carl Ennis, CEO, Siemens plc, said: “I am delighted to welcome Rt. Hon. Theresa May MP as Chair of the Aldersgate Group.  An ambitious, co-ordinated and accelerated approach to the climate and environmental agenda is critical if the UK is to reach a timely, equitable and economically beneficial net zero emissions future. As an experienced and respected figure, Theresa May will be an effective ambassador for this vital work.”

John Scanlon, Chief Executive Officer for SUEZ recycling and recovery UK said: “With Glasgow hosting COP26 this autumn, all eyes are on the UK to lead the way in combatting climate change. Protecting our environment goes to the very heart of our work at SUEZ and only an ambitious environmental agenda can bring about the systemic change needed to create a resource efficient economy. Aldersgate recognised early on that environmental sustainability and economic prosperity are intrinsically linked and that for our nation to thrive we need policies that can credibly deliver on both counts. In this pivotal year for our environment and our economy, I’m delighted to welcome Theresa May as Chair of the Aldersgate Group and look forward to working with her and the Aldersgate team to tackle our environmental challenges.”

Rick Willmott, Group Chief Executive, Willmott Dixon, said: “We warmly welcome Theresa May as the new Chair of the Aldersgate Group.  At Willmott Dixon, last year we announced what we believe are the construction industry’s most ambitious sustainability targets to 2030 because we see that putting net zero and green growth at the heart of our business is core to our continued development and success.

“The work of the Aldersgate Group in shaping policies that tackle environmental challenges helps drive investment in projects, innovation, skills and supply chains. Around 350,000 new roles in construction could be created by putting the UK economy on track for net zero emissions by 2050.”

Tanya Steele, CEO, WWF-UK said: “It is great to see the appointment of Theresa May as Chair of the Aldersgate Group.  As a former Prime Minister, she will bring to the group enormous experience and a clear understanding of the scale of ambition required if both governments and businesses are to deliver the cuts in emissions needed to keep global temperature rise to 1.5 degrees.

This could not be a more important year in the fight to restore the planet, our one shared home, and the UK has a central role to play as host of COP26. I look forward to continuing to work with the Aldersgate Group in the mission to build a low-carbon, nature-positive economy, the only route to long-term prosperity.”

—ENDS—

In line with the government’s Business Appointment Rules, Mrs May consulted the Advisory Committee on Business Appointments before taking up the appointment of Chair at The Aldersgate Group. This position is a voluntary role.   

[1] The Aldersgate Group recently released a report exploring the next steps for the UK’s green finance strategy. To find out more, you can access the full publication here: Financing the future: Driving investment for net zero and nature restoration. The report was launched at a webinar with Economic Secretary John Glen MP on 22 June 2021.

[2] The Aldersgate Group published its latest report, Closing the Loop: Time to Crack on with Resource Efficiency,  on 15 July 2021. The report, which was launched at a webinar with Chair of the Environmental Audit Select Committee Philip Dunne MP, assesses recent progress in England’s resources and waste policy and puts forward a number of recommendations to drive greater resource efficiency across the economy.

[3] The Aldersgate Group will publish two major reports in early September, setting out key policy recommendations to accelerate the decarbonisation of heavy industry, lower industrial electricity prices and support industrial competitiveness in the process. These have been commissioned from UCL and Frontier Economics.

Theresa May

England’s resource efficiency agenda must be accelerated with urgency

15th July 2021

In a new report out today [1], the Aldersgate Group calls on the Government to accelerate progress on resource efficiency to secure major benefits in terms of emission savings, reduced environmental impacts, job creation and economic resilience.  Although government strategies have built a positive overarching vision for resource efficiency, policy commitments in this area have lacked ambition, pace and detail, and appear to have received limited buy-in from other government departments beyond the Department for Environment, Food and Rural Affairs (Defra).

The Group argues that government must improve collaboration across departments to achieve further progress, accelerate the implementation of policies that improve how products, industrial materials and infrastructure are designed, and introduce measures to reduce consumption in the first place, such as through citizen engagement campaigns and incentivising service-based business models.


Driving greater resource efficiency across the economy would deliver significant economic and environmental benefits, with research suggesting that such action would deliver 80% of the additional emission savings required to deliver the UK’s Fifth Carbon Budget with a net gain in Gross Value Added of £9.1bn by 2030. [3]

However, the Aldersgate Group’s extensive engagement with businesses, professional institutes and civil society organisations shows that England’s policy on resources and waste has to date been too piecemeal and subject to repeated delays. Whilst the UK Government outlined a positive policy ambition in its 2018 Resources and Waste Strategy for England, insufficient progress has been delivered since, with the recent Waste Prevention Programme restating many pre-existing policy commitments.

In its new report out today, Closing the Loop: Time to crack on with resource efficiency, the Aldersgate Group calls for much greater urgency, stronger cross-government collaboration, and a more systemic approach to improve resource efficiency across the economy. The report sets out priority areas where the development and implementation of existing policy proposals needs to be accelerated, highlights policy gaps where new proposals are needed, and makes specific policy recommendations to improve resource efficiency across the construction and automotive industries, two resource intensive sectors.  

Key recommendations for the future of England’s resources and waste policy include:

  • Resource efficiency should become a cross-government priority beyond efforts led by Defra, with all departments such as HM Treasury, BEIS, DfT and MHCLG contributing to policy development and implementation in this area. This should include close collaboration with devolved administrations, with nations such as Wales having made significant progress on this agenda.
     
  • The Government should accelerate the implementation of proposals which will have the most rapid impact in improving product design. This includes accelerating the development of mandatory eco-design standards and lifecycle assessments for a growing range of products and rolling out Extended Producer Responsibility (EPR) Schemes beyond packaging, with a focus on ambitious fee modulation mechanisms, clear definitions and a close monitoring of performance. The design and role of Deposit Return Schemes should be clarified, with a particular focus on introducing these schemes in areas where the introduction of EPR schemes and eco-design criteria may not deliver sufficient progress.
  • The Environment Bill – which will introduce long-term, legally binding targets on waste reduction and resource productivity - should be amended to provide for more robust interim targets that will provide businesses with greater clarity on the near-term policy actions that the Government will take to meet the long-term targets under the Bill.   
     
  • New proposals should be put forward to tackle ongoing market barriers that are slowing the take-up of more resource efficient business models. This should include developing resource efficiency criteria for the £290 billion a year spent by the UK on public procurement [4], introducing fiscal mechanisms – such as variable VAT rates and a broader tax on single-use items – to help more resource efficient products and materials compete on cost, and funding for public awareness campaigns to build consumer trust in resource efficient products and services. The use of targeted public finance – such as through the UK Infrastructure Bank – could also play a critical role in attracting private investment in much needed infrastructure to support greater rates of recycling, repair, remanufacturing and re-use.    
     
  • A comprehensive strategy on low carbon skills will be essential to support an economy-wide drive towards greater resource efficiency. This should include embedding climate change and environmental sustainability at all stages of the national curriculum, encouraging a much higher uptake of STEM subjects, and broadening the scope of the Apprenticeship Levy Standards. To support workers in need of reskilling, the Government should continue to provide financial support for training, upskilling and retraining through the National Skills Fund and encourage Further Education Institutions to offer a broader range of flexible, short-term courses.
     
  • The Government should facilitate greater trade in circular products and materials, by featuring circular economy principles in the trade and sustainable development chapters of trade agreements. As the Aldersgate Group set out in a recent policy briefing, [5] Government must also use its trade policy to provide a level playing field to ensure that domestic businesses innovating in resource efficiency are not exposed to unfair competition from imports with lower environmental standards.

The report also calls for a range of measures to drive greater efficiency in the resource intensive sectors of construction and automotive. This includes the introduction of design regulations for buildings, streamlined lifecycle assessment methodologies for buildings and vehicles, and the introduction of mandatory product standards for construction materials and vehicle components.

Nick Molho, Executive Director of the Aldersgate Group, said: “Improving resource efficiency across the economy makes sense on all counts: it reduces demands on the environment, cuts emissions, makes our economy more resilient to supply shocks, and can grow supply chains and create jobs in areas such as recycling, repair, remanufacturing and reuse. The Government set some good ambitions in 2018 but the time has come to move to the delivery phase. What we need now need is an urgent, cross-government and systemic approach that improves product design, supports the development of new business models and engages citizens to help drive down resource consumption.”

Martin Casey, Director, Public Affairs, Europe at CEMEX said: “CEMEX welcomes this important report by the Aldersgate Group and the scope of its recommendations which can drive forward the goal of real resource efficiency across the whole economy. It’s vital that the policy framework, Government, and the regulatory bodies proactively take note and enable businesses to maximise their resource efficiency potential and deliver on the promise of a truly circular economy."

Dr Adam Read, External Affairs Director at SUEZ said: “If we can’t get BEIS, DEFRA, MHCLG and DfT to develop policies that complement one another and support societal change in a holistic way, then we may end up with any number of unintended consequences that undermine our drive towards greater resource efficiency and sustainability. This welcome report from the Aldersgate Group highlights another of SUEZ’s key concerns, namely a lack of real focus by Government on actually reducing consumption and incentivising reuse, refill and repair. The portfolio of recent policy reforms that have been consulted on all focus mainly on driving better recycling, with the DEFRA Waste Prevention Programme failing to deliver any real target for reducing consumption and highlighting the important role of the consumer in this process. The UK needs leadership around better citizen awareness campaigns, product eco-design, life-cycle thinking and closed loop materials management, and this must happen soon if we are to give ourselves a chance of decarbonising by 2050."

Libby Peake, Head of Resource Policy at Green Alliance said: “We know that the overconsumption of resources is driving both climate change and nature’s degradation and yet it is very rarely addressed by government policy. The good news, as this report outlines, is that there are many simple actions the government could – and should – be taking to improve the situation which would not only be good for the environment, but also the economy and the public. It really is time to get on with it.”

Peter Jelkeby, Country Retail Manager and Chief Sustainability Officer, IKEA UK and Ireland said: “Developing a circular economy is essential for building a low-carbon business and society. At IKEA, our aim is to transform into a fully circular business. To do this, we are committed to designing all of our products using only renewable or recycled materials, and to develop circular services. As such, we fully endorse the recommendations in this timely report, and the call for Government to accelerate its progress on resource efficiency, ahead of COP26, making the UK a leader in this field. We also welcome the call for more green jobs, firmly rooted in the skills we will need to make the circular economy a reality. At IKEA, our Recovery department employs over 350 people in the UK. Not only do they play a vital role in helping us strive for zero waste, but they are also a living example of how we are creating the retail workforce of the future; supporting a circular, green economy and our collective journey to climate positivity.”

Anna Turrell, Head of Environment at Tesco said: “If we are to meet our shared ambition to deliver a net zero economy, we must rethink how we manage the resources available to us more efficiently. We support the Aldersgate Group’s recommendations that the solution is to create a closed loop circular economy and that this is going to require substantive actions from business, industry and government to achieve. We are playing our part and working with partners to reach this ambition by, for example on packaging, removing and reducing single use packaging wherever possible, introducing reusable alternatives, and working to ensure everything that’s left is recyclable as a part of a closed loop.”

David Symons, UK Director of Sustainability at WSP said: “Using materials more efficiently is an easy way to grow Britain’s productivity, increase resilience and help deliver a net zero economy. Government has a great opportunity to up the pace on waste management - growing the economy and delivering on one of the public’s highest priority environmental issues.”

Julia Barrett, Chief Sustainability Officer at Willmott Dixon said: “The built environment consumes almost half of the materials extracted globally every year, so as this report sets out, we need a systematic rethink of how we design, construct and use buildings. At Willmott Dixon we have set a target of zero avoidable construction waste by 2030 and welcome the recommendations put forward today: for Government to urgently accelerate the transition to the circular economy by using fiscal mechanisms to change behaviour, for government procurement to demonstrate leadership, and for the creation of cross departmental policy and standards to drive resource efficiency.”

-ENDS-

[1] The Aldersgate Group’s new report Closing the Loop: time to crack on with resource efficiency is available here.

[2] The report will be discussed at a public webinar from 9.30am to 11.00am on Thursday 15th July, with panellists from multiple business sectors and civil society. You can register here.

[3] Sixth carbon budget data from Green Alliance (2018) Less in, More Out available here, and GVA data from Suez/Eunomia (2016) A resourceful future: expanding the UK economy available here.

[4] Cabinet Office (2020) Transforming public procurement available here.

[5] In June 2020, the Aldersgate Group published a report setting out why the UK’s trade policy should be aligned with its climate and environmental goals. This report is available here.


Response to the Green Jobs Taskforce Report

14th July 2021

Reacting to the launch of the Green Jobs Taskforce's Report, Nick Molho, Executive Director at the Aldersgate Group and member of the Green Jobs Taskforce, said: “The Green Jobs Taskforce has been a great example of industry, trade unions, the skills sector, civil society and government working together to make the net zero transition a success for the UK economy, its workforce and citizens. There is strong agreement across all sectors that we can achieve the UK’s climate and environmental targets in a way that grows new low carbon supply chains across all parts of the economy and creates a significant number of high quality jobs across the country. Achieving this ambition is ultimately down to the actions that government, industry and the skills sector will take in the coming years.
 
To deliver this objective, the UK needs to have a detailed policy plan for its net zero target, mainstream the teaching of climate change and green skills across all stages of the education system, and provide those already in the workforce with the financial and flexible learning support they need to have access to reskilling.”

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Transport Decarbonisation Plan is an important step forward, but key decisions need to follow swiftly

14th July 2021

Reacting to the publication of Government’s Transport Decarbonisation Plan, Ana Musat, Head of Policy at the Aldersgate Group, said:  “The Transport Decarbonisation Plan is an important milestone, setting out a comprehensive blueprint to cut emissions across all modes of transport and boost active travel. It is particularly welcome to see the proposal to phase out petrol and diesel trucks by 2040, which will play a key role in helping grow supply chains for electric vehicles and secure a level playing field for those already investing in low carbon mobility solutions.
 
Government’s commitment to electrify its fleet by 2027, bolstered by similar commitments from other businesses across the UK, is an important way to grow demand and offer confidence to manufacturers. The ‘ZEV mandate’ is another promising policy lever, which has successfully grown the market in California and China, and consulting with industry on how best to implement that in the UK is a promising move.” [1]

Ana Musat added: “We now need to ensure that the transition to electric mobility is just and benefits everyone. To achieve this, good charging infrastructure needs to be in place across the country, so that those without off-street parking and fleet drivers are able to conveniently charge their vehicles. This is why the delivery of chargepoints must become a national infrastructure priority, led by central government, with increased levels of coordination between local authorities. Currently, investors in public charging infrastructure in particular, have to understand the different costs and planning requirements from different local authorities, which can act as a barrier to infrastructure development.
 
In addition, measures to ensure electric vehicles and trucks are financially accessible will be essential. The Plug-in Grant is key in reducing upfront cost, but other measures, including zero-interest loans for EVs like those available in Scotland, and policies to grow the market and boost consumer confidence in a second-hand EVs, will need to be developed.” [2]
 
—ENDS—

[1] In October 2020, the Aldersgate Group published a report outlining the policy next steps for decarbonising a range of sectors, including transport. The report Building a net zero emissions economy: Next steps for government and business is available here.
 
[2] Aldersgate Group is part of the Coalition for the Decarbonisation of Road Transport (CDRT), convened by the Green Finance Institute. The Coalition will publish a report by the end of this month with recommendations and demonstrator projects to unlock private finance into three key areas of road transport decarbonisation: charging infrastructure, consumer finance and battery production.

EVs

Detailed Net Zero Strategy must be published ahead of COP26

24th June 2021

Reacting to today’s Progress Reports from the Climate Change Committee [1], Nick Molho, Executive Director of the Aldersgate Group said: “The only way the UK can credibly protect its economy from climate risks and get on track for achieving net zero emissions is by making climate change a top priority for all government departments and supporting this with detailed and timely policy plans. Today’s Progress Reports from the Climate Change Committee show that this is clearly not the case at present.

"This parliamentary term is critical for meeting the UK’s climate and adaptation targets and doing so in a way that delivers supply chain growth and job creation across the country. The extent to which the UK can minimise the costs and maximise the economic opportunities from the net zero transition and adapting to climate change will ultimately depend on the policy decisions that the Government makes in the years to come.”  

Nick Molho added: “Whilst some welcome progress has been made in cutting emissions in the power sector, our extensive engagement with businesses show that there is a critical lack of policy measures to drive low carbon investment in buildings, transport, agriculture and heavy industry. The Government can answer these concerns by publishing a detailed and cross-sectoral Net Zero Strategy ahead of COP26 and carefully co-ordinating this Strategy with the funding plan to be published by the Treasury as part of its Net Zero Review. [2]” 

- ENDS -

[1] The Climate Change Committee’s Progress Reports on climate change mitigation and adaption will be published at 00.01 on Thursday 24 June.

[2] As part of a major project with Frontier Economics and University College London, the Aldersgate Group will be publishing detailed reports in early September, setting out key policy decisions to successfully decarbonise UK heavy industry and maximise economic opportunities in the process.

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UK should seize unique opportunity to green its financial system

22nd June 2021

In a new report published today [1], the Aldersgate Group urges the Government to use the UK’s current leadership position on climate change and the environment, and its ongoing review of financial services regulations [2], to embed environmental sustainability into the rules governing the UK’s financial system and influence similar changes to international rules and standards. The Group also calls for the publication of more detailed and comprehensive policy commitments to accelerate and lower the cost of private investment in the low carbon and nature restoration projects needed to meet the UK’s climate and environmental targets.

The report – which is based on extensive engagement with leading financial institutions, FTSE100 businesses and civil society organisations – sets out a range of recommendations to: (i) more deeply embed climate and nature restoration targets into the decision-making of financial institutions, businesses and Government; (ii) accelerate and lower the costs of private investment in green projects; and (iii) work closely with international partners in areas of mutual interest, such as carbon trading, disclosures and green taxonomies.

~ The key findings of the report will be discussed at a webinar on Tuesday 22 June at 9.30am with John Glen MP, Economic Secretary to the Treasury, and a range of senior speakers from the business, financial institution and NGO community. [3] ~

The UK Government has made welcome commitments on green finance since the publication of the Green Finance Strategy in 2019, including mandating that disclosures are aligned with the recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD) by 2025, and launching the new UK Infrastructure Bank with a mission to support the delivery of the net zero target. The Government has also rightly identified mobilising green finance as one of the four key themes at COP26.

However, climate and environmental considerations are still not sufficiently embedded in the UK’s financial system, with only a third of Prudential Regulation Authority-regulated banks and building societies having a science-based target or net zero strategy. [4] Whilst private investment into low carbon and environmental projects is on the rise, it remains insufficient, with some complex projects facing significant market barriers in areas such as heavy industry and nature restoration. This comes at a time when the Climate Change Committee estimates that some £50bn in additional infrastructure investment will be needed every year from 2030 onwards to put the UK on track for the Sixth Carbon Budget and its 2050 net zero emissions target. [5]

In light of these challenges, the Aldersgate Group’s latest report Financing the future sets out a range of recommendations to put the whole financial sector on track to deliver the UK’s net zero and environmental targets, whilst simultaneously unlocking private investment to drive low carbon innovation, supply chain growth and job creation across the UK. The report highlights that the ongoing review of the regulatory framework governing the UK’s financial services sector – made necessary by the UK’s departure from the EU – provides an opportunity for the UK to lead the way in incorporating environmental sustainability into the regulatory framework governing its financial system and, in doing so, influence key changes to the international financial rules and standards.

Key recommendations include:

Accelerating the take-up of climate-related disclosures

  • The Government should support a review of existing guidance, standards and definitions governing climate-related disclosures (including the TCFD, Streamlined Energy and Carbon Reporting, and the Carbon Disclosure Project) to ensure a more rapid take-up and greater consistency and comparability between disclosure requirements. The report also calls on regulators to provide guidance to improve voluntary reporting of scenario analysis under the TCFD, with a view to introducing mandatory scenario analysis from 2025.

Embedding climate and environmental targets at the heart of the financial system

  • The Government, Bank of England and the Financial Conduct Authority should consult on a roadmap to introduce regulation that requires financial institutions to produce net zero targets and transition plans in the 2020s, with regulation starting no later than 2025. Part of this consultative process should involve regulators providing guidance to support and encourage all sub-sectors of the financial services industry to publish net zero transition plans and targets on a voluntary basis, with guidance to be published no later than 2022.
  • Pension fund managers should be required to automatically enrol new beneficiaries into Paris Agreement-aligned pensions funds and proactively engage with existing beneficiaries to outline the benefits of transferring fund holdings into Paris-aligned funds and environmental, social and governance (ESG) schemes.
  • UK policy makers and regulators should work together to set capital treatment for banks and insurers in a way that reflects the long-term risks of assets to financial stability, to incentivise more strategic asset allocation in environmentally sustainable assets and a transition away from high carbon or environmentally damaging assets.

Maximise the impact of public finance to crowd in private investment

  • Maximise the impact of targeted public finance to crowd in private finance in complex low carbon and environmental projects [6]. In particular, the recently launched UK Infrastructure Bank (UKIB) should be strengthened by including environmental resilience as part of its mandate, ensuring that it is able to tackle different market failures as market conditions evolve and by increasing its capitalisation over time. There should be a joined-up strategy to ensure that the focus of the UKIB and the Government’s green sovereign bond issuances are carefully co-ordinated to maximise the impact of public finance in overcoming market barriers.

Introducing strong policy signals to accelerate private investment in low carbon infrastructure and nature restoration projects

  • The Government should accelerate and lower the cost of private investment in low carbon infrastructure and services by publishing a detailed and cross-Government net zero delivery strategy ahead of COP26. This should set out the key policy decisions that will be adopted over the next five to ten years on a sector-by-sector basis to put the UK on a credible pathway towards its net zero target. [7]
  • The Group also calls for more ambition on carbon pricing and in particular a strengthening of the UK Emissions Trading Scheme (UK ETS). This should include Government rapidly consulting on the alignment of the UK ETS with the net zero target, setting a rising carbon price trajectory throughout the 2020s, gradually phasing out free emission allowances and expanding the scope of the scheme to a growing number of economic sectors where feasible.
  • Building on the Dasgupta Review commissioned by HM Treasury, urgent efforts should be made to embed the value of nature into economic policy and investment decision making and accelerate private investment in nature restoration projects. This requires strengthening the target setting and delivery process in the Environment Bill, making reporting in line with the new Taskforce for Nature-related Financial Disclosures (TNFD) mandatory in the 2020s, and working towards the introduction of a mandatory requirement for businesses to prepare and publish biodiversity loss mitigation and adaptation targets, and associated transition plans.

Influencing international rules and standards and driving global collaboration on green finance

  • Building on domestic reforms, the UK should use its leadership position on the global climate agenda following the G7 summit and its presidency of COP26 to encourage a greater focus on environmental and climate considerations in the rules and standards governing international financial markets. This should include collaborating with key international partners, including the EU, on areas of common interest such as the development of green taxonomies and climate and nature-related disclosure requirements.
  • The UK should use its presidency of COP26 to finalise a rule book for international carbon trading under Article 6 of the Paris Agreement. The Aldersgate Group would also welcome the restoration of the historical commitment of 0.7% of Gross National Income on Overseas Development Aid, to demonstrate the UK’s dedication to international climate finance.

Nick Molho, Executive Director, Aldersgate Group said: “Meeting the UK’s net zero emissions and nature restoration targets is a significant investment challenge, most of which will be met by the private sector. Providing clear policy commitments and fully embedding the UK’s climate and environmental targets in the way the financial sector operates are key to attracting the level of private investment we need and lowering the cost of finance. The regulatory review made necessary by the UK’s departure from the EU provides the UK with the opportunity to be a world leader in greening the rules governing its financial system and becoming a genuinely world class centre for green finance; the Government should seize it.”

Ian Dickie, Director at eftec, said: “The potential environmental markets on biodiversity, carbon and nutrients etc are now real. The Government needs to provide clear rules, adequate governance and invest to leverage private finance; this will give confidence to investors and benefit the environment. The Aldersgate Group message, that good environmental regulation is good for the economy, has never been more relevant".

Stephanie Maier, Global Head of Sustainable and Impact Investment, GAM Investments, said: “The recent Net Zero by 2050 report from the International Energy Agency provided compelling evidence of the enormous effort that will be needed to decarbonise the sector; private finance and investment have a pivotal role in supporting both this and the transformation of the whole economy. This report from the Aldersgate Group sets out recommendations for Government and financial regulators to facilitate and accelerate this transformation by capitalising on the opportunity presented by COP26.”

Raphaëlle Vallet, Manager, Sustainable Finance, Green Investment Group, said: “Achieving Net Zero requires a colossal effort across the public and private sectors. We urgently need to mainstream sustainability throughout policy frameworks and investment decisions. Aldersgate Group’s report is an excellent contribution to the agenda, with practical steps that will help drive finance towards a net zero future.”

Sam French, Business Development Director, Johnson Matthey, says: “The recommendations for financing green projects and infrastructure in Financing the future are critical to accelerate innovation in areas such as hydrogen and CCUS, and drive emissions reductions across the UK. In particular, it is vital that the Government uses carbon pricing as a tool to drive funding towards low carbon technologies, by aligning the UK Emissions Trading Scheme (ETS) with net zero and the EU ETS, and giving stability to businesses through a carbon pricing escalator. In addition, developing supportive business models for hydrogen and CCS will be essential to enable businesses to invest in these new markets allowing the UK to position itself as a leader in both deployment and the associated supply chain.”

Paul Morling, Economist at the RSPB, said: “Our future economic prosperity depends on the choices we now take to build back better from Covid and the centrality of climate and nature in recovery strategies. Greening finance is an urgent priority and this report sets out the necessary actions to effect the sustainable transition we need to see for our wellbeing, future generations and nature.”

Bevis Watts, Chief Executive Officer at Triodos Bank, said: “We are pleased to support the findings of this important report. We welcome the calls to support investment in areas such as nature-based solutions, but while increasing interest in the environmental crises and net-zero is encouraging, we now need a step change in the ambition of the financial sector to have any hope of meeting the scale of the challenges we face. Achieving this will require drastic changes to the structures of our financial systems and the regulation that supports it.

Robust, science-based net zero targets are critically important and we also need to recognise the inherent value of our environment and the challenge we have to redesign systems to reflect much more than a financial bottom line. It is time for the finance sector to play its role and use more imagination in how economic outcomes can be linked to investment in nature alongside the broader social needs outlined in the UN Sustainable Development Goals. This is central to developing a new economy built on values rather than value, and that has an integral connection to societal health and environmental limits.”

Julia Barrett, Chief Sustainability Officer at Wilmott Dixon, said: “Private sector investment will be essential in helping the UK meet its climate and environmental objectives and secure a green recovery, as today’s report by Aldersgate Group makes abundantly clear.  For businesses, the publication of a comprehensive and joined-up Net Zero Strategy by Government ahead of COP26  will be fundamental to demonstrate the direction of travel for each sector in the run up to 2050, helping them allocate capital in the most efficient way to meet these milestones. 

In the construction sector specifically, binding regulatory standards and tax incentives to drive investment in energy efficiency and low carbon heat in existing buildings will be key. Furthermore well-designed and properly enforced, ambitious environmental regulations will help mobilise investment in the infrastructure, innovation, skills and supply chains needed for the whole sector to meet net zero.”

-ENDS-

[1] The new report Financing the future: Driving investment for net zero emissions and nature restoration is available here. The report was developed with the support from the Centre for the Understanding Sustainable Prosperity (CUSP).

[2] The ongoing Financial Future Regulatory Framework Review considers how the regulatory framework governing the UK’s financial services sector needs to evolve to reflect the UK’s position outside the EU. More information is available here.

[3] The report will be debated at an event from 9.30am to 11.00am on Tuesday 22 June, with panellists from multiple business sectors. You can register here.

[4] PwC (October 2020) Rising to the challenge: climate risk in the UK banking sector, available here.

[5] Currently, the UK is seeing a major investment gap in both low carbon infrastructure and natural capital. Research from the Climate Change Committee (CCC) has estimated £50 billion of annual additional investment will be required from 2030 onwards to deliver the net zero target, in addition to current economy-wide annual investment of just under £400 billion. The largest increases in investment are needed for building low carbon power capacity, retrofitting buildings, developing batteries and putting in place the required infrastructure for electric vehicles. The Institute for Public Policy Research has estimated that nature restoration alone could need as much as £4.7 billion of additional funding each year.

[6] The crowding in theory of change is based on the principle that rising public spending and Government borrowing drives up private sector demand and spending in areas of the market which have typically been low. This can be achieved by, for example, de-risking new technologies, or “creating a market in the gap” where market failures have existed for a long time.”

[7] In October 2020, the Aldersgate Group published a report outlining the policy detail for decarbonising each sector, titled Building a net zero emissions economy: Next steps for government and business. The report is available here.

 


Launch of the UK Infrastructure Bank marks important milestone for recovery and net zero

17th June 2021

Reacting to the launch of the UK Infrastructure Bank, Nick Molho, Executive Director at the Aldersgate Group, said: “The creation of the UK Infrastructure Bank is a vital and strongly welcomed intervention at a time where the UK economy needs to recover from the disruption brought about by the pandemic and put itself on track for net zero emissions. The Bank has a key role to play in crowding in much needed private investment towards crucial and complex low carbon projects and industries, which can drive innovation, supply chain growth and job creation across the country. However, with the Committee on Climate Change [1] highlighting yesterday that the UK is poorly prepared to deal with the impacts from climate change, it is essential that the Bank also has climate adaptation and nature restoration as a key part of its mandate. It is also key that the Bank be set up as an enduring institution, with the flexibility to tackle different market failures over time as market conditions evolve and with a gradual increase to its capitalisation to ensure that it has the right financial firepower to carry out its mission effectively and tackle the significant market barriers ahead.”

- ENDS -

[1] Climate Change Committee (2021) Independent Assessment of UK Climate Risk

Northern-Powerhouse

Future business resilience depends on urgent climate adaptation measures

16th June 2021

Reacting to the Climate Change Committee’s advice, Nick Molho, Executive Director of the Aldersgate Group said: “Today’s high-quality analysis from the Climate Change Committee makes it abundantly clear that adapting to climate change is an environmental and economic imperative. In addition to devastating impacts on species and habitats, climate change will, without further urgent action, significantly disrupt the UK’s critical infrastructure, supply chains, food supply and business productivity. Businesses are clear that climate adaptation and the delivery of the UK’s net zero emissions target should both be cross-departmental priorities and be fully embedded across all areas of Government policy making.”

Nick Molho added: “A key message from today’s report is that restoring the natural environment – including soils, peatlands, wetlands and forests – will significantly improve the UK’s ability to cope with climate change as well as provide much needed negative emissions to deliver the net zero target. The Environment Bill could play a crucial, positive role here and we urge the Government to strengthen it by introducing binding interim targets that will drive rapid investment in nature restoration projects.”    

Nick Molho concluded: “Businesses also have an important and pro-active role to play in improving the future resilience of the economy. This should include regularly monitoring and disclosing their vulnerability to the physical and regulatory impacts related to climate change, reviewing the environmental impacts and resilience of their supply chains, incorporating climate change adaptation in everyday investment decisions and large corporations supporting smaller businesses in their supply chains to develop adaptation strategies.”  

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Regulatory reform needs to recognise economic benefits of ambitious climate and environmental regulations

16th June 2021

In response to the report produced by the Taskforce on Innovation, Growth and Regulatory Reform, Signe Norberg, Head of Public Affairs and Communications at the Aldersgate Group, said: “Regulation is a vital part of ensuring the competitiveness of UK industry, creating jobs, increasing innovation and driving investment in crucial technologies and goods. We welcome the Taskforce’s recommendation on reforming the UK regulatory framework for energy generation and distribution in line with the Government’s climate ambitions. However, while the report examines areas to modernise regulation and highlights important areas of innovation, such as transport, energy and finance, it fails to adequately incorporate Government’s environmental objectives and net zero ambitions, which will be essential to ensure that the UK builds back greener and creates a green industrial revolution.”
 
Signe Norberg added: “Businesses support ambitious, forward looking, well joined-up and properly enforced environmental regulations, policies and market mechanisms. [1] They are essential to creating a stable environment in which businesses can invest. Previous regulatory efforts have been insufficient in assessing wider social and environmental impacts [2], and to ensure we meet our objectives it is crucial that climate and environmental objectives are placed at the heart of the Government’s regulatory reform agenda.”

- ENDS -

[1] Buro Happold (2021) Fostering Prosperity: Driving innovation and creating market opportunities through environmental regulations, commissioned by the Aldersgate Group
[2] National Audit Office (2016) The Business Impact Target: cutting the cost of regulation

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Business coalition calling for the Planning Bill to deliver net zero and protect nature

14th June 2021

More than 100 prominent business leaders have written to the Prime Minister calling for the net zero transition, nature’s recovery, and climate resilience to be at the heart of the UK’s new planning system.

The letter, which has been co-ordinated by the Aldersgate Group and UK Green Building Council (UKGBC), welcomes the government’s commitments to addressing the housing crisis and reaching net zero by 2050. To ensure it meets its housing targets and environmental commitments, it is vital that the Planning Bill drives a strategic approach to the net zero transition, ensuring that development that is resilient to the impacts of climate change, and that nature can be supported and restored.

The signatories therefore call on the Prime Minister to ensure the new Planning Bill directly aligns with the obligations under the Climate Change Act and plans to reverse nature's decline in the Environment Bill. The letter highlights how planning can play a fundamental role in meeting the Government’s new homes target, achieving its environmental goals, and delivering the infrastructure that is needed for the transition to a decarbonised, climate-resilient economy.

The letter calls for:

  • The new Planning Bill to align directly with, and support, the UK’s net zero target and ambitions for nature set out in the Environment Bill.
  • Clarity on how land allocated for ‘growth’ will be compatible with achieving net zero, securing nature’s recovery and delivering development resilient to the impacts of climate change.
  • Genuinely enhanced levels of protection in planning for designations in the Envrionment Bill intended to support nature’s recovery.
  • Increased resourcing and skills support for local planning authorities, in order to support their abiltiy to set local targets, and deliver across multiple objectives in their local areas.  

The letter has been sent to the Prime Minister, alongside Secretaries of State Rt Hon Robert Jenrick MP, Rt Hon George Eustice MP and the Chancellor of the Duchy of Lancaster the Rt Hon Michael Gove MP.

Julie Hirigoyen, Chief Executive at UKGBC, said: “The upcoming Planning Bill has been earmarked as the biggest planning shake up since World War II and represents a critical opportunity to embed a strategic vision for a decarbonised and climate resilient economy, as well as reversing biodiversity decline. Planning is part of a wider system that is currently failing to deliver both the quality and quantity of homes needed to tackle the environmental and social challenges we face, and the upcoming reforms must form part of a coherent, long term commitment by the Government to environmental protection; one that gives developers clarity around low carbon, nature friendly investment.

“The number of businesses coming together to support this letter shows clear demand for climate change to be at the heart of our planning system, and I urge government to listen to industry and match the level of ambition set out in this letter.”

Signe Norberg, Head of Public Affairs and Communications at Aldersgate Group, said: “Reforms to the planning system present an opportunity for Government to not only tackle one of the most significant social challenges facing the country – the housing crisis – but also to ensure that our planning framework actively supports the UK’s climate and environmental ambitions. To reach net zero emissions by 2050 and reverse the decline of the natural environment, it will be essential that the planning system fully integrates these issues at the heart of the new legislation. By setting forward a strategic approach to planning in line with this, Government can unlock private sector investment, create jobs, generate vital low carbon skills, and build homes that are fit for the future.”


Response to Dasgupta Review good first step but further action needed

14th June 2021

Responding to the publication of the Government’s response to the Dasgupta Review, Signe Norberg, Head of Public Affairs and Communications at the Aldersgate Group, said: “It is positive to see the Government taking on board the findings from the Dasgupta Review and in particular the fact that economic and financial policy decision making has a crucial role to play in supporting the restoration of a healthy natural environment and ensuring the long-term resilience of the economy. The response also confirms that biodiversity net gain will apply to nationally significant infrastructure projects in England, which is an important development that helps bolster this important provision in the Environment Bill.”

Signe Norberg added: “However, today’s response does not amount to the necessary step change called for by Professor Sir Dasgupta. It is vital that the response goes further and clearly lays out a cross-departmental plan with a range of commitments that support the mainstreaming of nature into economic decision making. In addition to contributing to the Better Regulation Framework and supporting the development of nature-related financial disclosures, it is important that the whole of Government takes on the challenge posed by the Review and introduces new measures in the near and long term to support nature’s recovery. An ambitious Environment Bill, with binding interim targets and environmental improvement plans focused on delivering these targets, can play a key role in driving investment to restore the natural environment to the healthy status that our economy and society need.”

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Strengthened Environment Bill key to reach net zero and tackle biodiversity crisis

18th May 2021

In reaction to the Environment Secretary’s speech on nature, Signe Norberg, Head of Public Affairs and Communications at the Aldersgate Group, said: “It is positive to see a strong commitment today from Government on nature, highlighting the importance of biodiversity, peatlands and trees in delivering on our net zero target. To support net zero and tackle the biodiversity crisis, it will be important to see further improvements to the Environment Bill. In addition to the new species target, the Bill must be strengthened by legally binding interim targets and clearer links between environmental improvement plans and long-term targets. Finally, to realise the vision of the Dasgupta Review, Government needs to champion this agenda and its formal response needs to set out a clear action plan that details next steps for Government, business and civil society.”

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Global commitment to a green recovery and progress on carbon trading and climate finance key to successful COP26

14th May 2021

In response to the publication of the UK Government’s COP26 strategy, Nick Molho, Executive Director of the Aldersgate Group, said: “The UK is right to place a strong emphasis on delivering the 1.5 degree goal of the Paris Agreement and send a clear message on phasing out the use of coal globally. This approach is clearly supported by science and countries should aim for more ambition, not less, ahead of this important summit. Plans to push for all new car sales to be zero emissions by 2040 globally and radically increasing international finance to deliver on climate initiatives are also vital.” 
 
Nick Molho added: “However, recent analysis from the International Energy Agency tells us that many parts of the world are pursuing economic stimulus investments that are taking us away from the 1.5 degree goal. To close the gap, it is essential that the UK presidency continues its diplomatic efforts to secure increased climate commitments from the world’s key emitters and a global commitment to pursue and co-operate on delivering a green economic recovery from the COVID-19 crisis.”
 
Nick Molho concluded: “The confirmation that COP26 will be held in person sends a strong signal for international diplomatic negotiations in the months ahead. Particular areas of focus for negotiations must include finalising a rule book for a credible global carbon trading system under Article 6 of the Paris Agreement as well as delivering on today’s commitment to provide climate finance support for developing economies, which are often disproportionately impacted by the growing impacts from climate change. The UK can also strengthen its influence globally by publishing a detailed net zero delivery strategy well ahead of COP26, in a way that provides a clear policy plan for UK businesses and serves as a credible exemplar for other major economies to follow.”

—ENDS—

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Nature restoration and net zero emissions central to national recovery

11th May 2021

Following today’s State Opening of Parliament and Queen’s Speech, the Aldersgate Group calls on Government to embed climate and environmental considerations at the heart of the levelling up agenda.

Nick Molho, Executive Director at the Aldersgate Group said: “The Queen’s Speech clearly set out the importance of delivering a national recovery from the pandemic and spreading economic opportunities across the country. Climate and environmental objectives are central to generating the geographically disperse investment and job creation the UK needs, and they should therefore be embedded at the heart of the Government’s legislative and policy programme.

“The first step must be to urgently bring forward the Environment Bill to progress vital amendments that will strengthen the Bill and allow for robust delivery of environmental targets. These include making interim targets binding and enhancing the linkages between the forthcoming environmental improvement plans and long-term targets. It is also crucial that the changes to procurement and planning policy announced today are consistent with and actively support the UK’s climate and environmental goals.”

Nick Molho added: “Alongside its legislative programme, it is critical that the Government further develops credible policy programmes to deliver on its net zero ambition in this parliamentary session. The highly-anticipated net zero strategy and Treasury’s net zero review must, together, provide a clear policy and funding plan to achieve net zero emissions and maximise opportunities for the economy in so doing.”
 
Nick Molho concluded: “Plans to spark a skills ‘revolution’ unveiled in the speech must prioritise delivery of a low carbon workforce that can drive the net zero transition. Government should carefully consider the upcoming recommendations from the Green Jobs Taskforce to prevent the supply chain issues that hindered the rollout of the Green Homes Grant.”  

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Next parliamentary session vital to advance climate and environmental objectives

10th May 2021

Ahead of State Opening of Parliament and the Queen’s Speech on Tuesday 11 May, the Aldersgate Group calls on Government to place the Environment Bill at the top of its legislative programme. Nick Molho, Executive Director at the Aldersgate Group said: “The Environment Bill must return to Parliament at pace to ensure that the UK establishes an ambitious environmental governance regime which will help reverse the decline of the natural environment. The Bill itself should also be strengthened through the introduction of binding interim targets that ensure continuous action to improve nature, the inclusion of an overarching target which helps guide long-term targets, and guarantees to safeguard the Office for Environmental Protection’s independence.”
 
Nick Molho added: “Climate and environmental objectives should also be embedded in the Government’s levelling up agenda to ensure that areas such as planning and public procurement contribute towards the UK’s ambitious targets. Incorporating these issues as a core part of the Government’s legislative agenda will help boost economic opportunities across the country and create jobs.”
 
Nick Molho concluded: “A clear funding strategy from Treasury and a policy programme focused on delivering the UK’s net zero target must also be priorities in the forthcoming parliamentary session. The highly anticipated net zero strategy needs to set out a detailed cross-sector plan across all government departments of what measures will be required in the near future. It must provide a sector-by-sector analysis and ensure that the Government’s economic and industrial policy, as well as its infrastructure spending decisions, are all fully aligned with this target.”

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