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Reaction to the termination of the Green Homes Grant

28th March 2021

Reacting to the end of the Green Homes Grant, Nick Molho, Executive Director of the Aldersgate Group, said: "The premature end of the Green Homes Grant is a significant disappointment. Improving energy efficiency and slashing heating emissions from the UK’s homes is a vital, foundational step on the journey to achieve net zero emissions. It is also one of the most promising avenues to create jobs in the near-term as the UK economy recovers from the impact of the pandemic. There are many reasons for the difficulties encountered by the Grant, a key one being the lack of an adequately skilled supply chain, itself caused by the absence of a long-term policy on energy efficiency and low carbon heat for many years now."

Nick Molho added: "Beyond the funding provided to local authorities for low income households, the Government must rapidly provide a new, long-term solution for ‘able to pay’ homes. This must include urgent investment to develop energy efficiency and low carbon heat installation skills across the supply chain, binding regulatory standards to require all UK homes to operate at low levels of carbon emissions by 2035, and targeted fiscal or funding incentives to make it attractive for home owners to green their houses. An ambitious Future Homes Standard policy will also be essential to ensure all new homes are ultra-low carbon from the outset. Without a detailed and long-term policy to drive low carbon investment in homes and buildings, the UK will simply not be able to put itself on a pathway to net zero emissions."

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Net zero strategy and low carbon skills crucial for oil and gas decarbonisation

24th March 2021

Reacting to the North Sea Deal, Nick Molho, Executive Director of the Aldersgate Group said: “This North Sea Deal recognises the importance of helping all key economic sectors and their workforce transition towards net zero emissions and is therefore an important step forward. With the right policy framework and low carbon skills strategy, the move to net zero emissions can create significant employment opportunities for the UK’s oil and gas workforce, whose skills will much needed in contributing to the huge infrastructure deployment challenge facing the UK in areas such as marine renewable energy, carbon capture and hydrogen. Putting in place a detailed net zero strategy in the near future will be key to ensuring that the transition to net zero emissions can occur in a timely fashion and in a way that delivers economic and social benefits to the UK.”
 
Nick Molho added: “Tackling the net zero emissions challenge in a way that is credible and effective requires the UK’s domestic and global climate policy to be consistent. We strongly welcome the UK’s commitment to stop funding fossil-fuel projects overseas and would call on any exceptions to be strictly limited, based on transparent and very tightly defined criteria.”

Oil & Gas

Aligning CAP with the Paris Agreement

22nd March 2021

In a paper published today, the Aldersgate Group joins an alliance of investors to call on the European Union to align reforms to the Common Agricultural Policy (CAP) with European Climate Law and the Paris Agreement.

Representing €2 trillion of assets, the alliance highlights four recommendations to promote enhanced carbon mitigation and negative emissions. It will also enhance resilience for climate adaption, biodiversity and global food security. These recommendations are:

  1. Encourage use of enforceable performance-based targets which link support to member states and farmers, commensurate with the cost of delivering public good or environmental services;
  2. Shift away from incentives that prioritise yields at the expense of the climate and environment, and balance this with new monetary incentives that put a value on sustainable agriculture;
  3. Decouple support from production metrics for single commodity transfers with high associated greenhouse gas emissions (e.g. beef and dairy);
  4. Apply the Just Transition Mechanism to support farmers’ social and economic well-being, where impacted by CAP reforms.

If implemented, these recommendations would unlock the potential for private finance to have a transformative impact on the sector by supporting the decarbonisation agricultural and land-use practices. The recommendations are derived from the paper, which was authored by Legal & General Investment Management and experts at Chatham House.

In publishing the paper, Nick Molho, Executive Director at the Aldersgate Group, said:
“The Common Agricultural Policy could be used as a powerful tool to drive a thriving European agricultural sector, whilst also delivering significant environmental improvements. Business and investors are today coming together to call for an ambitious programme that will not only support sustainable food production but also promote public goods such as nature restoration, biodiversity net gain and a reduction in greenhouse gas emissions. The EU’s commitment to climate neutrality by 2050, its ambitious commitments on biodiversity restoration by 2030 and the overall ambition of the European Green Deal all provide a unique – and long awaited - opportunity to align agricultural and land use policy with the EU’s climate and environmental goals.”

Alexander Burr, ESG Policy Lead at Legal & General Investment Management, said: "We are all becoming increasingly alert to the size and scale of risk that climate change poses to sustainable economic growth. As long-term investors, and stewards of our clients’ assets, we engage with businesses across the food and agriculture sector to help them transition towards a net-zero economy. However, to truly effect change we seek stronger action from policymakers. Working with this alliance, we at LGIM, view the reform of the EU CAP as an opportunity for the EC to once again be bold and ambitious; and, we should demonstrate to the world how agricultural subsidies can support – and not undermine - the transition."

Tim Benton, Director of Energy, Environment and Resources Programme at Chatham House: "The EU is taking steps to align the land-use sector with the Paris Agreement through the Green Deal and the updated Bioeconomy Strategy. By encouraging climate to be at the heart of its subsidy packages, alongside food security, farmer wellbeing and dietary health, the Common Agricultural Policy could work in tandem with these other strategies if ambitiously applied. The EU can support a land-based economy that works for people and planet and create a system that prioritizes not just output but food quality."

Helena Wright, Policy Director at FAIRR said: "Governments have committed under Article 2.1c of the Paris Agreement to make finance flows consistent with a pathway towards low greenhouse gas emissions, and there is no way to achieve that without transformation of the animal agriculture sector. Current EU agricultural subsidies are not aligned with climate or biodiversity objectives. Investors recognize that CAP reform is critical for the agriculture and food sector itself which faces hugely increased costs of water, feed, and infrastructure damage due to more extreme weather events."

Faith Ward, Chief Responsible Investment Officer at Brunel Pension Partnership, said: "For the EU to meet its own climate targets and move in line with the Paris Agreement targets, it urgently needs to reform the Common Agricultural Policy, agreeing stronger enforcement measures, removing misaligned incentives and ending support for high-emission commodities. I support the recommendations of this letter to bring meaningful reform to the CAP based on our shared climate goals"

Peter van der Werf, Senior Engagement Specialist at Robeco, said: "Robeco has been engaging with large-scale agricultural producers for many years in our program to improve sustainability in the meat and fish supply chain. We can’t solve these issues alone, and some of the main barriers for further improvements in sustainability have to be resolved by policy makers. We have started engaging with the Brazilian government to ensure environmental protection is enforced. At the same time it’s equally important is to achieve subsidy reform of the Common Agricultural Policy (CAP) in Europe to ensure that any subsidies provide the right incentives for farmers to align with the Paris Agreement. Ultimately the CAP should achieve a circular business model for farmers that provides a sound economic basis for their farming operation."

Nina Roth, Director for Responsible Investment at BMO Global Asset Management, said: "BMO Global Asset Management is engaging companies along the food and agriculture value chain, including its financiers, on improving sustainable practices to combat climate change and biodiversity loss. Strong incentives in the CAP are vital for transforming the industry."

Ben McCarron, Managing Director at Asia Research & Engagement, said: "We support these recommendations as a stronger approach to environmental management in the agricultural sector is needed to meet global targets for climate and create a stronger food industry. There needs to be stronger incentives to improve the way land is treated, not to degrade it."


Resource efficiency crucial for meeting net zero, driving resilience and creating jobs

18th March 2021

Reacting to the publication today of the government’s Consultation on the Waste Prevention Programme for England, Kate Young, Senior Public Affairs Officer at the Aldersgate Group said: “The resource efficiency proposals announced today put significant weight behind the Government’s intention to move towards a circular economy. There is a much-needed focus on transforming production and consumption through re-use, repair and re-manufacture, and it will be pivotal to integrate these ambitions across the economy.

Kate Young added: The development of sector-specific measures also represents substantial progress, and will be vital to providing a clear framework for meeting our net zero emissions target, supporting business resilience, and creating jobs. Proposals to set product requirements for durability, repairability and recyclability, introduce extended producer responsibility for new sectors to stimulate reuse and prevention, use public procurement for remanufactured ICT devices, and introduce eco-design principles for the automotive sector are all highly encouraging and could have a sizeable impact on reducing the consumption of raw materials.”

Kate Young concluded: “Given the breadth of measures announced today are subject to consultation, the government must now ensure rapid progress over the next year to embed these ambitious proposals across the economy, particularly given the lack of policy progress in the area over the previous three years. In implementing these commitments, Government should aim high - voluntary reporting and schemes should be scaled up and translated into mandatory actions where possible to provide certainty to businesses and achieve truly transformative change. This will be essential to improve economic resilience during recovery from COVID-19, strengthen global competitiveness and meet our net zero and Environment Bill targets. [1]

—ENDS—

[1] The Aldersgate Group is currently producing a policy briefing to be published in the Spring, setting out how the UK Government can strengthen and accelerate its efforts to drive greater resource efficiency across the economy, which will include a comprehensive response to proposals in the Revised Waste Prevention Programme.

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Welcome ambition to cut industrial emissions must come with clear market mechanisms

17th March 2021

Reacting to the publication of the Industrial Decarbonisation Strategy, Nick Molho, Executive Director of the Aldersgate Group said: “We welcome the ambition to cut heavy industrial emissions by at least two-thirds by 2035. With continued ambitious support on innovation and the development of stable market mechanisms, the decarbonisation of heavy industry can provide UK businesses with competitive advantages in the production of low carbon industrial goods and deliver significant benefits in terms of job creation, skills development and the revival of industrial heartlands in many parts of the UK.   
 
The funding under the Industrial Decarbonisation Challenge Fund will make a welcome contribution to the potential development of key technologies like CCUS and hydrogen production, but it is important that such funding continues to be made available in the years to come to help accelerate the demonstration of these technologies at scale.”

Nick Molho added: “Building on efforts to accelerate innovation, it will be essential for the UK Government to put in place a comprehensive set of long-term policies that drives timely and cost-effective private investment in industrial decarbonisation and strengthens the competitiveness of UK businesses in the process. [1] This requires ensuring that the price of carbon under the UK Emissions Trading Scheme is clearly aligned with the net zero target, with the use of free allowances gradually reducing and the UK considering a linkage between the UK and EU ETS on the basis of a shared ambition for climate neutrality.
 
Product standards that drive improvements in resource efficiency and embodied carbon in the production process could be very effective at stimulating private investment and providing a level playing field, with well-designed carbon border adjustment measures also needing to be considered. The development of these policy measures also provides the opportunity to develop collaborative approaches on industrial decarbonisation with other large emitting economies at COP26 and beyond.”
 
Nick Molho concluded: “It is important that the UK’s ongoing approach on industrial decarbonisation does not just focus on industrial clusters. [2] British industries like cement, glass or ceramics are located outside of clusters and face additional challenges to deploying technologies like CCS, particularly due to the uncertain availability of transport and storage infrastructure and limits to economies of scale. Additional and more tailored policy incentives will be required for these dispersed industries, including support for electrification, developing new carbon capture and usage business models and fiscal incentives to drive greater resource efficiency.”

—ENDS—

[1] Aldersgate Group (October 2020) Building a net zero emissions economy: next steps for government and business
 
[2] Aldersgate Group has commissioned Frontier Economics to develop analysis on the policy framework required for decarbonising both industrial clusters and dispersed sites. The final report will include detailed case studies on how those policies will impact businesses in sectors such as steel, cement, chemicals and glass.

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Ambitious principles key to putting environment at the heart of policy making

10th March 2021

Reacting to the publication of the draft environmental principles policy statement, Signe Norberg, Head of Public Affairs and Communications at the Aldersgate Group, said: "This publication marks a crucial step forward in progressing the Environment Bill ahead of Royal Assent and, ultimately, placing environment at the heart of UK policy making. However, to achieve this goal the policy statement must be highly ambitious so that it can generate the desired economic, social and environmental benefits. The environmental principles are a crucial element of this. Having clear and ambitious principles integrated into Government policy provides a clear direction of travel, and creates market signals which will allow businesses to innovate, invest in new low carbon goods and services, grow supply chains and create jobs. [1] We look forward to working with Government on the policy statement during the consultation process."

- ENDS -

[1] On 2 March 2021, the Aldersgate Group published its latest report, Fostering Prosperity: Driving innovation and creating market opportunities through environmental regulations, written by global design engineering consultancy Buro Happold. The report finds that ambitious and well-designed environmental regulations have a track record of delivering significant economic and environmental benefits. You can access the report here

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Investment-led recovery must be supported by a comprehensive net zero vision

3rd March 2021

Reacting to the Chancellor of the Exchequer's Spring Budget today, Nick Molho, Executive Director of the Aldersgate Group, said: "It is welcome to see the Budget acknowledge the importance of an investment-led recovery, which will be essential to supporting the UK’s economic growth and the development and deployment of low carbon technologies and services [1]. Whilst today’s announcements set a useful framework towards economic recovery, there are a number of significant missed opportunities within key areas such as housing and transport that must be picked up in the Government’s upcoming net zero strategy, which needs to provide a cross-economy roadmap to reach our net zero target by 2050. [2]” 

Nick Molho added: "The establishment of the first UK Infrastructure Bank in Leeds is a crucial step in this journey, with an initial capitalisation of £12bn and £10 billion of guarantees. We would urge Government to include environmental objectives in the Bank’s remit in order to increase the UK’s resilience in the long-term. [3] Further information on the UK’s first sovereign green bond is also welcomed, but it will be essential that the funding is aligned with our net zero objectives in order to support a sustainable economic recovery. The recognition of net zero and sustainability in the updated remit of the Monetary Policy Committee of the Bank of England is also a helpful signal to support the transition to a low emissions economy.”

Nick Molho added: “However, the Budget falls short of providing certainty for the housing sector by not explicitly setting out further funding for the Green Homes Grant. This is a concerning omission and one that must be rectified at the earliest opportunity with additional policy measures that address supply chain and skills issues. This clarity and support will be vital in decarbonising the housing sector, alongside regulatory standards and fiscal incentives to support investment in energy efficiency and low carbon heat.”

 
- ENDS -

[1] CCC (2017) UK business opportunities of moving to a low carbon economy
[2] Aldersgate Group (2020) Building a net zero emissions economy https://www.aldersgategroup.org.uk/asset/1697
[3] Zenghelis, D. and Rydge, J. (2020) Rebuilding to Last: designing an inclusive and resilient growth strategy after COVID-19, Commissioned by Aldersgate Group https://www.aldersgategroup.org.uk/asset/1684

 

 

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Ambitious environmental regulations are key to the UK’s economic recovery

2nd March 2021

Today, the Aldersgate Group releases a new report, Fostering Prosperity [1], which shows that ambitious and well-designed environmental regulations have a track record of delivering significant economic and environmental benefits. The report, written by global design engineering consultancy Buro Happold, highlights that the business community sees ambitious environmental regulation as a key driver to aid the UK’s economic recovery and achieve its net zero emissions target and other environmental ambitions. The Aldersgate Group calls on Government to recognise the value and importance of ambitious environmental regulations as part of its ongoing regulatory review [2].

The report is based on a review of specific environmental regulations in the construction, waste and automotive sectors and interviews with 20 business leaders and practitioners. It finds that the regulations studied in these sectors have delivered growing business investment in innovation, new products and services, job creation and skills.

For example, the London Plan, which establishes requirements for improving the sustainability of housing developments in London, has supported over £100 million worth of investment in heat networks, solar PV installation and carbon offsets in 2018 alone [4]. The Landfill Tax has been a net positive job creator for the waste sector and transitioning towards a more resource efficient economy could generate the creation of a further 500,000 jobs [5]. In the automotive sector, the transition to electric vehicles could generate around £3 billion of private investment and 30,000 new jobs by 2030 [6].  

Interviews carried out as part of the report show strong business support for ambitious, forward looking, well joined-up and properly enforced environmental regulations, policies and market mechanisms. These are seen as essential to drive business investment in low carbon goods and services, which will support the UK’s economic recovery and put the UK on track to meet its net zero emissions target and the ambitions set out in the Environment Bill and Resources and Waste Strategy.

Key recommendations include:

  • The UK government’s ongoing regulatory review must recognise the important economic benefits of well-designed and ambitious environmental regulations and the central role they will need to play to put the UK on track for its climate and environmental targets.  
  • To support business investment, good environmental regulation should be forward-looking, with clear and ambitious targets that tighten over time.
  • Environmental regulations and standards must not sit in a silo. To be economically and environmentally effective, environmental regulations should be carefully joined up across sectors and with the UK’s overall industrial strategy. They should promote high degrees of resource efficiency and be accompanied by investment in supporting infrastructure (such as charging infrastructure for electric vehicles), research and development, skills and market access.
  • Environmental and low carbon policy should shift away from a culture of compliance and towards one of high environmental performance, promoting investment, upskilling and the sharing of resources.
  • Environmental regulations are only effective in shifting corporate behaviour and driving business investment if they are robustly and fairly enforced. Going forward, the role of regulators and local authorities should be enhanced, not diluted, with funding put in place to allow them to robustly enforce standards despite pressure on public finances.

Nick Molho, Executive Director, Aldersgate Group, said: “We urge the Government’s Taskforce on Regulatory Reform to look at environmental regulations not as red tape, but instead as drivers of innovation, job creation and skills. If the UK is to have a durable economic recovery and put itself on a credible pathway to build a thriving net zero emissions economy, then the Government must put ambitious and well-designed environmental regulations at the heart of economic policy making.”

Joan Walley, Chair, the Aldersgate Group, said: "The government's binding commitments to zero carbon and to nature protection need a detailed delivery plan. Evidence-based environmental regulations are integral to this and sustainable prosperity. Aldersgate Group's members have first-hand experience of best practice on this and are leading the call for ambitious environmental standards."

Emma Howard Boyd, Chair of the Environment Agency, said: “The UK Government hosts the G7 and the COP26 climate conference this year where discussions will focus on the economic recovery opportunities in decarbonisation and restoring nature. We have everything to gain from this in terms of jobs, trade, green goods, services and technologies. But, if polluters don’t pay and enforcement activity is underfunded, then bad practitioners will undermine the leadership and ambition of many British businesses. The Green Industrial Revolution needs strong Green Industrial Regulation.”

Maria Smith, Director of Sustainability & Physics, Buro Happold, said: “As a society, we're facing huge interconnected economic and environmental challenges that have been exacerbated and laid bare by the Covid-19 pandemic. This report shows how ambitious environmental regulation can help the Government facilitate prosperity and create the infrastructure for a thriving business landscape that meets the UK's environmental targets.”

Gabrielle Ginér, Head of Environmental Sustainability, BT Group said: “With the second largest commercial fleet in the UK, we’ve outlined plans to electrify up to 28,000 of our vehicles by 2030 and we’ve successfully campaigned for an end to petrol and diesel vehicles sales by the end of the decade. We now need the UK Government to make sure that the right policies and regulation are in place to support the mass adoption of electric vehicles - focussing on supply, price and availability of infrastructure such as charging points across the country.”

Martin Casey, Director Public Affairs Europe, CEMEX, said: “CEMEX very much welcomes this important report from Buro Happold for the Aldersgate Group; having well designed, clear and properly enforced environmental regulations is a pre-requisite to our business being able to operate efficiently. They enable us to make the right investments and decisions, and give confidence to our employees, neighbours, shareholders, and investors alike.”

Tim Jackson, Professor of Sustainable Development and Director of the Centre for the Understanding of Sustainable Prosperity, said: “This timely report finally busts the age old myth that regulation holds back prosperity. Ambitious, forward-looking, consistent regulation has the potential to deliver a resilient green recovery: healthier lives, better jobs and a more sustainable economy.”

Chris Smith, Managing Director, Michelin Tyre PLC, said: “Michelin believes strongly that sustainability is the key success factor of any company. This means reuniting profit, care for people and protection of the planet. Our commitment to sustainability can only fuel our belief that the recovery from the current crisis can only be green. With talk of building back better and building back greener, now is time for government to be bold and use environmental regulation to ensure that we are on track to meet the decarbonisation targets set out in the Paris Accord and help achieve the benefits of the circular economy through enhanced resource efficiency.”

Olivia Whitlam, Head of Sustainability, Siemens plc, said: “Long term direction setting supported by appropriate incentives is critical to creating the certainty that business needs to help deliver on the UK’s Net Zero target. As this report shows, smart and well targeted regulations have the potential to drive innovation in the Infrastructure and Transport sectors, leading to job creation and helping to facilitate a fair transition to the sustainable and resilient economy we all want to see.”

Dr Adam Read, External Affairs Director, SUEZ, said: “Regulation has been key to driving innovation and investment in the waste sector for many years. With significant reform to waste and resources policy underway, our sector is expected to play a central role in delivering both a green recovery and a transition to a more circular economy. Appropriate and consistent regulation will ensure emerging policies fulfil their potential. A more integrated approach to policy setting and regulation will promote the investment and innovation needed to deliver the economic and environmental benefits of a resource efficient economy and drive decarbonisation in other sectors.”

Julia Barrett, Chief Sustainability Officer, Willmott Dixon, said: “We warmly welcome this briefing from the Aldersgate Group. With construction and operation of buildings accounting for nearly 40% of global carbon emissions, Willmott Dixon has long advocated that well-designed and effectively enforced environmental regulations are a driver for enhanced business performance and growth. With the drive to net-zero this is truer now than it has ever been, providing the imperative to innovate and improve, to unlock opportunities for ourselves, our customers, our supply chain partners and the communities we work in.”

—ENDS—

Notes to Editor

The Aldersgate Group is an alliance of leaders from business, politics and civil society that drives action for a sustainable economy. Our members include some of the largest businesses in the UK with a collective global turnover of over £550bn, leading NGOs, professional institutes, public sector bodies, trade associations and politicians from across the political spectrum. Our mission is to trigger the change in policy required to address environmental challenges effectively and secure economic benefits for the UK in doing so.

Buro Happold is an international, integrated consultancy of engineers, consultants and advisers. Operating in 26 locations worldwide, with 54 partners and over 1,900 employees; for over 40 years we have built a world-class reputation for delivering creative, value led solutions for an ever challenging world. 

[1] Fostering Prosperity: driving innovation and creating market opportunities through environmental regulations is written by BuroHappold and commissioned by the Aldersgate Group. The full report can be found here.

[2] Department for Business, Energy and Industrial Strategy (2 February 2021) Taskforce on Innovation, Growth and Regulatory Reform (TIGRR) Terms of Reference

[3] The key findings of the report will be presented at a webinar on Tuesday 2 March at 9.30am, which will include a range of business speakers and a keynote speech from Emma Howard-Boyd, Chair of the Environment Agency. To attend the event, please register here.

[4] Greater London Authority (2018) Monitoring the implementation of the London Plan Energy Policies in 2018

[5] BuroHappold (2017) Help or Hinderance? Environmental Regulations and Competitiveness

WRAP (2020) How Moving to A Circular Economy can help the UK to Build Back Better

[6] Cambridge Economics (2020) The impact of a 2030 ICE phaseout in the UK, commissioned by Greenpeace