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Business leaders call on governments to keep 1.5C alive at COP26

29th October 2021

Ahead of the COP26 international climate summit, the Aldersgate Group and leaders from business, academia, and civil society are urging world governments to respond to the challenges set by the UK Presidency [1] and seize the opportunity the talks present to deliver a clear pathway towards keeping average temperature increases to within 1.5C.

They emphasised the significant economic opportunity presented by the transition to net zero emissions, called on all major emitters to increase their emission reduction pledges (NDCs) in line with the 1.5C target and called for progress on meeting climate finance pledges to developing countries, phasing out coal, progressing rules for international carbon trading and mobilising international finance towards low-carbon infrastructure.  

The IPCC’s recent Sixth Assessment Report [2] delivered a clear message to policymakers, declaring a code red for humanity and stressing the need for immediate action to address the climate crisis. COP26 is a crucial inflection point, and with the right commitments and negotiation progress, it provides a unique opportunity to put the world economy on a clear pathway towards net zero emissions and preventing warming of more than 1.5C.

Although welcome commitments have been made by a growing number of economies such as the United States, Japan, the European Union, and the UK ahead of the talks, further commitments and negotiation progress are needed in several areas.     

In particular, it is vital that a growing number of major emitting nations increase the ambition of their NDCs – and put in place credible delivery plans - to put the world economy on a pathway to net zero emissions and towards limiting warming to 1.5C. Urgent progress is also required on delivering the promised $100bn of climate aid promised to developing nations, agreeing a phase out date for coal, finalising a rule book to set up a credible global carbon market under Article 6 of the Paris Agreement, joining up innovation efforts to decarbonise some of the most complex parts of the economy such as heavy industries, and mobilising much larger pools of investment towards low carbon technologies.

Nick Molho, Executive Director of the Aldersgate Group said: “COP26 is a crucial opportunity to show that the international community can build on the Paris Agreement and take another step towards significantly reducing global emissions. The stakes couldn’t be higher, with the IPCC leaving us in no doubt that we have reached a code red for humanity. Businesses now want to see bold commitments and tangible steps from all major emitters to get the world on track for the 1.5C target, prevent the worst impacts from climate change and unleash the low carbon investment the world economy urgently needs to see.

The UK Presidency has demonstrated welcome leadership in the run-up to the summit, through its diplomatic efforts and the release of the UK’s Net Zero Strategy, it’s now time for all major emitters to translate this into success at the summit.”

Henrik Pedersen, CEO, ABP, said: “ABP strongly supports the UK Presidency’s ambitions for COP26. It is essential that governments recognise the critical role that ports around the world play in reducing emissions. As the UK’s leading ports group, ABP is setting the pace in decarbonising our own operations (down 35% since 2014), and we are one of UK’s largest corporate generators of solar energy with 6.5MW. As well as providing strategic locations for the decarbonisation of supply chains, we are helping deliver the UK’s wider climate objective by supporting the offshore wind and renewable energy sectors, and the decarbonisation of industry through the growth of hydrogen and carbon capture and storage technologies.”

Andy Wales, Chief Digital Impact and Sustainability Officer, BT Group, said: “What we need to see now, from both governments and businesses, are clear action plans to deliver pathways to 1.5 degrees Celsius. We urge leaders from around the world to step up in committing to net zero targets. At BT, our path is clear – we have a target to be a net zero emissions business by 2030 for our own operations and 2040 for our supply chain and customer emissions.”

Duncan Price, Global Leader for Sustainability & Climate Change, Buro Happold, said: “The publication of the UN IPCC Sixth Assessment Report, the COP26 climate summit and the associated Race to Zero campaign have shifted the political narrative, catalysing corporate commitments like never before. Now we need the world’s governments to play their part and deliver a clear pathway towards keeping the 1.5C target alive.”

Steve Murrells, CEO of Co-op Group, said: “We all have to recognise that we are in the grip of a climate crisis and need to act accordingly. Put simply, we need to reduce the amount of carbon we put into the atmosphere – and we need to do that now.

We need co-operation at the heart of our collective response if we are to successfully tackle the climate crisis at a global level. I believe it is vital that world leaders seize the moment in Glasgow, and then ensure they legislate, regulate and incentivise when they get home to ensure that all businesses step up.”

From the producers and manufacturers in our global supply chain, to every community we serve here in the UK, the impact of climate change is already being felt, and is only going to be felt more acutely in the years ahead, unless collective action is taken now.”

Iain Patton, CEO, EAUC – the alliance for sustainability leadership in education, said: “As UN Observers at COP26, representing the EAUC Community of over 7000, the EAUC delegation of staff, members, sector leaders and students is in Glasgow to ensure that education is at the heart of climate action! We have been working hard in the run-up to COP26 to ensure that UK and Irish Governments establish policies and funding that will enable universities and colleges to lead on implementable and aggressive emissions reduction policies. We are also working to address climate governance and sustainability in education that students urgently need to create a world with a safer climate.”

Sarah Mukherjee, CEO, IEMA, said: “The history of climate negotiations has been punctuated by the highs and lows of judgements passed on previous conferences. Glasgow must be different. Time is now too short and the stakes too high for COP26 to fail. Yet success is not certain; leaders must now step up if 1.5°C is to remain even an aspirational target and the necessary finances for achieving net zero are to be put place, to avoid a path leading to catastrophic global warming. But leadership must be inclusive, coming from all levels and sectors of business and industry, if Glasgow is to be remembered as the moment the world woke up.”

Peter Jelkeby, Country Retail Manager and Chief Sustainability Officer, IKEA UK & Ireland, said: “Climate change is one of the defining issues of our time and we’re determined to show that it’s good business to be a good business. At IKEA we want to show that healthy and sustainable living can be affordable, attractive and convenient for the many. Today, we are already supporting our customers to live more sustainable lifestyles, whilst helping to create the circular economy that we’ll need to transition to net-zero. We are proud to be a Partner of COP26 and will work closely and collaboratively with the UK Government and other partners to seize this opportunity for ambitious climate action and with world leaders gathered together, this is a historic opportunity to turn the tide on climate change.”

Alyssa Gilbert, Director of Policy and Translation, Grantham Institute – Climate change and the environment, Imperial College London, said: “We call for governments to commit to ambitious greenhouse gas reduction targets, adaptation plans and a strong climate finance package to drive the essential short and medium-term action needed on climate change. These international signals and roadmaps create the momentum and expectations for the future that will allow the strategies and actions that business, nations and civil society are trying to implement to thrive. Sitting in a university, we want our knowledge and innovations to be implemented and scaled up around the world, driven by these global signals.”

Sam French, Business Development Director, Johnson Matthey, said: “It is crucial that world leaders show clear ambition and adopt bold commitments on the key priority areas outlined for COP26. A positive outcome at the summit will provide businesses with further confidence to continue their investment in the innovative technologies needed to reach net zero. At Johnson Matthey we have seen first-hand the economic opportunities associated with the energy transition, through schemes like the HyNet industrial cluster in the North West of England, where industry will be powered by hydrogen.” 

Simon Virley, Vice Chair and Head of Energy & Natural Resources, KPMG UK, said: “COP26 must keep alive the Paris Agreement goal of limiting global warming to 1.5 degrees. The effects of climate change are already evident around the world, even with 1 degree warming on pre-industrial levels. At KPMG, we are doing our bit with a global commitment to reach Net Zero by 2030, and helping our clients navigate the risks and seize the opportunities created by the energy transition.”

Nigel Wilson, Group CEO, Legal & General, said: “Climate is not only the most urgent issue but also the biggest investment opportunity of our lifetimes. We can harness the power of business and markets to make sure that the transition happens. We must all now move from promises and commitments to action and delivery. Our roadmap to net zero focuses on funding the transition to support a low carbon future and deliver secure returns. We are investing in renewable energy, and we have actionable climate plans in place across our major business areas including investments, housing, and commercial property.”

Phil Bentley, Chief Executive Officer, Mitie, said: “The UK continues to lead the way globally in driving decarbonisation across both the public and private sectors. However, if we are going to meet the stretching targets needed to limit the impact of global warming, we all need to go even further, and faster, and make net zero a reality. With COP26 in a matter of days, we all need to take responsibility. Now is the time for Governments from across the world and industry to work together to take even bolder action.”

Duncan Burt, Chief Sustainability Officer, National Grid, said: “We want to hear strong alignment from the major economies including the US, China, the EU and wider G20 on the pace of change and action being taken during this decade to cut carbon emissions. That means a faster transition to electric vehicles, an end to burning coal, investing in renewable energy and financial support to help nations tackle the impacts of climate change.”

Stefano Agostini, CEO, Nestlé UK&I, said: “The window of opportunity to take action is closing. Collective global ambition and commitment are urgently needed if we are to limit climate change below 1.5 degrees of warming and avoid dangerous and irreversible tipping points. As a food and drink business operating in 187 countries globally, we need bold commitments from governments that chart a course towards achieving this so that we too can meet our goal of reaching net zero by 2050 and halving our emissions by 2030. COP26 is therefore an incredibly important moment for us and for society. Together, with clear ambition, clear action and courageous collaborations we can make this a good COP that we can look back on with pride.’

Larissa Kennedy, President, NUS, said: “Improving the ambition of Nationally Determined Contributions isn’t the real challenge at COP26. Our real challenge is getting political leaders to honestly and urgently deliver the rapid carbon reductions and climate aid they have already pledged. Young people are tired of broken promises. My generation will never forgive them if they continue to fail to deliver.”

Philippa Spence, Managing Director, Ramboll UK, said: “Now is the time global leaders have to be bold. Going into COP there is no doubt as to the weight of responsibility they are carrying. As an industry we urge them to make the hard, but necessary decisions to deliver their NDC’s in line with the 1.5C target, do the just thing for developing nations to support their transition and finalise the Paris rulebook.”

Beccy Speight, Chief Executive, RSPB, said: “We are in midst of a nature and climate emergency, our wildlife and wild spaces are under threat at a time when nature-based solutions should be part of our response to climate change.  As well as helping carbon sequestration, investing in nature can also lead to the creation of new jobs; cleaner water, air, and healthier soil; better and more resilient protection against the impacts of climate change such as flooding and drought; and benefits to our mental and physical health whilst simultaneously restoring the wildlife we love. In short, we can revive our world, we can leave a positive legacy for the next generation.

As hosts of the summit, the UK must ensure that COP26 is remembered as a moment when the world not only kept the goal of limiting temperature rises to 1.5 degrees of warming alive, but also set the agenda for how commitments will be backed with financed actions, including for nature.”

Carl Ennis, CEO, Siemens plc, said: “Climate change is a global issue that needs to be addressed locally. Many of the technological solutions to Net Zero are already available, but more needs to be done to deliver them at scale. Governments, local leaders, industry and investors must work together to unlock the finance needed to accelerate change.”

John Scanlon, Chief Executive Officer, SUEZ recycling and recovery UK, said: “The circular economy, resource efficiency and sustainable waste management are notable by their absence on the COP26 agenda but with resource use driving half of the world’s climate emissions, they represent a significant opportunity for governments to up the ambition of their emission reduction pledges and move towards one world living.”

Maria Connolly, Head of Clean Energy and Real Estate and Executive Board Member Responsible for Sustainability, TLT LLP, said: “COP26 is no time for half measures. The agreements and policies coming out of this summit need to be as bold as they are effective at keeping average temperature increases to within 1.5C. In fact, major organisations are begging governments to impose more stringent climate rules on the business sector, and businesses urgently require greater clarity and incentives to steer the corporate ship away from carbon emitting practices and more quickly in the direction of a greener future. This is the right thing to do, and it makes great economic sense. It is time for the world’s leaders and negotiators to get specific about the path to net zero, and serious about the 1.5C target.”

Simon McWhirter, Director of Communications, Policy and Places, UKGBC, said: “Limiting global temperature rise to 1.5 degrees is a non-negotiable, and although it’s sometimes seen as a hackneyed phrase, we are truly now at a critical tipping point; one when world leaders must seize the opportunity to set and protect the 1.5 degree pathway. The built environment is a major contributor to global emissions and our buildings - and the communities that live and work in and around them - will be especially vulnerable to the catastrophic consequences of climate change if we do not act decisively. We already have many of the solutions required to build better now, and our sector stands ready to play its part. We are therefore calling on world leaders to set out ambitious plans and start the action to accelerate the capacity of our industry to deliver, through ambitious green finance mechanisms, standards and global net zero commitments. Ambition is critical but plans and action are even more so.”

Mary Thorogood, Director, Head of Public Affairs Northern and Central Europe MarCom, Sustainability & Public Affairs, Vestas, said: “At COP26 next week in Glasgow, governments around the world must move from talk to action in order to achieve the goals they’ve signed up for as part of the Paris Agreement. Through the drastic scale up of renewable technologies like wind energy, let’s decarbonise all sectors of the global energy system and scale up, now!”

Rick Willmott, Group Chief Executive, Willmott Dixon, said: “The built environment sector contributes 39% of global carbon emissions. 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. Around 350,000 new roles in construction alone could be created by putting the UK on track for net zero emissions by 2050. We urge both world economies and large companies to join us in committing to a net zero transition pathway aligned to 1.5C.” 

—ENDS—

[1] Rt Hon Alok Sharma MP (October 2021) Paris Promised, Glasgow Must Deliver, 2021

[2] IPCC (2021) Sixth Assessment Report, 2021

COP26

Budget 2021: More effort needed to put net zero at heart of economic policy

27th October 2021

Reacting to the Budget and Comprehensive Spending Review announced by the Chancellor of the Exchequer today, Nick Molho, Executive Director at the Aldersgate Group said: "We recognise that this was a tricky Budget to deliver after a uniquely challenging period for the UK economy, and the desire to stimulate economic activity across the country was welcome. However, coming a week after the welcome publication of the Government’s Net Zero Strategy and its Green Finance Roadmap and a week ahead of COP26, it is disappointing that the Chancellor’s Budget contained so few references to the Treasury’s role in supporting the UK’s net zero transition and its other environmental ambitions. Economic evidence is clear that investing in low carbon infrastructure and nature restoration delivers high economic growth multipliers in terms of job creation, productivity gains and in generating the tax revenues the Chancellor needs to fund high-quality public services, as well as driving economic activity across the country. [1]

The Chancellor’s commitment to increase investment in skills and education is welcome but significant attention must now be given to putting together a comprehensive low carbon skills strategy, which will ensure that students and those already in the workplace are both equipped with the skills they need for a net zero emissions economy. This must include a comprehensive response to the key recommendations recently made by the Green Jobs Taskforce." [2]  
 
Nick Molho added: "It was positive to see the progress the UK is making in areas such as green finance, including through the UK Infrastructure Bank’s first investment this week. Going forward, the Bank’s investments should be predominantly targeted in complex areas such as building retrofits and others that require significant funding to ensure viability, like hydrogen and carbon capture.
 
It will also be important to see tangible increases in funding for local authorities to deliver decarbonisation, as they have a crucial role to play in delivering essential clean energy, transport and skills investment at a local level. Finally, the government must ensure that new fiscal measures do not undermine the UK’s progress towards net zero. In areas such as transport, the main focus must be to make low carbon forms of travel like rail and bus links as reliable and affordable as possible, rather than subsidising domestic air travel.” [3]

—ENDS—

[1] Zenghelis, D. and Rydge, J (2020) Rebuilding to last: how to design an inclusive, resilient, and sustainable growth strategy after COVID-19, commissioned by the Aldersgate Group:  https://www.aldersgategroup.org.uk/asset/1684

[2] Aldersgate Group was part of the Green Jobs Taskforce and helped shape the final recommendations of the report: https://www.gov.uk/government/groups/green-jobs-taskforce

[3] Earlier today the Aldersgate Group launched its Net Zero Strategy Policy Tracker, which you can access here: https://www.aldersgategroup.org.uk/asset/2019

CIRCLE_pexels-pixabay-415992

Aldersgate Group publishes Net Zero Strategy policy tracker

26th October 2021

Today the Aldersgate Group has published its Net Zero Strategy policy tracker, which summarises the positive announcements in the Strategy, identifies remaining policy gaps on a sector-by-sector basis, and highlights the next steps for building on this ambition and accelerating progress towards a prosperous net zero economy.

The Aldersgate Group welcomes the publication of the Net Zero Strategy, alongside the Heat and Buildings Strategy, Net Zero Review, and the Greening Finance roadmap last week, which provide a clearer framework for how the UK will meet its carbon budgets and drive job creation, innovation, and business competitiveness in the process. Setting out a clear blueprint for achieving net zero ahead of the COP26 negotiations is essential for persuading other large emitters to adopt more ambitious emissions reductions targets and showing how these can be delivered in practice.
 
However, key policy gaps remain, particularly in crucial areas such as energy efficiency, heavy industry decarbonisation, agriculture and land use, and skills. The policy briefing launched today discusses the main decisions that still need to be put in place to enable businesses across all sectors to cut emissions, boost their competitiveness and deliver productivity gains in the process.

Key recommendations include:

  • Investing in interconnection and storage to deliver greater energy security and help lower wholesale electricity prices.
  • Developing and enforcing regulatory levers to achieve higher levels of energy efficiency in buildings and lower energy bills for customers.
  • Developing a clear roadmap for decarbonising dispersed sites, working with local authorities and local enterprise partnerships to ensure these locations are over time connected to CCS infrastructure and hydrogen production sites.
  • Publishing further detail on how agriculture and land use can contribute towards achieving the UK's net zero target.

The 15 page document makes concise recommendations to build on current progress, covering all of the major areas in the strategy; including power, hydrogen, industry, heat and buildings, transport, finance, and skills. It also highlights the next steps for engaging the public in the transition, in particular in relation to the rollout of new technologies and home retrofits.   

Ana Musat, Head of Policy at the Aldersgate Group said: “The Net Zero Strategy represents an important step forward for the UK as it looks to decarbonise and seize the economic opportunities that a successful transition to net zero emissions could provide. It shows crucial leadership ahead of COP26 and sets a clear direction for climate and environmental policy in the coming years.
 
There are however areas in which the Strategy must go further to deliver emissions reductions and provide the support and market signals that businesses need to invest in low carbon solutions. In this briefing, we offer a clear roadmap for building on the Strategy in the coming years and accelerating the net zero transition, while also delivering economic benefits and engaging the public in the process.”

CIRCLE_pexels-georg-3071145

Net Zero Strategy: a major opportunity for UK plc

19th October 2021

The Aldersgate Group welcomes the publication of the Net Zero Strategy today, highlighting the significant growth and job creation opportunities that a successful transition to net zero emissions could provide to the UK economy. The Group urges Government to build on this progress and rapidly firm up the policy detail that is required for these benefits to materialise in key areas such as energy efficiency, heavy industry, and nature.

Nick Molho, Executive Director at the Aldersgate Group, said: “The evidence is clear that the transition to net zero emissions is a major opportunity to deliver economic growth and trigger job creation in multiple sectors of the economy throughout the country. [1] Whether we achieve this in practice is ultimately down to the decisions we take today, and having a clear policy plan in place is critical. Today’s Net Zero Strategy is an important step forward towards achieving this.

The Strategy sets a clear overall direction for the UK economy, recognises the critical importance of public policy signals to attract private sector investment and contains positive measures in the power, transport and heating sectors. The commitment to fully decarbonise the power grid by 2035 will provide an essential bedrock to cost-effectively cut emissions in many parts of the economy and reduce exposure to fossil fuel price fluctuations. The commitments to kickstart the electric heat pump market, introduce mandates to scale up zero emission vehicle production and increase investment in local on-street residential charging are particularly welcome.”

Nick Molho added: “There are a number of areas where further policy clarity is required to put the UK on course to meet the Sixth Carbon Budget. These include putting in place clear regulatory targets and fiscal incentives to drive investment in energy efficiency retrofits, which is essential to ensure a cost-effective roll-out of low carbon heating, lower household energy bills, and reduce demand on the UK’s power grid.   

Whilst the ambition to develop four low carbon industrial clusters by 2030 is positive, upcoming consultations will need to result in clear business models to support the scaling up of carbon capture and storage, hydrogen and electrification in industry. Greater attention should also be paid to connecting dispersed industrial sites - such as cement, glass and ceramics - with the low carbon infrastructure that will be deployed in industrial clusters. [2] Beyond the commitments on tree planting and peatland restoration, the Environment Bill should be used to set a broader and more ambitious set of nature restoration targets, underpinned by ambitious environmental improvement plans, to help the UK adapt to climate change and deliver much needed negative emissions.”  

Nick Molho concluded: “Looking ahead, it is important that the Government continues to focus on the ‘people dimension’ of the net zero transition. This should include a clear strategy to put in place quality standards and information campaigns to support citizens throughout the transition to low carbon heating. Following the recommendations of the Green Jobs Taskforce, this should also include the development of a comprehensive low carbon skills strategy that will ensure that both the current and future workforce are equipped to seize the employment opportunities created by the transition to a net zero emissions economy. [3]

- FOOTNOTES - 

[1] Aldersgate Group, Rebuilding to last: how to design an inclusive, resilient, and sustainable growth strategy after COVID-19: https://www.aldersgategroup.org.uk/asset/1684

[2] On 9 September 2021 the Aldersgate Group released a report with Frontier Economics on Accelerating the Decarbonisation of Industrial Clusters and Dispersed Sites: https://www.aldersgategroup.org.uk/asset/1976

[3] Aldersgate Group was part of the Green Jobs Taskforce and helped shape the final recommendations of the report: https://www.gov.uk/government/groups/green-jobs-taskforce

CIRCLE_pexels-dominika-gregušová-672532

Smart regulation is critical for greening finance

18th October 2021

Responding to the publication today of the government’s new strategy Greening Finance: A Roadmap to Sustainable Investing, Josie Murdoch, Senior Policy Officer at the Aldersgate Group, said: “We welcome the government’s plans for greening the financial sector and embedding climate and the environment into decision-making for financial institutions and corporates, as well as into investment products.[1] Three elements of the new Roadmap are particularly welcome. Firstly, the plan to integrate different disclosure frameworks within the Sustainability Disclosure Requirements (SDR) integrated framework, which will be based on the Taskforce for Climate-Related Financial Disclosures (TCFD) framework. This will reduce reporting burden for businesses. Secondly, the SDR requirement for firms to publish transition plans that align with the government’s net zero commitment, on a comply or explain basis. Thirdly, requiring companies to disclose which proportion of their activities are aligned with the new UK Green Taxonomy will help to prevent greenwashing.”
 
Josie Murdoch added: “Looking ahead, the government must ensure that the UK SDR and its taxonomy are aligned with other international frameworks, such as the EU’s Sustainable Finance Disclosure Regulation (SFDR). This will simplify the reporting process and ensure that businesses operating in several jurisdictions are not subject to multiple reporting requirements that may be incompatible. A timeline setting out when the different elements of this new regulation will be introduced would also help businesses prepare for these new reporting standards. Finally, a further commitment on requirements for businesses to publish net zero transition plans ahead of COP26 would be welcome. By making it mandatory for large businesses to publish plans on how they will ensure their operations and investments are aligned to the UK’s net zero target, government will send a clear signal on green finance and demonstrate leadership at the international level.”
 
-ENDS-
 
[1] In June 2021, the Aldersgate Group called for stronger financial regulation to be introduced across the economy, in order to green the UK financial system. We argued that new regulation would ensure a level playing field, increase comparability of disclosures and reporting, and ultimately ensure that finance is being allocated as strategically as possible to deliver the UK’s climate goals.

City of London

Heat and Buildings Strategy: energy efficiency in buildings is key to decarbonisation

18th October 2021

The Aldersgate Group welcomes the Government's announcements in relation to its Heat and Buildings Strategy, set to be published imminently, which will be instrumental in tackling the built environment’s share of emissions, representing 17% of the UK total. [1] To maximise economic opportunities and deliver lower bills for customers, the Group highlights the importance of additional regulatory and fiscal measures to drive energy efficiency retrofits.

Ana Musat, Head of Policy at the Aldersgate Group, said: “Decarbonising the UK’s built environment is a significant challenge, but one that comes with major opportunities – including job creation potential, reducing the UK’s reliance on fossil fuels, and delivering lower bills for customers. The strategy is set to include important measures for realising that vision, such as a commitment to accelerate the installation of heat pumps, innovation funding to bring down the cost of installation, and grants to help households meet the upfront cost. All of these measures are fundamental to deliver a fair transition to clean heat, mobilising critical private sector investment and growing supply chains."
 
Ana Musat added: “To build on these strong foundations, Government should set clear regulatory and fiscal measures to drive the uptake of energy efficiency retrofits, which will be key to lowering energy bills and tackling fuel poverty, as well as reducing demand on the grid. Energy efficiency retrofits can also create significant economic activity and job creation, being labour-intensive and rooted in local supply chains: 108,000 net new jobs could be created annually until 2030 through energy efficiency. [2] There is also potential to scale up these projects by investing in skills, for instance through the rapid implementation of the Green Jobs Taskforce’s recommendations. [3] Measures like the rollout of minimum energy efficiency standards for domestic buildings and commercial properties and a reduction of VAT for energy efficiency retrofits will be essential in creating demand and and attracting investment into insulation and deep retrofits.”
 
FOOTNOTES


[1] Climate Change Committee, Sixth Carbon Budget
[2] Cambridge Econometrics & Verco for Customer Focus (October 2012) Jobs, growth and warmer homes: evaluating the economic stimulus of investing in energy efficiency measures in fuel poor homes
[3] Aldersgate Group has been part of the Green Jobs Taskforce and helped shape the final recommendations of the report

Housing cropped

Climate adaptation must be a policy priority across government

13th October 2021

Responding to the publication of the Environment Agency's third adaptation report, Nick Molho, Executive Director at the Aldersgate Group, said: “Building on the recent climate risk assessment from the Committee on Climate Change, today’s report from the Environment Agency makes it clear that England is not yet prepared to deal with the impacts of climate change that we are already locked into. Efforts to adapt to climate change and cut emissions must now both be pursued with the same degree of ambition and should be hardwired across the policy making of all government departments from Treasury and housing through to transport, planning and industrial strategy. Given the immense task ahead, regulators such as the Environment Agency should be sufficiently well resourced and empowered to ensure they can carry out their critical environmental protection functions effectively.”
 
Nick Molho added:
 “A step change and a systemic approach is needed to better protect our homes, businesses and transport links, with responsibilities clearly divided between governments, regulators, businesses and homeowners. In the near term, the Government should recognise the role that early and ambitious action to restore England’s natural environment can play in helping us adapt cost-effectively to extreme weather events such as flooding and heat waves. It should use the return of the Environment Bill in the House of Commons next week to set an ambitious target setting process to significantly improve the state of our woodlands, peatlands, soils and other critical parts of the natural environment.”

Forest and river

Labour calls for mandatory net zero transition plans: Aldersgate Group reactive

13th October 2021

In a speech today ahead of COP26 in Glasgow, Shadow Business Secretary Ed Miliband called on the government to make it mandatory for financial institutions and FTSE100 businesses to publish plans for meeting net zero. This follows a letter signed on Monday by the Aldersgate Group and a range of large companies and financial institutions [1], calling for mandatory transition plans to be introduced for large companies from 2025, with the government opening a consultative process in 2022 to develop a roadmap towards the introduction of such a requirement.
 
Reacting to the announcement, Nick Molho, Executive Director of the Aldersgate Group, said: "We welcome today’s announcement from the Shadow Business Secretary Ed Miliband. Although 60% of the world’s largest companies now support, or report in line with, the recommendations of the Taskforce for Climate-Related Financial Disclosures, less than a third of PRA-regulated banks and building societies surveyed in 2020 had a science based target or net zero strategy in place [2]. The Aldersgate Group sees the introduction of mandatory net zero transition plans as the natural next step to climate-related financial disclosures and one which is essential to drive greater market transparency and good business and investment decisions. At a time where a growing number of companies are taking on net zero targets, the introduction of such a requirement would also promote a level playing field as the economy as a whole moves towards net zero emissions."
 
Nick Molho added: “To support the introduction of mandatory net zero transition plans, it will be essential for government policy to encourage businesses and financial institutions in the near term to produce plans on a voluntary basis and for regulators to provide them with supportive guidance. Publishing a comprehensive set of sustainable finance definitions through the upcoming UK green taxonomy will also be essential to support companies in this process and ensure that clear, transparent and comparable disclosures can be produced. It will also be important for businesses and financial institutions to continue mainstreaming sustainable finance knowledge amongst their staff, to ensure they have the expertise and skills required to produce quality plans."

- ENDS -

[1] This week the Aldersgate Group and leading companies, including various FTSE companies and financial institutions, wrote to the Chancellor and Secretary of State for the Department of Business, Energy and Industrial Strategy, calling on the UK Government to make the disclosure of net-zero transition plans mandatory for large companies. Further information can be found here.

[2] Financial Stability Board (October 2020) 2020 Status Report: Taskforce on climate-related financial disclosures; and PWC (October 2020) Rising to the challenge: climate risk in the UK banking sector

Big ben

Leading companies call on UK Government to make disclosure of net-zero transition plans mandatory

12th October 2021

Leading UK companies including various FTSE companies and financial institutions responsible for over £4.5 trillion GBP in assets have written to the Chancellor and Secretary of State for the Department of Business, Energy and Industrial Strategy calling on the UK Government to make a landmark announcement ahead of the UN Climate Change Conference (COP26) to make the disclosure of net-zero transition plans mandatory for large companies. 

Signatories include FTSE 100 companies such as BT, Kingfisher, and Tesco, and financial institutions such as Aviva, Legal & General Investment Management (LGIM), and Santander, as well as industry groups such as the Association of British Insurers (ABI) and the Aldersgate Group, and civil society organisations such as WWF.

The letter notes that transition plans are needed for companies to credibly deliver their net-zero goals. The signatories also note that financial institutions will find it challenging to deliver their net-zero goals without having transition plans for companies in their portfolios.

The UK Government has already called on companies to voluntarily set net-zero targets and disclose net-zero transition plans ahead of the crucial COP26 summit in Glasgow. Moreover, the government has adopted a roadmap to make it mandatory by 2025 for large businesses and financial institutions to disclose climate-related risks and opportunities according to the recommendations of the Taskforce on Climate Related Financial Disclosures (TCFD).  

However, although the TCFD this year has moved toward making transition plans a key part of its guidance, the UK government has yet to provide clarity on how the rollout of UK disclosure requirements will cover transition plans and other net-zero disclosures.

The letter therefore calls on the government to go a step further and make the disclosure of net-zero transition plans mandatory for large companies, with a clear timeline for rolling out this policy by 2025, and to help in developing official guidance on what a credible transition plan looks like. 

The UK has a clear opportunity to catalyse a stronger and more resilient UK economy by helping to ensure that the business and finance community is prepared to meet the goals of the Paris Agreement. According to new analysis from WWF (embargoed 07.10.21, 00:01), currently only 19% of FTSE100 have disclosed a credible action plan to reduce their climate emissions to net-zero by 2050.

By committing to make disclosure of net-zero transition plans mandatory and to develop official guidance on transition plans, the UK would be at the forefront of global leadership on climate policy and standard-setting in green finance.

Michelle Scrimgeour, Chief Executive Officer, Legal & General Investment Management and co-chair of the UK Government’s COP26 Business Leaders Group, said: 

“Climate change is one of the greatest systemic risks we face today and achieving net zero by 2050 will be crucial to help steer the world towards a more sustainable future. As founding members of the Net Zero Asset Managers initiative, LGIM is committing – in partnership and on behalf of our clients – to invest in alignment with the net zero emissions framework by 2050 or sooner. As long term investors we play a pivotal role,  not only in decarbonising investment products on behalf of our clients but also influencing the real economy transition by engaging with and holding businesses accountable on their net zero transition plans.

We need to see substantial change across economies and society globally to achieve this goal. While there is clear progress in many areas of industry,  it will not be enough and we are supportive of the Government in its aim to raise standards across the entire market.

As co-chair of the UK Government’s COP26 Business Leaders Group, I am encouraged by the progress that is being made and the collaboration to get there.  There is still much to do and we all need to play our part. Inaction is simply not an option.”

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

“It has been welcome to see climate-related financial disclosures become mandatory for large businesses in the past year, with the UK being the first major economy to introduce such regulation. However, although 60% of the world’s largest companies now support, or report in line with, the recommendations of the Taskforce for Climate-Related Financial Disclosures, less than a third of PRA-regulated banks and building societies surveyed in 2020 had a science based target or net zero strategy.

We therefore see mandatory net zero transition plans as the natural next step to climate-related financial disclosures and one which is essential to drive good business and investment decisions and promote a level playing field. The plans will ensure that all corporates and financial institutions have a strategy in place to decarbonise their supply chains and assets and address climate risks. Introducing such a requirement will ensure businesses operating in the UK are equipped to support the delivery of the country’s net zero target and the goals of the Paris Agreement and will put the UK economy at the forefront of the global shift towards net zero emissions.” 

Phil Bentley, Chief Executive, Mitie, said:

“Sustainability targets are meaningless without an action plan to make them a reality. At Mitie, we are proud to be actioning our plans and we are well on our way to meeting our target of net zero carbon emissions for our operations by 2025, whilst also helping our customers get their roadmaps in place too. By mandating that businesses disclose their own net zero transition plans, Government can play a key role in helping the nation go further, and faster, towards the decarbonisation of Britain.”

Ingrid Holmes, Executive Director, Green Finance Institute, said:

“After net zero commitments are made for 2050, the clear next step is to develop robust transition plans. To date the transition plans companies have published have been of variable quality and transparency, better guidance is clearly needed – including the role and value of including information about alignment to the forthcoming UK taxonomy.

Nick Mabey, Chief Executive of E3G said:

“This remarkable letter shows there is strong & broad business support not only for disclosing risks but also for showing how companies will actually deliver on their promises. Ahead of COP26 the UK can set a global example in flushing out greenwash by supporting firms who show true climate leadership.”

Tanya Steele, WWF’s chief executive said:

“These leading businesses are playing their part in achieving the UK’s climate goals.  But recent WWF research shows that only 19% of top UK companies have published a detailed action plan to reduce their climate emissions to Net Zero. With some of the largest UK companies calling for mandatory regulation to create a level playing field, it is time for the Government to announce legislation to ensure all large businesses publish transition plans for how they will cut their climate emissions.”

Mark Versey, CEO, Aviva Investors, said:

“As a business aiming to achieve net-zero carbon emissions by 2040, Aviva supports mandatory transition plans. These are vital if companies’ net zero commitments are to translate into the reduction in global emissions required to meet the Paris Agreement. Ahead of COP26, the UK should demonstrate its international leadership on climate change by stating its intention to make transition plans a mandatory requirement.”  

Sarah Mukherjee MBE, CEO at IEMA

"Translating corporate net-zero ambition into action requires credible transition plans which focus on delivery. Mandating this for large companies is a critical step towards a net-zero future."

Carlota Garcia-Manas, Head of Engagement at Royal London Asset Management said:

“In order to enable the necessary actions to support the Paris Agreement, climate disclosure needs to evolve from backward looking reporting to credible net-zero transition plans.”

Ben Wilson, Director of Corporate Affairs and Climate Change at Association of British Insurers, said:

“Transition plans will play a crucial role in meeting our net zero ambitions and forms a key part of the ABI’s own climate change roadmap. A consistent system for disclosing these plans will complement the Government’s existing commitment to mandatory financial disclosure, and allow different industries to identify where collaborative, cross-sector action can have the most impact.”

City of London

Cement industry commitment shows growing business momentum to deliver on the 1.5C target in the Paris Agreement

11th October 2021

Responding to the Global Cement and Concrete Association's commitment to to cut their greenhouse gas emissions by up to a quarter this decade and reach net zero by 2050, Nick Molho, Executive Director of the Aldersgate Group said: “The global cement industry is responsible for around 8% of global CO2 emissions, so today’s net zero announcement from many of the world’s largest cement manufacturers – including Chinese companies - is significant. Coming from an industry that is energy intensive and complex to decarbonise, today’s commitment shows that there is growing momentum across the global business community to deliver on the 1.5°C target in the Paris Agreement.

"To put UK industries at the forefront of this global transition, the Government’s net zero strategy must grow the market for green cement through the introduction of product standards and public procurement criteria that mandate greater resource efficiency and lower embodied emissions. As cement plants often operate away from large industrial clusters, Government policy should also support cement plants to connect to the carbon capture and hydrogen infrastructure that will be developed in these clusters.”  

Cement