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UK must accelerate transition to zero emission vehicles

11th September 2018

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

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

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

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

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

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

[1] The briefing can be found here.
[2] Committee on Climate Change Progress report to Parliament 2018:
[3] Road to Zero (2018):
[4] Green Alliance: How the UK can lead the electric vehicle revolution (2018)
[5] Bloomberg New Economic Forecast: Electric Vehicle Outlook 2018        

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

24th July 2018

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

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

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

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


UK must up the pace on its clean vehicles ambition

9th July 2018

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

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

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

[1] Transport accounted for 28% of UK greenhouse gas (GHG) emissions in 2017. Committee on Climate Change Progress report to Parliament 2018:

[2] The global clean vehicles market is estimated to be worth up to £7.6tn by 2050 by government. The UK automotive sector employs over 160,000 people and generates £40bn in exports, accounting for 7.3% of the UK’s total exports of goods and services. UK Automotive Council 2017:

[3] Transport emissions must reduce by 46% between 2017 and 2030 for the UK to remain on a cost-effective pathway to meet its climate targets. Committee on Climate Change Progress report to Parliament 2018:


Time for UK clean growth plans to turn into concrete policies

28th June 2018

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

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

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

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

Committee on Climate Change

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

19th June 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[1] More details can be found here.

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

Realign investment decisions to avoid long-term risks

4th June 2018

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

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

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

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

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

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


No investment pipeline without policy detail

16th May 2018

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

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

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

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


Ambitious and well-enforced environmental regulations are good for business

10th May 2018

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

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


Green Finance Taskforce sets clear to-do list for government

28th March 2018

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

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

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

GFT report cover

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

12th March 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1st March 2018

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

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

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

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

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

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

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

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

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

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

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

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

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


Removing barriers to mature renewables key to lowering industrial electricity prices

5th February 2018

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

25 Year Environment Plan: good policy direction but clearer measures needed to drive business investment in natural capital

11th January 2018

Reacting to the publication of the 25 Year Environment Plan, Nick Molho, Executive Director of the Aldersgate Group said: “Today, the government rightly highlighted the economic, social and health benefits of investing in the natural environment. By setting out long-term goals to improve our environment and committing to introducing reliable metrics to monitor progress, this plan provides much needed clarity on the direction of the UK’s environmental policy as it leaves the EU. Businesses will be at the heart of delivering the UK’s environmental goals and the Plan’s focus on significantly improving the resource efficiency of the economy and setting up a green business council is strongly welcomed.”
However, for the plan to be successful in the long term, it will need to coherently address the multiple barriers that are slowing down business investment in the natural environment. Some of those can be addressed by the ongoing reform of agricultural payments but others will require targeted government interventions in the form of outcomes focused regulations and incentives, support for natural capital innovation such as through the natural environment impact fund suggested in the Plan, improving business access to technical expertise and growing the UK’s green capital markets.”    
Nick Molho added: “By publishing clear goals to improve the state of the natural environment, the government is showing important leadership. This will need to be supported by government itself leading by example, by fulfilling its commitment to deliver net environmental gain in major national infrastructure projects such as HS2 and developing a public procurement policy that favours businesses with a focus on resource efficiency and natural capital enhancements.”

[1] In November 2017, the Aldersgate Group published two briefings Key asks for the 25 Year Environment Plan, which sets out business priorities for the plan, and Increasing investment in natural capital, which recommends actions by businesses and government to overcome the barriers currently restricting flows of finance towards natural capital projects.


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

14th December 2017

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7th December 2017

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

The report, which is based on interviews in the waste, construction and car industries, concludes that well-designed environmental regulations can deliver positive economic outcomes in the form of increased business investment in innovation and skills, better quality products and infrastructure, greater business competitiveness and job creation. 

This report will be launched at an event in Parliament today, 7th December with keynote speaker Claire Perry MP, Minister of Climate Change and Industry [1].
The report, commissioned by the Aldersgate Group and written by BuroHappold, is based on business interviews studying the impacts of three key environmental regulations in the buildings (London Plan), waste (Landfill Tax) and car (EU Regulations on passenger cars) industries. It concludes that the compliance cost attached to each regulation has been more than offset by the economic benefits they have triggered. These include increased business investment in innovation and skills, better quality and performing products and infrastructure, greater business competitiveness and net job creation.

Examples include:

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

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

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

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

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

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

Clean Growth now part of UK’s mainstream economic strategy

27th November 2017

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

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

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


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

22nd November 2017

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


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

6th November 2017

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


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

25th October 2017

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

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

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

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


Clean Growth Strategy sets UK economy on competitive path

12th October 2017

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