The UK Government is banking on technology and finance to reach its net-zero goals
For the next four years of the climate emergency, the UK will have a conservative Government. A party that believes in mobilising private capital and the power of the free market. This means the Government is putting the future of the climate, largely, in the hands of corporations and investors. If the Government’s goal to reduce emissions by 68% by 2030 is going to be successful, it will require genuine commitment from the corporate sector.
Finance and technology companies will be at the forefront of the fight.
In November 2020, the Chancellor reiterated the UK’s desire to “extend its global leadership in green finance and financial technology” – a sensible choice for a country with a reputation as a world leading financial sector. Last week, the Government launched the UK Centre for Greening Finance and Investment, a £10m investment into research hubs in Leeds and London.
These nascent policies signal that the UK is at the very beginning of its green finance journey. The current priority is on measurement, reporting, and developing the new infrastructure for the climate market (what will carbon pricing and corporate global offsetting look like in a net-zero world?). By 2025, the Government intends to introduce mandatory reporting of climate-related financial information across the economy.
This poses several opportunities for companies
Companies can work with the Government to create and lead the way in a net-zero financial system. But if organisations are behind when it is put in place, it will bring unforeseen levels of scrutiny. Investors, journalists, and politicians will have the data to hold organisations accountable. It will be easier than ever to compare performance on net-zero commitments and contributions to greenhouse gas emissions.
The Government also recognises that the level of decarbonisation needed across the economy will only be achieved through technology. The Exponential Climate Action Roadmap estimates that digital technologies could help reduce global carbon emissions by up to 15% – or one-third of the 50% reduction required by 2030. This means net-zero solutions in energy, services, manufacturing, agriculture, buildings, services, transportation, and traffic management will need to become commonplace.
The Government is relying heavily on a combination of private and public investment into these net-zero technologies. The recent 10-point plan outlines a limited, but series, of steps to encourage this. But companies will need to do more than invest in the technology if the transition is to be successful, they need to embrace it across their own supply chains. They also need to seriously review their current business strategies, questioning their relevance in a net-zero world.
Leading companies are already doing this
Apple is pushing manufactures to use renewable energy and beginning work on their own electric car. An optimist might argue they are finally taking responsibility for the vast amount of data and energy it uses – let alone the raw material extraction required to make a new iPhone every year. A cynic would argue they are simply seeking profits and getting ahead of a crackdown on tech C02 in the near future.
Pressure on companies to act to help the Government achieve their emissions target will only increase as the deadline of 2030 approaches. Further legislation will be needed. Companies, large and small, need to get ahead. They need to do more than ‘commit to net-zero’ and prepare for upcoming legislation. They need to actively review their business strategies and shift their communications with their consumers, investors, and stakeholders accordingly.
COP26 as a global platform
The 26th UN Climate Change Conference of the Parties (COP26), hosted by the UK later this year, offers a unique opportunity for brands who are leading the way to showcase their green credentials on the global stage. At Lansons we are supporting those who want to take part, while helping our clients ensure they remain relevant in tomorrow’s world. By embracing the unavoidable transition to a sustainable future today, businesses can be a leading light on ESG, showing others that the green revolution isn’t something to fear.