This week I'm talking about transitions with a webinar from Business Green and a warning from energy company, Ithaca. There's a report and a letter to the prime minister from the Climate Change Committee, and what did happen at that Paris Finance Summit? More worrying news about climate tipping points and a new film to cheer you up. Or not.
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The Net Zero Transition
Yes, this week Business Green hosted a webinar entitled The Net Zero Transition - from targets to action. It was sponsored by property consultancy Verco. The panel consisted of Ben Ross and Tilly Shaw from Verco and Katerina Papavasileiou from Federated Hermes. It was chaired by James Murray, editor-in-chief of Business Green and you’ll remember that I had a interesting conversation with him here on the Sustainable Futures Report only a few weeks ago.
My first reaction was that this would be a specialised event for the property industry, but in fact a lot of valuable points came out which are relevant to almost any organisation.
This is what I heard.
While carbon literacy has much improved in recent years, we were told that there is still a gap if we are to meet targets by 2030. We still need culture change. We need also to develop our business models, to bring our stakeholders with us, and to be aware of changing governance requirements.
2035 not 2050
2035 is a much more realistic target for net zero than 2050, so by 2035 we should be looking to remove all fossil fuels from our business operations. We need to review our targets and revise them. We need interim targets so that we can monitor the steps along the way. The first task is to have the right level of ambition and to agree that with stakeholders. We need to bridge the data void, in other words to constantly build up data against which we can measure progress. The third challenge is funding the transition, recognising at the same time that inaction may well have its costs. For example, out-of-date buildings will decline in value.
There is a need to manage uncertainty. In particular regulations will evolve as governments become more aware of the challenges. The key to all this is moving together and bringing stakeholders with us. We need, they said, to listen and act together.
Apparently, 40% of the nation’s emissions are related to property and much of them are relatively easy to control. Looking at sustainability from a property point of view, there is not one single solution for the diverse parts of a portfolio. Data is essential if we are to control all classes of emissions. Scope 1 is the emissions our businesses create directly themselves; Scope 2 is those that we cause others to create, and the best example of this is when we use electricity and cause the generators to burn fossil fuels to produce the power. The most difficult to measure and to manage is Scope 3, the emissions created by our customers by using our products or services. Once again, this emphasises the need for data as well as cooperation with stakeholders.
A property company’s ability to make changes will depend on the asset type and the level of control. For example, if it directly owns and manages a building, it has a great deal of freedom of action. On the other hand an arm's-length lease, where the whole building is let to a landlord, who in turn sublets to tenants, makes communication with all stakeholders much more difficult. Landlord/tenant relationships are typically adversarial. This must be overcome, because reduced energy use and reduced emissions are in everyone’s interests.
Construction and development, not forgetting repairs and maintenance, reveal a whole new range of stakeholders along the supply chains. Construction has particular challenges. For one thing, it is one of the largest creators of waste. When it comes to the actual construction process, the issue of embodied carbon must be addressed. How much carbon is emitted in manufacturing the concrete, steel, bricks, blocks cladding and so on? The choice of appropriate materials at the earliest design stage is crucial. Robust data is needed all along the supply chain so that developers can be confident that the embodied carbon of the chosen materials is correctly reported.
Looking at the broader organisation, the panel agreed that the days of a sustainability department in an ivory tower should be over. Sustainability must form part of everybody's job description, and indeed, almost everybody in an organisation has some influence on the use of energy or the creation of emissions. Management boards are much more familiar and committed to sustainability issues than many other people in the organisation. There is a need for constant training embedded in job-related training in the same way as health and safety. Staff members need an overall understanding of the climate crisis and an appreciation of how their actions play a part in mitigating the risks. This is a situation of constant change and therefore teams need confidence when they are doing new things for the first time. It is useful to share best practice and case studies from other organisations and other industries.
An organisation which clearly demonstrates a commitment to sustainability is attractive to employees and can help both recruitment and retention, (although it is quite difficult to quantify this accurately.)
Financing sustainable construction or refurbishment can be a challenge, particularly where it is more expensive than traditional techniques. However, the panel recommended that the focus should be on benefits and risk avoidance rather than costs. Sustainability is future-proofing. It’s important to help leaders understand the issues and their implications for the whole business model. Decisions should be made on the basis of a dialogue, not a single short presentation.
In some cases the cost of refurbishment to minimise emissions and energy use may exceed the value of a particular property. However the value of an out-of-date property can only decline.
Closing thoughts from the session:
- Think long-term. Particularly appropriate for a property company.
- Build insights and assemble the data to support them.
- Build a roadmap.
- Create specific asset-level action plans: in other words, tailor action plans to the individual business units.
- Set interim targets.
- Focus consistently.
- Ensure that management systems are in place and effective for training, governance, metrics and data management.
Be self critical about the corporate vision. What does 2030 really look like? Review and revise that vision regularly.
And above all, be positive.
Still on transitions, there’s a warning this week from the oil company, Ithaca.
Starved of Energy
The BBC reports that Gilad Myerson, executive chairman of Ithaca, says that the objectives of Just Stop Oil and the policies of the Labour Party could put the UK at risk of being "starved" of North Sea energy leaving it reliant on imports. Just Stop Oil wants there to be no more new exploration licences for fossil fuels in the North Sea. The Labour Party has committed that it will also issue no further licences if it becomes the government after the next general election. Mr Myerson also complains about the windfall tax on North Sea operators.
Is there enough oil and gas in the existing fields in the North Sea to carry the United Kingdom through the transition period? That's a question which I have mentioned before and I am still looking for answers. I have consulted experts and I will get back to you. I'm sure this issue will run and run.
This is my final progress report. As Chairman of the Climate Change Committee, the Climate Change Act requires that every year before the end of June, we assess the government's progress against the targets they have set in it.
This is Lord Deben, outgoing chair of the UK’s Climate Change Committee.
We look back at the UK's warmest year on record. We all experience firsthand what the warming world will be like with temperatures exceeding 40 degrees centigrade in the United Kingdom for the very first time. Last summer's, heat wave caused unprecedented numbers of heat related deaths, wildfires, and significant disruption, and that was with a global temperature increase of 1.1 degrees. We are now on course for more than double that, and it's quite likely that this year will again be warmer. And with every increment of global warming, the climate impacts and risks escalate. Storms, floods, and heat waves become increasingly common and difficult to manage here in the uk. And last year there was a worse picture in the wider world. Much of Pakistan was underwater….
There’s a link to the whole of this video on the Sustainable Futures Report website, as well as a link to the full report and to Lord Deben’s letter to the Prime Minister.
This is what he wrote in that letter.
Dear Prime Minister,
Please find attached the Climate Change Committee’s 2023 Progress Report to Parliament, my last as Chairman, which is laid in Parliament today.
In it, we look back at the UK’s warmest year on record when, in the minds of many people, climate change truly arrived. Last summer’s record-breaking heatwave caused unprecedented numbers of heat-related deaths, wildfires, and significant disruption. During your premiership, you will no doubt want to lead the UK’s response to future climate-related extreme weather events.
Throughout my 11-year term, my Committee has held every Government’s feet to the fire on tackling climate change. It has been our role to ensure they make good on the legal commitments set out in the Climate Change Act and in the subsequent legislation which reflects the UK’s international obligations.
Every June, the law demands that the CCC presents to Parliament our honest and evidence-based assessment of how well the UK is doing to reduce emissions. This has not always been an easy message for the Government and I appreciate the openness and integrity with which it has been received over the years.
My final assessment is this:
The failure to act decisively in response to the energy crisis and build on the success of hosting COP26 means that the UK has lost its clear global climate leadership while game-changing interventions from the US and Europe, which will turbocharge growth of renewables, are leaving the UK behind. Inaction has been compounded by continuing support for further unnecessary investment in fossil fuels.
The Government must act urgently to correct the failures of the past year – it cannot wait until the next General Election. I have to ask you directly to heed the advice in the CCC’s report and reclaim the UK’s clear climate leadership role.
Our children will not forgive us if we leave them a world of withering heat and devastating storms where sea level rises and extreme temperatures force millions to move because their countries are no longer habitable. None of us can avoid our responsibility. Delay is not an option.
Strong words. We’ll see what reaction we get from the Prime Minister, if any.
Professor Piers Forster has been appointed as the interim Chair of the Climate Change Committee (CCC). Piers has served on the Committee since December 2018. He is founding Director of the Priestley International Centre for Climate and has acted as lead author for several Intergovernmental Panel on Climate Change (IPCC) reports. He will take up the role until a permanent Chair is appointed.
A safe pair of hands, but probably not a political operator like Lord Deben, who is a former government minister and very much a Westminster insider.
The Paris Finance Summit
Last week, the rich countries of the North came together in Paris to talk about what they could do to assist the developing countries of the South, which are the first to feel the effects of climate change.
“A new patchwork of pledges from the world’s biggest development lenders, set to release hundreds of billions of dollars for poorer nations, has raised hopes the financial floodgates are finally starting to open in tackling climate change and poverty.”
Politico is more cautious:
“Paris climate finance summit delivers momentum but few results. Rich countries were reluctant to engage with the Global South’s key demands on debt relief and new financing for climate action,” it says.
Ap News has a video of climate activists, including Greta Thunberg, protesting outside the meeting. Presumably they assumed in advance that there would be no useful results.
Sky News agreed that it was an important moment, but said that the wait goes on for important decisions. And an Oxfam spokesperson said: "We are deeply disappointed that this summit has failed to provide a response commensurate with the colossal needs of the global south to cope with climate change and provide their populations with essential services such as healthcare.
"While the wealth of the super-rich booms, the lives and livelihoods of the world's most vulnerable people are battered by crisis after crisis.”
Sadly, it looks like yet another talking shop like COP 27 and all the COPs that went before it.
In Other News…
Writing in nature sustainability, the authors warn that amajor concern for the world’s ecosystems is the possibility of collapse, where landscapes and the societies they support change abruptly. Where systems are effected by multiple stress factors rather than just a single one, collapse occurs significantly more rapidly.
“We discuss the implications for further research and the need for humanity to be vigilant for signs that ecosystems are degrading even more rapidly than previously thought.”
There is a link to the full article on the Sustainable Futures Report website.
There’s a new film out, although it’s on very limited release. Here’s the synopsis.
What does it take for us to act on the climate crisis – especially if we are the kind of person who should already be acting? In this funny, relatable portrait, a concerned yet ineffectual dad finds the first step is letting those unbearable feelings of climate anxiety in, instead of pushing them aside.
My Extinction is a revealingly honest account of how to feel your feelings, act on your privilege, and get active when threatened with extinction.
Have a look at the trailer. There’s a link on the Sustainable Futures Report website. It's not showing anywhere near me, but if you manage to catch it, I'd be really interested to know what you think of it.
And that’s it!
And that's it for now, so
That was the Sustainable Futures Report .
I’m Anthony Day.
Until, next time.
Business Green Webinar
Paris Finance Summit
Climate Change Committee
Earlier Tipping Points
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