Lord Stern: Business must build ‘green growth’ story to advance industrial strategy

Lord Nicholas Stern has called on businesses to make an effective case for low-carbon investment in the upcoming months to help construct an industrial strategy that is "green, sustainable and provides a leading example" to the world economy.

Speaking at an Aldersgate Group ten-year anniversary event in London on Thursday (29 September), the Grantham Research Institute chair at the London School of Economics (LSE) said that the private sector must utilise its vast capital and resources to generate a “green growth” narrative that influences climate change sceptics both within Westminster and the corporate sphere.

“We have to win the argument and deal with the bluster and anti-rationality,” Stern said. “We can, we have and we will. But we have to do that by contributing meaningfully to the meaning of the industrial strategy. It has to be about innovation, investment and sustainability. It has to be the growth story. We can show what it looks like and we have people who are listening and looking for that kind of argument and evidence. We have to overcome the dinosaurs along the way. A big piece of the business argument will be making that happen.

“How do we do it? Well, businesses must show that responsible is profitable. We show that there are very powerful examples of how to do things differently. The power of example is extremely important. Second, we emphasise the importance of strong, clear and consistent policy. Government-induced policy risk is the biggest killer to investment in the world.

“Whether it be policies that don’t turn to growth, whether its threats of nationalisation, or courts that can’t enforce contracts. We’ve got some examples of this in the UK and we have to show very strongly that clear, strong, credible and predictable policy is key to generating climate investment that we know is possible.”

‘In our hands’

The Aldersgate Group event also commemorated the upcoming 10-year anniversary of the Stern Review on the Economics of Climate Change, Lord Stern’s pioneering 700-page report discussing the effect of global warming on the world economy.

The transition of the global low-carbon agenda in the subsequent decade has been extraordinary, Stern commented, noting a revolution from the “glazed eyes” at the G8 Gleneagles summit in 2005 to US and China’s recent ratification of the Paris Agreement. He stated that technological advances and the increasing political will of many Governments in the intervening period has left it “in our hands” to change the face of global warming.  

Also speaking at the event was Environmental Audit Committee (EAC) chair Mary Creagh, who stated that the private sector is essential to sustainable development, with the voice of business “more likely to resonate” with the UK population than that of politicians. Creagh commented on the potential for new business models to help develop “progressive, zero carbon economies” in the upcoming decades.

Green growth

The event followed on from a recent Aldersgate Group panel discussion where green business leaders from a range of industries unanimously called for a narrative of “green growth” to be adopted by policymakers and the private sector alike, in an effort to ramp up climate finance and accelerate the shift towards a global low-carbon economy.

That event also hosted a keynote speech from BEIS Minister of State Nick Hurd, who confirmed that the UK will ratify the Paris Agreement on climate change “as soon as possible”, but insisted that the treaty must be replicated by a resilient domestic low-carbon energy policy developed in collaboration with the business sector.

George Ogleby

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