That is according to Carbon Trust chief executive Tom Delay, who was charged by edie with the unenviable task of predicting the major trends in the global sustainability agenda in the year ahead.

It has been a successful past twelve months for the Carbon Trust and Delay, whose 25 years of service to sustainability was rewarded with a CBE in the 2018 Queen’s New Year’s Honours list.

Delay was one of several members of the sustainability community to gain recognition in this year’s roll call, all of whom helped to make 2017 a truly memorable year for the green economy.

Among a host of notable achievements in the UK, there were record renewable generation figures, the country’s first subsidy-free solar farm, and a growing uptake of electric vehicles (EVs).

Meanwhile, breakthroughs in low-carbon innovation and cost reductions in renewable sources helped to turn international ambitions on climate change into reality.

“Globally, it was an extraordinary year,” Delay told edie. “It was the year when the vision of a sustainable business case for the future came real. Prices and costs have come crashing down and now there is a positive business case to be made without subsidy in many cases for renewable technologies, better infrastructure in buildings and so on. 

“In that sense, 2017 might have been a tipping point. I actually think that 2018 might be a bigger tipping point still.”

Financial disclosures

Gazing into his sustainability crystal ball, what are the major trends that Delay envisages shaping the green economy in 2018?

On a corporate level, we should expect to see an accelerated shift towards disclosure and transparency of climate risks.

In the past couple of years, Delay notes, global frameworks such as the UN Sustainable Development Goals (SDGs) and the Science-Based Targets (SBTs) have helped a growing number of businesses to this end.

Indeed, his organisation works closely with a number of top multinationals including BT and Carlsberg, to set targets in line with a below 2C world, an objective which Delay says sends a “very powerful and simple” message to external stakeholders.

According to Delay, this year will be characterised by a heightened focus specifically on financial disclosure, with boardroom executives playing a more central role in ensuring sustainability factors are taken into account when providing information to investors and customers.

Delay said: “Overall, I think 2018 will be the year where we see more disclosure, more transparency and a willingness to be objective about what is being discussed.”

Financial markets increasingly want to see useful data to assess sustainability risks, as highlighted by the guidelines set out by the Task Force on Climate-related Financial Disclosures (TCFD) initiative last summer.

“The consequence of that is that this whole agenda is going to become even more relevant to boardroom discussions than it has been in recent years,” Delay said.

Tipping points

As more companies open up on the social and environmental impacts of their business operations, the low-carbon technologies and solutions which can help those same firms minimise their impacts will continue to tumble in price, Delay says.

Last year saw offshore wind achieve an all-time-low strike price in the UK. The viability of battery storage for EVs is vastly improving, meanwhile, with the cost of lithium-ion batteries falling by up to 73% for transport applications over the past seven years.

With ‘tipping points’ expected across a range of technologies in the upcoming months, Delay suggests that these solutions will become entrenched in strategic business planning.

“2017 was the year that people saw renewables as the cheapest and most resilient and cleanest way of delivering power. That’s going to become entrenched in business and investment thinking in a way that hasn’t happened so far. The consequence of the plummeting costs is that there will be a lot more investment in renewables globally at the expense of other things. 

“There is also going to be potential tipping points in a couple of other areas. EVs are building an extraordinary momentum which will just grow and grow. 2018 could well be the year that we feel EVs have come of age. Energy storage solution might not quite be ready to become the big story of 2018 but it’s certainly going to be there or thereabouts.” 

Power vacuum

With all this in mind, what does Delay expect the global sustainability landscape to look like come the end of the year?

The developed world to be in no fit state to lead the pack, he predicts; the UK remains distracted by Brexit negotiations, one of a myriad of political issues on the agenda for the rest of Europe; while the US continues in defensive mode under a Trump administration determined to ramp up fossil fuel investments.

“You therefore need to look at what is happening elsewhere,” Delay said. “In a small scale, I would argue that Latin America is stepping up to the plate. National governments are putting in place legislation that is very ambitious. They are transferring the budgets to that legislation to make it real.”

The most exciting place in the world to be in 2018 will be China, Delay insists. The Asian superpower last year confirmed plans to phase-out diesel vehicles and committed to spending $363bn on renewable power capacity by 2020.

Meanwhile, China last month further signalled its intent to address climate change with the launch of the world’s largest carbon market, in a move tipped to accelerate the shift towards global pollution pricing.

Delay continued: “China, in a very quiet manner, is looking at the vacuum in terms of leadership that the US has offered. It is quietly stepping into making China the green leader globally.

“The sheer scale of the domestic markets in China now mean that things like technologies can be developed and deployed, with the costs coming down, in China alone.

“China will engage with the rest of the world, and both buy in and sell out technologies and solutions, but it has now become so big, and the Government support for the sector in China is so powerful, that it could almost do it alone.”

George Ogleby

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