UK firms need policy support to turn decarbonisation plans into action
Almost half of UK firms now have structured decarbonisation plans in place – up from a third from last year – but better policy frameworks are needed to inspire more companies to act on stalled investment plans to actually cut carbon.
New polling of UK firms from Aviva found that 44% believe they have structured plans to reduce emissions in place – an increase of 10% compared to 2022. Additionally, 66% of UK businesses are concerned about the impacts that climate change will have on their organisation – a 12% increase year on year.
The survey of more than 250 businesses found that 45% feel pressured by consumers to act on climate and 39% are acting due to competition and pressure from other firms to put decarbonisation plans into practice.
Despite the increase in awareness and plans, Aviva warns that UK action on climate is at risk of stalling, largely due to a stagnating policy framework that is yet to respond to competitive green packages from other nations, such as the US Inflation Reduction Act.
Indeed, many are having to pause or cut decarbonisation initiatives due to the current economic environment.
The survey found that 42% of businesses have paused investment in decarbonisation, while 56% believe that carbon reduction is currently unaffordable.
Aviva’s chief executive Amanda Blanc said: “I am worried that UK climate action has stalled this year, according to our analysis. The UK’s ambitious climate goals are under threat due to a lack of practical and detailed plans. This puts at clear risk the jobs, growth and the additional investment the UK requires to become more climate-ready. Despite this, we can see UK businesses trying to address the climate challenge in greater numbers and putting action plans in place.
“To support them, we urgently need a UK, whole economy, transition plan which allows us to compete more effectively with the US Inflation Reduction Act and help the UK become the most climate-ready major economy by 2030.”
Many businesses are turning to well-established measures to accelerate decarbonisation. Aviva’s survey found that 48% of organisations are looking at energy saving measures like renewables and ground source heat pumps, while 54% are focusing on waste management and recycling initiatives.
In the near future, businesses will look at supply chains and water use as ways to reduce their climate impacts.
The survey highlights a mixed picture for the UK’s overall progress in adapting to and mitigating climate change, largely due to a confusing policy backdrop.
The study was undertaken before Prime Minister Rishi Sunak moved to relax certain green policies. These included a five-year delay on the ban of new petrol and diesel cars and vans, to 2035; a weakening of requirements for all homes with oil and gas boilers to replace them with low-carbon alternatives and weakened requirements for landlords to improve building energy efficiency.
However, these changes “increase longer-term risks” to decarbonising the UK in line with its 2050 net-zero pledge, according to the Government’s advisory body the Climate Change Committee (CCC).
the CCC is foreseeing only a small change in the UK’s likely emissions trajectory in the near-term and medium-term as a result of changes made in road transport. This is largely due to the Government following Sunak’s initial announcement with a clear, updated Zero-Emission Vehicle (ZEV) mandate, setting annual targets for auto manufacturers to increase the share of sales accounted for by zero-emission options.
However, the CCC believes the changes made regarding home heating and building energy efficiency will carry more risk in terms of their ability to undermine the delivery of the UK’s legally binding carbon budgets and 2050 net-zero target.
In response, Aviva is calling for the UK Government to create a legislative environment that delivers a climate-ready economy by 2030. Particularly, Aviva has called on policymakers to release a comprehensive national Climate Transition Plan and reporting against delivery annually to provide businesses with greater policy certainty and confidence to invest in UK green industries.
Aviva also wants existing reporting requirements to expand to ensure that transition plans are front and central for UK firms, in line with the Transition Plan Taskforce’s gold standard framework.
The TPT states that a company’s transition plan should take a strategic and rounded approach that explains how it will meet climate targets, manage climate-related risks, and contribute to achieving net-zero.
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