“What we need is policy, not more consultation”
Neil Bentley, director of business environment at the Confederation of British Industry, has a mantra: You've got to be green to grow. And he is chanting it as the UK moves to a low-carbon economy. Tom Idle spoke to him about the new mood sweeping the CBI
Neil Bentley is optimism personified. And that is good news because, as director of business environment at the Confederation of British Industry (CBI), Neil is well placed to voice corporate concerns about how the UK will remain competitive as it moves towards a low-carbon economy.
It has been six years since Neil joined the CBI, initially running the organisation’s employment and skills programme, before concentrating his policy development expertise on public-sector reform. He is now six months into his new role at the Centre Point building, London, and he is loving every minute – excited by the opportunities climate change brings to the UK’s business community. “This is a major opportunity for businesses,” he tells me. “You’ve got to be green to grow.”
It is a message the CBI keenly spreads at every opportunity: stresses to its membership of companies of all sizes; in Whitehall; in Brussels; in America – which is where Neil is flying off to next, following my meeting with him. This new enthusiasm for the agenda is a far cry from the CBI of old.
The publication of the CBI report, Climate Change: Everyone’s Business, initiated by the new director-general and former FT editor Richard Lambert, marked a real turning point for the organisation. For the first time, it recognised the role its 200,000 members could play in addressing global warming, providing the key linking mechanism between government and consumer. Of course, many of those members were already demanding a more progressive approach by the CBI.
That report, led by BT chairman Ben Verwaaven, was the catalyst for the establishment of a climate-change board. And there is now a three-year delivery plan that Neil will lead. At last month’s Chartered Institute of Management Accountants conference on performance management for sustainability, speaker Oliver Greenfield from WWF was asked whether he thought the UK was at a tipping point for business engagement in the agenda. “Well, I got invited to lunch by the CBI the other day, so I guess it must be,” he replied. Times have certainly changed.
“The CBI’s position has changed,” admits Neil. He puts this down to new leadership from Lambert, plus the setting up of the climate change task force, which has “changed the tone and emphasis of what the CBI is doing on climate change”. So, is this the end of the anti-environmental regulation stance? “It’s not so much about anti-regulation, but getting the right regulation in place for the outcomes you want to achieve,” I’m told.
“For us, it should be about better regulation and light-touch regulation, rather than anti-regulation. That is why we always argue for robust debates, because lots of other organisations say regulation is always the answer. But we always say, ‘well, what is the problem to which regulation is the answer?'”
Asking these types of questions alongside Neil is a policy team of eight, all keen to stress the job business can do in mitigating climate change, as well as making money from it.
The CBI is in the process of finding out what businesses are doing to address environmental concerns, and how that can be used in the lobbying exercise to get what businesses need in order to sustain that activity and grow.
Another part of this wide-ranging agenda is getting information to the broader business community on what the leading firms are doing. A new climate change-themed website, launching later this month, will provide the platform for this work. According to Neil, there is not so much of a gulf between the companies making the most of the sustainability agenda and those not – just that some are more advanced than others.
“It’s not a case of some people are doing it and some people aren’t. Everybody recognises that sustainability and a low-carbon economy is the way to go. They are at different stages of understanding what they need to do.”
What is likely to quench this thirst, at least in the short term, is the desire to cut costs and be as efficient as possible during this period of economic difficulty. But, in the longer term, Neil is hopeful that business strategies will be developed with sustainability at their heart. “Economic cycles will change, political cycles will change, but this is a long-term agenda,” he argues. The Climate Change Bill will be a stringent piece of legislation. The day before meeting Neil, Lord Turner, chairman of the government’s Committee on Climate Change, announced recommendations that the bill be tightened to prepare for 80% carbon emissions reductions, as opposed 60%. Is the CBI happy with that? And, more importantly, is business ready for that sort of commitment? “We are not scientists,” Neil tells me. “The experts have said that’s what we need to do. And we’re up for the challenge.”
What Neil wants now is a government-devised framework of policy and decisions to be made on three key issues. The first is on the planning bill. “You cannot invest and renew your energy infrastructure in nuclear, and onshore and offshore renewables, if you can’t get the planning process right.”
The second is on energy efficiency. “There needs to be a major drive from government in educating consumers and businesses.” The third issue is clean coal technology. “We need a decision on carbon capture and storage,” says Neil, stressing the need for not just one demonstration project, but maybe ten or 12 across the EU – a bit like Germany’s established small-scale pilot. “We need some clear decisions from government because, without that, we are not going to be able to make the 2030, never mind 2050, targets.”
We go on to discuss how the London Array offshore renewable energy project collapsed because of a lack of policy to attract investment in infrastructure. “There will be businesses looking at the UK and wondering whether they can trust to invest here. At the London Array project, the planning system spun that process out – the decision was then left, capital costs increased and it made it uneconomic.
“These companies are operating on a global scale, and there are investment opportunities in other countries who have got the right policy framework in place.”
Despite his concerns, Neil’s optimism remains. He is happy with the government’s decision to create the Department for Energy and Climate Change, seeing it as a chance for joined-up thinking on balancing the UK’s energy need with its climate change ambitions.
“We’re going to see much more debate about balancing up energy security and supply with climate change. That’s why the department is a good idea – it can bring those two agendas together.”
But it is decisions we need, not more consultation, argues Neil. “We need government to start setting out a coherent policy framework.” Of course, central to this for Neil and his team will be urging government to work with the business community.”
Neil is quick to cite Germany as a place we can learn plenty from. “We’re a bit behind the curve and our concern is that we are potentially losing out. A couple of years ago we might have been seen as a leader in climate-change technology, but Germany has got a step ahead of us now.”
That won’t be the case for long, hopes Neil. The pressures exerted by the Climate Change Bill, with its legally binding carbon budgets, and the results of the EU emissions trading scheme and the UK’s own carbon reduction commitment (CRC), will be successful, he says.
“We need to make sure emissions trading is the core building block of the EU’s climate change agenda. If you get the price of carbon at such a level, it starts to have an impact on business behaviour. It can demonstrate to other regions around the world that cap-and-trade is the right model for influencing business behaviour.”
The CRC is another favourite tool of Neil’s members, eager to put a price on their carbon use in order to drive investment in new technology. But given the current confusion surrounding the scheme, due to come into play in 2010, Neil wants to make sure the methodology behind it is correct. “It’s quite complex. That’s why we’ve been pushing the government to try and simplify it as much as possible.
“We want government to recognise that this is about behaviour change. If you get it wrong, there will be a set of unintended consequences – and then you start to undermine the credibility of what you are trying to achieve.”
It is clear there is still a huge amount for the government to do in cascading information to the business community, and making clear what the intention of the CRC is. The idea of publishing a league table on the progress being made by business on the CRC is causing plenty of unease among the companies I’ve spoken to recently.
Neil agrees that it is a “very live concern”. “It’s something we’ll have to talk to government about in a lot of detail. This so they understand the reputational risk, and what that means in terms of company and shareholder value – that it’s not just a league table to be published, but it will have an impact on how companies are seen.”
Neil has a lot on his plate. But he is excited about the future, particularly by the impact the Climate Change Bill might have on how the UK is seen by the rest of the world. “Once the Committee on Climate Change is on a proper statutory footing – and once you get legally binding carbon budgets alongside the Budget next spring – that’s when all of this is going to come home to policy makers and businesses: that the UK is actually at the forefront, leading the world towards a low-carbon economy.
“That is going to send really strong signals to the rest of the world.”