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Decarbonisation to Net Zero - new core business value or basic business compliance?

Updated: Mar 8, 2022

Green hydrogen, carbon capture, electric vehicles, heat pumps and decentralised energy production are undoubtedly key levers in jolting present-day carbon emission trends with the seismic shift needed to reach NetZero 2050.

We are, however, at risk of placing too much emphasis on technology advancement and innovation and becoming distracted from what is right in front of us.

Whilst contributing in a small way to the UK climate change R&D story, the gains brought to bear through R&D and innovation make it too easy to place our eggs in this abstract, far-away basket.

Today, most UK Government Pre-Qualification Questionnaires or Invitations to Tender (ITT) ask for a statement of carbon reduction, confirming that the organisations are pledging to reach net zero.

Pledge sites have emerged in support of this carbon reduction call to action, including Race to Zero. Race to Zero asks that companies commit to three key activities:

  1. Quantify (measure) greenhouse gas emissions in Scopes 1, 2 and 3;

  2. Plan and implement actions to reduce emissions, with the goal of achieving net zero emissions in their organisation by 2050 or earlier;

  3. Consider contributing to further global emission reductions and sustainable development through the use of credible carbon credits and achieving climate neutrality now.

These are very noble activities and goals and, at the granular level, seem to be actionable, if not achievable.

Calculating the emissions for the three distinct scopes is complicated. Perhaps it is too easy for organisations to say, “yeah sure”, and ensure they meet the present-day pass/fail requirement of a singular ITT, without actually thinking too hard or doing much about the pledge expectations.

Indeed, this appears to be a view shared by the United Nations following a notable report from the UK-based Energy & Climate Intelligence Unit.

At the UK local government level, there is a strong desire to be doing what they can and taking the steps today that create the right kind of positive inertia. A National Audit Office report indicates, however, that Local Authorities in the UK are struggling to find a way through what to do, and when and how to do it.

The Audit Office report states "there are serious weaknesses in central government’s approach to working with local authorities on decarbonisation, stemming from a lack of clarity over local authorities’ overall roles, piecemeal funding, and diffuse accountabilities".

Three clear threads of discussion seem patently clear:

  • UK organisations focussed on innovation supporting decarbonisation technologies are crucially important to UK-based intellectual property development and future net zero outcomes.

    • These technological advancements need to make their way into operational transformation activities to arrive at and succeed with the vast decarbonisation ambition.

  • Each UK organisation should be thinking about the "here and now" and the positive steps that it can take beyond the pledge. Whilst keeping an eye on R&D moving to operations, UK businesses do need to take a little and often approach to action to build the positive inertia.

    • Businesses need to understand their Scope 1 emissions and take action against these and make periodic interventions with Scope 2 and 3 emissions.

  • Today, UK businesses require clarity in the expectations, and guidance in the practical implementation, of self-assessment and net zero transition.

    • This intervention is entirely necessary to ensure that net zero moves away from a basic business compliance question and toward a core business value.

Thanks to the Climate Change Act amendment, the future of successful UK businesses will increasingly see decarbonisation strategies increasingly be at the forefront of strategic planning.

In turn, we should expect to see core trading values and principles morph as each of these entities take their own ambitious steps to be more profitable and trade with stronger green credentials.


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