With Cop27 taking place in Egypt next month, the Times Earth Business Summit was a reminder to businesses of all shapes and sizes that, despite economic and geopolitical uncertainty, it’s vital they turn climate change commitments into action. Not only because it’s the right thing to do but also because there is a huge opportunity to be grasped by accelerating the transition to a low-carbon, nature-positive future.
The summit took place on October 20. Here are a few highlights from its diverse line-up of contributors and panellists, which included politicians Lord Goldsmith and Alok Sharma, as well as Patagonia’s Beth Thoren, Octopus Energy founder Greg Jackson, and NatWest CEO Alison Rose.
According to speakers at the Times Earth Business Summit,
climate change means business
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Give nature a seat on your board
The rates of biodiversity loss are unprecedented, with wildlife populations around the world having shrunk by nearly 70 per cent over the past 50 years. Yet, on political and business agendas, nature often comes second to climate change.
Businesses are more reliant on nature than previously thought too, with approximately $44 trillion of economic value generation moderately or highly dependent on it. Meanwhile, 25 per cent of our assessed plant and animal species are threatened by human actions, with a million species facing extinction, many within decades
So, how to redress the balance? Do something real that makes a difference, says Beth Thoren, Patagonia’s environmental action and initiatives director, EMEA.
“Be authentic,” she told delegates. “You can keep buying carbon offsets at $4 per tonne when a good one should cost $40-50 per tonne – or you can put some skin in the game.”
Patagonia puts some skin in the game. The company has spent seven years supporting NGOs and governments in the creation of a pioneering national park along the River Vjosa in Albania and Greece, one of Europe’s last remaining wild rivers that had been threatened by a huge damming project.
Lord Goldsmith, minister at the Foreign Office, highlighted the need for business to take the lead. “Unless the market is instructed on the real costs of nature, then the market will take us over the cliff. But governments – not just ours – are not brave enough to regulate because they fear the business backlash. So we need to hear from businesses that there is a real appetite for regulation.”
Business and nature
Clean energy
Alok Sharma MP, president of Cop26, gave his views on measuring up to commitments made in Glasgow last year, as well as the prospects for Cop27 in Egypt next month.
“Glasgow was historic if you look at all the commitments that were made to keep alive the prospect of limiting global warming to 1.5 degrees,” he told the summit. “But what we needed to do this year was push forward on implementation and get those commitments turned into actions.”
The world of Cop27 is very different to that of Cop26, due to the war in Ukraine and the cost of living crisis. But business and government must remain focused on achieving a just transition. “The chronic threat of climate change is not going away,” said Sharma. “The world has seen the commitments that were made at Cop26 and, at Cop27, the question will be, ‘Have you lived up to those promises?’”
KPMG’s John McCalla-Leacy and Times Earth Business Summit curator Lucy Siegle introduce the day’s events
The Times’s science editor Tom Whipple (left) discusses energy strategies with Greg Jackson, Dhara Vyas, Simon Virley, and Sarah Merrick
The KPMG View
Laura Forzani
Exec lead and COO (ESG), KPMG
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The UK has made great strides on clean energy, with almost 40 per cent of our electricity now coming from renewable sources and price parity with fossil fuels approaching fast. Committing to accelerate the shift can help businesses and consumers manage the impact of rocketing energy bills too.
According to Sarah Merrick, founder of shared-ownership wind farm business Ripple Energy, the desire to actively participate is strong. “Wind is the UK’s cheapest source of electricity, and people love it,” she told the summit. “But the sector is very corporate and misses out on all that consumer excitement.” Ripple’s customers each own a small piece of their own wind farm, and get a 25 per cent discount on electricity bills for the life of the asset in return.
Such grid reform is critical for the future, says Greg Jackson, founder of Octopus Energy. “Getting a grid connection for a new wind farm can take six or seven years and, even in the current crisis, we are still switching wind farms in Scotland off because we lack the cables to take the power to England, where the demand is.”
Dhara Vyas, director of Energy UK, says bold targets now need to be translated into a consistent strategy. “We need to go for it. What’s lacking hasn’t been ambition or targets from the government, but an actual delivery plan that we stick to and that gives investors confidence.”
“The impact of climate change on biodiversity is now very visible, and businesses are increasingly realising that they must put nature front and centre of their decision making.
“The pressure on business to make supply chains more sustainable and nature-positive is coming from shareholders and regulators, but also from consumers and from employees. Can you give nature a seat on your board? Actively protect and enhance nature and biodiversity now, rather than waiting to be told that you have to.”
Lord Goldsmith urges businesses to take the lead on climate action
The KPMG view
Laura Forzani
Exec lead and COO (ESG), KPMG in the UK
“It’s easy to get distracted given everything else that is going on, but my key message is that now is the moment for businesses to double down on clean energy. You will reduce carbon emissions, but clean energy is also the best way to improve your company’s energy security and reduce bills.
“During the oil price shocks of the 1970s, big advances were made in energy technology and efficiency. There’s a similar opportunity here and, for the first time in 30 years, we’ve got alignment between what’s good commercially and what’s good for the planet.”
The KPMG view
Simon Virley
Vice-chair and head of energy and natural resources, KPMG in the UK
A JUST TRANSITION
Alok Sharma (right) talks future commitments with Times Radio presenter Aasmah Mir
“It’s very easy to sit in judgment on governments and say, ‘They are not doing enough.’ As businesses, we need to look at ourselves and ask, are we doing enough?
“There are some practical things businesses can do to help ensure a just transition. Where you have an investment, ask yourself, what’s the impact of that investment on the local communities? Fundamentally it’s about driving greater understanding, and local engagement – if there are jobs tied to fossil fuels, for example, do you have a plan for those people so that they can transition too?
“This can seem like too much work but it fosters supply chain transparency, and when you have that transparency you can manage your supply chain in a sustainable way. You can enable a transition that is just, sustainable and makes great business sense.”
The KPMG view
John McCalla-Leacy
Partner and UK & global head of ESG, KPMG in the UK
Net zero and decarbonisation
Net zero is a collaborative effort, says Alison Rose, CEO of NatWest Group. “Climate change is a team sport. It’s not a case of ‘I win, you lose’. We all win or we all lose.”
And with NatWest’s small to medium-sized-enterprise business customers representing 50 per cent of “team UK” in terms of economic output, supporting them is crucial. “Energy security is a big issue for smaller companies,” Rose told the summit. “If you can say to them, ‘Here’s how you can reduce energy costs, make your business more sustainable – and by the way there’s a great business opportunity as well,’ that’s an interesting conversation.”
Graham Stuart, minister of state for climate, added that regulation is a key part of achieving “intelligent” net zero. “We need to minimise unnecessary regulation on the one hand but recognise that there are some areas – hydrogen, carbon capture, for example – where businesses want clear regulation, because without it you don’t have the business case.”
“Net zero provides the north star that businesses need on climate change. But it is not enough – you also need a detailed plan of how to get there. This is business’s ‘how’ moment. If you don’t start the journey, you risk getting left behind.
“Businesses need to think about their spheres of influence, as well as their control. What they can do internally with their business model, use of resources and supply chains – these are their spheres of control. But spheres of influence are also important – what can you do externally to influence other actors in the market and society?”
The KPMG view
Stuart Bruce
Director, climate risk and strategy, KPMG in the UK
Professor Emily Shuckburgh, director of Cambridge Zero, the University of Cambridge’s climate change initiative, explores the issues with Graham Stuart
Alison Rose stresses that we must work together to find solutions to climate change
Translating commitments into action requires finance and, according to Steve Waygood, chief responsible investment officer for Aviva Investors, the financial community needs to recognise that while the cost of action may be high, the cost of inaction is much greater.
“Climate change is the world’s biggest market failure,” said Waygood. “The physical risks of climate change dwarf the transition risks, and yet the politics and economics of the transition are being held back by the transition risk.”
The good news, says Dragon’s Den star Deborah Meaden, is that among grassroots businesses there is no shortage of appetite for investing in sustainability. “Every business I see really wants to make a difference on sustainability,” she told the summit. Some of them, however, lack the expertise or access to finance to make it happen. “It can be confusing – where do you get green loans, or support for R&D work? That’s where they need help.”
Major banks are changing the way they think about investing, says James Close, head of climate change at NatWest Group. “Carbon is a currency alongside capital, that’s how a bank has to think about it,” he said. “But there are no common standards for measuring carbon – what will really help is greater standardisation.”
Steve Waygood, Deborah Meaden and James Close encourage businesses to invest in sustainability
“The finance required for the transition runs into hundreds of trillions of dollars – you can’t do that by government money alone. It’s vital that the private sector leans into sustainable finance, not just because it’s the right thing to do but also because it’s good for business and investors alike.”
The KPMG view
Kay Swinburne
Vice-chair of financial services, KPMG
Sustainable finance
Wind is the UK’s cheapest source of electricity, and people love it
We need to minimise unnecessary regulation but there are some areas where businesses want clear regulation
Beth Thoren addresses the summit – as well as the challenges ahead
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Give nature a seat on your board
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Business Summit
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