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Climate Change Comittment

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    Robert Chapman
    Chartered Surveyor, Strategic Property & Regeneration Adviser with 31 years’ experience.
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Robert Chapman requests Business membership Organisations in Wales to commit ‘‘The One Big Thing’’ (Eminent Climate Scientist, Professor Chris Rapley)

In an opinion piece in the Western Mail on Friday 11th October 2019 Ian Price, Director CBI Cymru stated: ‘‘Climate Change is everyone’s responsibility’’. I agreed with the essence of his message on the premise that the Business sector is a force for change and influence.

Subsequently, I pondered on whether there was scope for collaborative business leadership and influence at scale. I concluded that the time for such business ACTION is now, echoed by (i) Greta Thunberg’s comments to politicians, saying “You keep telling us what you think is realistic, rather than what needs to be done,” and (ii) environmentalist Bill McKibben: “The problem is we are negotiating with science, and there is no wriggle room”. Timeliness is important mindful that the UK government is hosting COP26 in 2020, notwithstanding the fact that as recently as Monday 25th November 2019 the World Meteorological Organisation confirmed that in 2018 atmospheric concentrations of carbon dioxide and other greenhouse gases reached new highs once again.

The fact is that the garden of Eden is no more. It is suggested that we have 10 years to change our path so it is imperative that significant action is taken now. Business drove the revolution before and must NOW do so again. Business as usual is no longer acceptable and ‘‘If Attenborough is no longer tiptoeing around these issues, then neither should business.’’

Mainstream TV and film have shone a light on the topic of climate change which is the symptom.  Consumer Culture is the disease. For example, Sir David Attenborough’s message about waste. ‘‘The one thing we all have to do is simply not to waste’’.

Having said what I have said, there is some evidence of action. The UK Parliament has declared a climate change emergency, as well as the Welsh Government. Carbon capture, usage and storage is on the agenda as well. Indeed, declarations have been made in 1,195 jurisdictions and local governments, including Cardiff. What is encouraging is the breadth and depth of action. For example, Frome Town Council have declared a climate emergency. The city of Nottingham has revealed a desire to become the UK’s first carbon neutral city. Indeed, communities such as Aberporth in West Wales and Chepstow in East Wales have vouched to go plastic free. One could go on with so many more multifarious examples around the UK.

Furthermore, considering that the built environment accounts for around 40% of emissions, any net-zero target will require significant transformation in that sector too. That is why the UK Green Building Council’s (UKGBC) framework launch on 30 April 2019 (outlining how developers, designers, owners, occupiers and policymakers can define and deliver a net-zero built environment) was welcome news. But business is also stepping up to the plate of its own volition, whether in the guise of a microbusiness like mine or the boss of Unilever calling for a business push on net zero emissions.

And the world of finance is changing too. It was encouraging for me to research work undertaken by the Bank of England and the Governor, Mark Carney. Some years ago, he gave a speech entitled “Climate change is the Tragedy of the Horizon” and that “once climate change becomes a defining issue for financial stability, it may already be too late”. Subsequently, in March this year, he gave a follow-up speech entitled ‘‘A New Horizon’’. It provides a progress update, highlighting the importance of reporting and analysing risk as well as opportunities for return that Climate Change brings to financial services firms. Borrowing words from the Governor, “the task is large [there is certainly more to do!] and that the window of opportunity is short, and that the stakes are existential”. Then, at The Task Force on Climate-related Financial Disclosures (TCFD) Summit in Tokyo (October 2019), he talked about ‘strengthening the foundations of sustainable finance’ and ‘transition to net zero’.

My interaction with the Bank of England suggests that in fact and in action it is being front footed on climate change. Working with other central banks, supervisors, firms that it regulates and technical experts, the Bank:

  • has established a Climate Financial Risk Forum, co-chaired with the FCA (Financial Conduct Authority), that aims to build capacity and share best practice across industry to advance financial sector responses to the financial risks from climate change;
  • Via the Financial Stability Committee, is considering the system-wide financial risks from climate change (both physical and transition risks) which could have the potential to bring losses to banks, insurers and other financial market participants;
  • has engaged internationally by being a founding member of the Network for Greening the Financial System (a coalition of central banks and supervisors and actively supported by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures);
  • has decided that its next biennial stress test (2021) will test the resilience of the UK financial system to the physical and transition risks associated with different climate pathways. This would be a world first and shows leadership in this area.

I’m persuaded that the Governor of the Bank of England has shown undoubted leadership. He recently made it clear that in his opinion firms that ignore the climate crisis will go bankrupt. Put another way, ''Firms that align their business models to the transition to a net zero world will be rewarded handsomely. Those that fail to adapt will cease to exist.'' The question is whether the transition will be abrupt or smooth?

Anyone in doubt about this (vis-à-vis unsustainable growth and planet degradation) should watch Our planet – Our business,. This is a must watch video which provides a powerful message about climate and biodiversity. Implicitly, it suggests that responsible business has no option but to be a force for change. The video sets out 5 universal goals:

1. Transition out of fossil fuels Progress is being made but much more needs to be done at scale and pace. Consider, for example, the actions of some of the world’s most influential companies, committed to 100% renewable power.

2. Minimise the space we use;

3. Return the ocean to good health;

4. Eliminate waste – think resource, think circular economy; and

5. Reimagine success: how does the quest for perpetual growth reconcile itself with a thriving planet? Economic success is not success if it is destroying the planet. Change is happening but it must accelerate. Ask the Millennials who will benefit from 30trillion dollars from the baby boomers. Sustainability is the only business plan – business needs to innovate to demand less.

With such goals in mind, it is important to come together to persuade political leaders to effect change. Equally, in my opinion, ‘agency’ is the order of the day. Business must get on and DO. A viable future is one in which businesses (with an appetite to lead) innovate to give stability and reliability. Empathically, I am conscious that initiatives that imperil business longevity and profitability can struggle. Furthermore, for business there is inevitably a finite amount of thought and action capacity available in the maelstrom of everyday life to address everything. The issues that are addressed for the moment are the big or very obvious. The fact is though that climate change and biodiversity are looming larger and LARGER. As a commentator on the ‘Our planet – our business’ states, there is no business on a dead planet. Therefore, in my humble opinion, we must reduce consumption drastically and achieve prosperity without growth.

Thinking about business collaboration, I was inspired by The Better Buildings Partnership. In September 2019, twenty three of its members responsible for over £300bn Assets Under Management and 11,000+ commercial properties globally (responsible for over 1.2 million tonnes of carbon emissions per annum) signed a Climate Change Commitment. The Commitment highlights the need for buildings to be net zero carbon by 2050 and commits signatories to publicly publish their own pathways to achieving this by the end of 2020. These pathways will cover new and existing buildings, both operational carbon and embodied carbon, and critically, include the impact of the energy consumed by the buildings' occupiers. Beyond the requirements of the signatories, the commitment highlights the need for unprecedented collaboration across the industry and calls on all stakeholders to step up to the challenge of delivering net zero carbon buildings. It struck me that there was a clear parallel here for business membership organisations to show leadership by signing up to a similar Climate Change Commitment.

In conclusion, my challenge to the leaders of businesses and business membership organisations in Wales is that there should be unprecedented collaboration to achieve a co-produced Climate Change Commitment for Wales. This would send out a powerful message – something to match the Wellbeing of Future Generations (Wales) Act 2015. Put simply, I think it’s the right thing to do.

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