Climate change tipping points – time to go all in on Net Zero
Four months in and 2019 already feels like a landmark year for corporate sustainability. 2018 was defined by the issue of plastics and 2019 is surely going to be remembered as the year we collectively woke up to the realities of climate change and the urgent need to act.
Forget about short-termism and incrementalism, and any other ‘ism’, it’s all about Net Zero. In short, if Net Zero was a racehorse (it’s actually a great name for a horse…), you’d surely put your house on it. And here’s why.
We’re used to hearing about tipping points in this sector, mostly associated with climate change and environmental degradation. But it feels like we’ve reached a series of other crucial tipping points this year and these will have a profound and lasting impact on business. I’m talking about the political, social and economic tipping points associated with climate change.
Two weeks ago, the Committee on Climate Change delivered its long-waited recommendations to UK Government, unequivocally suggesting that the UK follows a path to Net Zero emissions by 2050 as its contribution to stop global warming – and, by the way, setting out a hopeful and realistic plan to do so. In the same week, Wales, Scotland and then UK Parliament itself passed a motion to declare a climate emergency. For the first time in years, the political headlines weren’t about Brexit. Even the first question on Question Time was on climate change. And that’s before we consider movements calling for a Green New Deal in both the UK and the US. Make no mistake, sooner than you think, climate change is going to be front and centre of every political decision affecting every sector, business and city in the UK.
Of course, political parties also need to win popular support. And public concern about climate change has reached a record high , with a majority of voters indicating they would now support radical political action to address climate change , even taking into account the costs. This is thanks in large part to something of a social revolution, most notably the Extinction Rebellion protests and the inspiring, straight-talking Greta Thunberg who has led the international movement of school students to strike for climate. Add to that the David Attenborough effect, with the BBC (incredibly as it is to say this) beaming its first documentary showing the reality of climate change and its impacts on the world into our homes. Even Bafta has called for more plot lines and references to climate change on TV to help tackle the issue . This has all contributed to behaviour change and consumer consciousness going mainstream, which in turn will profoundly disrupt every sector. It will also mean huge public scrutiny on business – expect those companies not seen to be aligning their ambitions with these changing values to be quickly called out.
And let’s consider the economics for a moment. Money ultimately flows towards opportunity and away from risk. We already know that the UK low carbon economy is significantly outperforming the wider underlying economy. Elsewhere, the cost of renewable energy is now starting to dip below fossil fuel generation , and prices are coming down all the time . Battery technology is advancing apace and prices are tumbling, a trend that is predicted to accelerate. It seems that market forces are lining up behind the low carbon revolution. Add to this that investor scrutiny is turning on those companies exposed to climate risk or reliant on fossil fuels with no plan to transition. This too goes to the very heart of how companies create value for shareholders.
So, use this as momentum to engage and agitate in your business to start planning your pathway to Net Zero. It’s where the smart money is now.
Simply Sustainable finalist for ‘Consultancy of the Year’!
Mainstreaming sustainable finance: 4 key considerations for financial services companies
The Rise of the Consciousness Economy