Given its impacts across every aspect of UK life, the sector will no doubt be analysing the repercussions of the Government’s announcement that Covid restrictions will largely be lifted in England on 19 July. Much has been written on the interplay between Covid, sustainability and future green business. Hastening financial products that ramp sustainability growth to avoid future climate crises will be essential and has been a hot topic over the last month.
The long-awaited UK Infrastructure Bank has been opened for business, with Chancellor of the Exchequer Rishi Sunak hailing it as an opportunity to accelerate ambitions for tackling climate change whilst supporting local growth.
Initially £12 billion of capital will be made available, with the bank able to issue £10 billion of Government guarantees, helping to unlock more than £40 billion of overall investment. The Government hopes it will provide a catalyst for change and act as a major driver for post-pandemic recovery.
Yet despite initiatives such as the UK Infrastructure Bank, the Government’s climate advisors are urging greater action, and fast. The Climate Change Committee’s latest progress report says whilst the government should be given credit for its historic climate promises, it has been too slow to follow these with delivery. Based on current policies, the UK is only likely to deliver one-fifth of the emissions reductions needed by 2035. And with every month of inaction, it will be harder to get back on track.
In appraising the progress made on cutting emissions to Net Zero and adapting to the climate risks facing the UK, Lord Deben, Chairman of the Climate Change Committee, said: “Continue to be slow and timid and the opportunity will slip from our hands. Between now and COP 26 the world will look for delivery, not promises.”
Tax relief for manufacturers
Manufacturers are also being urged to deliver on climate related targets. A new report shows only 51% of global manufacturing organisations have aligned themselves with the goals of the Paris Agreement. The paper from the Capgemini Research Institute found that 55% of UK manufacturers have aims to be carbon neutral between 2031 and 2040, with 52% on track to meet this goal.
With more businesses committing themselves to more sustainable methods of manufacturing to reduce their environmental impact, many will be looking at the investments they can make to drive their business forward. To accelerate their Net Zero ambitions, we’re encouraging businesses to take advantage of the government’s super-deduction tax. The scheme, which was introduced in the 2021 Spring Budget, offers reliefs for solar panels, electric vehicle charge points or myriad other low carbon technologies. It is an ideal opportunity for manufacturers to invest in energy efficient plant and machinery assets, which would not only boost productivity but help them meet their sustainability ambitions.
SMEs and the Net Zero challenge
Businesses of all sizes have a role to play in reaching climate change targets. But the latest research by Lloyds Bank revealed that whilst a growing number of SMEs value the importance of sustainability, millions could be struggling to understand and meet the demands of achieving Net Zero goals.
The good news is the value they place on being ethical and sustainable with Managing Director of SME & Mid-Corporates at Lloyds Bank saying: “For the smallest of SMEs, many of which will be focused on their immediate needs and recovery from the impact of the pandemic, it’s important not to lose sight of the value they themselves recognise in sustainability. Demand from government, customers, and suppliers to be ethical, and sustainable will only increase and eventually become expected rather than a unique selling point.”
A year of action
Climate Investment and commitment across the board would help the UK make 2021 boldest year of UK net zero action, which is the call from the Confederation of British Industry (CBI). It believes the UK must lead the world by example to avert the catastrophic global impact of climate change. At its Road to Zero virtual conference last month, Director General Tony Danker called on the government to fill in the gaps in its existing plans as rapidly as possible as businesses were waiting on blueprints that would unleash a new wave of business innovation, investment and delivery, driving action in key areas over next five months.
The final word
“This month, we see how Net Zero ambitions in the UK require defined structures and stakeholder linkages to actually hit demanded pace of change,” comments Capitas Finance’s chief executive officer Darren Riva.
“All the top-level policy and targeting in the world won’t embed actual change without engagement, transparency and knowledge on where the right money is and indeed, who can access it.
“Today, it isn’t just about knowing what Net Zero is. What businesses and lenders need to know is what they should be doing about it.”