01 Nov Report suggests UK businesses require policy support to turn decarbonisation plans into action
A new study from Aviva has discovered that nearly half of UK businesses have structured decarbonisation plans in place, an increase from approximately 30% last year. Despite the increase, the study suggests better policy frameworks are required to encourage more businesses to pursue any delayed investment plans to reduce carbon.
The Aviva report found that 66% of UK businesses are concerned about how the impacts of climate change will affect their organisation, representing a 12% increase year on year. The report of over 250 businesses discovered that 45% feel pressured by customers to take decisive action on climate change, and 39% are acting due to rising competition and pressure from other organisations to put decarbonisation plans into practice. While promising to see a rise in awareness and plans, Aviva has warned that UK action on climate could decline due to a policy framework lacking a decisive response to competitive green packages overseas, like the US Inflation Reduction Act.
Many businesses have been forced to pause or reduce their decarbonisation plans due to the existing economic conditions. The report found that over 40% have halted investment plans in decarbonisation, while 56% believe carbon reduction plans are unaffordable for their organisation. Amanda Blanc, the CEO of Aviva, voiced concerns that UK climate action had stalled and that national climate goals had been impacted by a lack of practical and structured plans. This decline in growth will impact jobs, industry growth and the added investment needed to enable the UK to become more climate-prepared for the future. Despite these concerns, UK businesses are trying to address the climate challenges in larger numbers and implement new action plans.
Blanc explains that to support new climate plans, we need a national transition plan which enables everyone to compete more effectively with the US Inflation Reduction Act and support the UK’s work towards becoming a climate-focused economy by 2030. Many companies are looking towards established plans to strengthen their decarbonisation strategies. The Aviva report discovered that 48% of companies are exploring energy-saving measures, like heat pumps and renewables. A further 54% are focusing on waste management and recycling measures. In the next few years, businesses will likely look at supply chains and water consumption as other ways to reduce climate impacts.
The report gives a mixed representation of the progress in implementing and tackling climate change, predominantly due to the uncertainties surrounding national policies. The study was completed before the UK restructuring various green policies, including a five-year delay to the ban on petrol and diesel vehicles, a change to requirements to replace oil and gas boilers with low carbon alternatives and a weakening to landlords having to improve building energy efficiency reports. According to the Climate Change Committee, the recent changes will increase the long-term risks to decarbonisation plans in the UK by its 2050 net zero pledge. The CCC anticipates only a minor change in the emission levels in the short and medium term, as a consequence of the recent changes to road transport. The CCC also believes the changes to domestic heating and building efficiency hold more risk in the UK meeting its legally binding carbon budgets and 2050 net-zero targets.
In response to the CCC, Aviva has urged the UK Government to implement a legislative framework that provides a climate-ready economy by 2030. Aviva is calling on policymakers to distribute a national climate transition plan and report against delivery to enable businesses greater policy assurance and confidence to invest in UK green industries. Aviva also wants to expand the current reporting requirements to ensure transition plans are the priority for UK businesses, by the Transition Plan Task Force’s Gold Standard Framework. TPT highlights that a business transition plan should be strategic and explain how it will achieve its climate targets, manage climate-related risks and contribute to reaching net zero.
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