OPINION: Why businesses should be operating more sustainably

Prime Minister Theresa May announced last week that the UK will set a legally binding target to cut greenhouse gas emissions to “net-zero” by 2050 – making us the first major nation to set this goal.

We asked DMU expert Rick Greenough, Professor of Energy Systems, what this change means for businesses in the UK and why they should aim to operate more sustainably – not just for the planet, but their bottom line too.

“As an academic, I start from the assumption that reducing CO2 emissions is beneficial for our climate and therefore for all of us. However I am well aware that some people are sceptical of the connection between human activity and climate change.

“Even those who recognise the link may argue that since UK emissions are insignificant on a global scale, they have more immediate concerns than their carbon footprints. Especially when you consider that as a country we are well on the way to meeting our 2050 target of an 80% cut with respect to 1990 figures.

“Nonetheless, I believe there are four main reasons why a UK business should devote resources to reducing its carbon footprint.

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“The first is to win business from other businesses to whom they may act as a supplier. Most companies are looking to reduce the carbon emissions of their entire supply chain; these are known as ‘scope three’ emissions. Apart from the direct benefits of winning contracts, emissions reduction enhances stakeholder information and improves corporate reputation through public reporting.

“The second reason is to increase sales to those consumers who are serious about reducing their personal carbon footprint. We can call these the ‘Greta Thunberg generation’ – although many of us are much older than her! These consumers are often well-informed and willing to pay more for products that are sold by businesses that share their values. Consumers who base their purchasing decisions on other criteria than price alone tend to be valuable customers who are loyal to the brand.

“The third reason is to increase employee wellbeing. There is strong evidence that healthy buildings (for example, those that benefit from natural daylight, natural ventilation, green spaces and low levels of volatile organic compounds) lead to healthier and more productive workers.

“Sustainable travel schemes that promote cycling, walking and greater use of public transport also have undeniable health and wealth benefits – including reduced stress compared to driving; and reduced congestion in cities. Of course thousands of rail commuters may argue that their journey to work is far from stress-free but businesses can help them by designing homeworking schemes or job sharing incentives.

“When our cities become healthier, safer and more attractive places to live, more commuters may choose to relocate nearer to their workplace with many benefits to themselves and the environment.

“The fourth and final reason is that reducing the carbon footprint of a business will reduce the cost of compliance with legislation – such as the Climate Change Levy and the Energy Savings Opportunity Scheme (ESOS). It can also reduce the business’ energy costs.

“However it is worth noting that reducing the organisation’s carbon footprint may not always reduce energy costs and business leaders should take care to monitor and understand their overall energy use and usage patterns as well as cost. The size of an energy bill depends on both the amount of energy used and the cost of each unit of energy – both of which can be significantly reduced by careful energy management.

“Depending on the maturity of the journey towards emissions reduction, a business might also benefit from one of many energy management strategies – from simple switch-off campaigns to replacing old equipment with modern energy efficient alternatives.

“The latter might include the installation of local generation (such as combined heat and power systems or solar panels), energy storage, smart mini-grids and even engaging with their energy supplier to generate an income by offering energy services to the national grid.

Solar Panels City

“Some energy management strategies can actually increase energy use yet reduce cost and emissions in the medium to long term, by shifting demand to a time when energy price and grid emissions are low. On the whole though, most businesses do find that better energy management will reduce energy use, costs and emissions.

“As described in the Government’s Low Carbon Industrial Strategy, there are many diverse opportunities available to businesses for clean growth within our national transition to a low carbon economy. It is therefore wise to take advice on which of these opportunities are most relevant to a particular business.

“For those business leaders seeking advice, a good place to start may be to engage with a professional body such as the Energy Institute, the British Energy Efficiency Federation or the Chartered Institute of Building Services Engineers (CIBSE). They might also choose to attend a commercial energy event such as Energy Live EXPO or simply contact their local university engineering department.”

Posted on Thursday 20th June 2019

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