Ready for Change: Pathways to a low-emissions future

Jay Owen Green Prosperity, Greentech


New research from The Economist Intelligence Unit examines British businesses’ strategies for lowering emissions and their progress towards climate-related goals.

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In June 2019 the UK government signed into law a target of eliminating net emissions of greenhouse gases by 2050. In following the recommendation to do so from the Climate Change Committee (CCC), an independent public body, the UK became the first G7 country to establish such a goal as a legal obligation, setting the stage for an ambitious transition to clean energy.

Britain’s success in achieving “net-zero” will require businesses across all sectors to make fundamental changes. According to government figures, businesses accounted for 43% of the UK’s total energy consumption in 2018. Businesses can expect a raft of policies and initiatives designed to help, encourage or oblige them to play an active part in delivering a decarbonised future.

But many firms are already well advanced in pursuing low-emissions strategies, motivated by existing regulation, consumer pressure, business benefits such as cost savings and their corporate social responsibility agendas.

Alongside purchasing cleaner energy from suppliers, the electrification of vehicle fleets, and new water and waste management strategies, self-generation of energy using on-site renewables and other low-carbon technologies is a big part of the energy-efficiency picture at many companies.

In this report, we surveyed 205 senior executives working in four energy-intensive industries to understand how self-generation fits within businesses’ wider corporate sustainability initiatives and the pathways that businesses are mapping to a low-emissions future.

Key findings include:

      • Confidence is high that companies will achieve net-zero emissions by 2050. More than seven out of ten respondents (71%) believe that their organisation is very or extremely likely to achieve this goal. Only 7% consider it unlikely. Respondents from the automotive manufacturing sector are the most optimistic (with 83% saying that meeting the target is very or extremely likely), followed by those from chemicals manufacturing (73%), retail (72%), and food and beverage manufacturing (61%).
      • Using self-generation to meet at least some of a company’s energy needs makes good economic sense and provides a public demonstration of a firm’s commitment to sustainability. When asked about their main reasons for generating more of their own electricity, both cost savings and environmental considerations were cited most (by 45% of respondents), followed by brand perception as a green, sustainable or innovative company.
      • Respondents expect that the amount of energy their organisations self-generate will rise. Today, self-generation accounts for between 20% and 39% of overall energy consumption at 38% of respondents’ organisations. In five years’ time, more than half (52%) expect their firms to self-generate that same proportion. Meanwhile, 5% expect to meet over 40% of their energy needs through on-site generation, something that no respondent does today.
      • Businesses are actively driving lowcarbon transitions to meet climate-related targets, independent of regulatory pressure. These actions are reportedly motivated by environmental concerns (34%), cost (23%), and brand perception or customer pressure (21%), with current and anticipated regulatory demands each lagging well behind (12% and 10% respectively).
      • To help meet these climate-related targets, firms are typically monitoring direct and indirect emissions with varying degrees of ease and success. Businesses are more likely to be monitoring their direct emissions than indirect emissions along the supply chain. Almost a quarter (23%) estimate that they are monitoring 60% and above of the direct emissions that derive from their own production, operations and transportation of goods. When it comes to indirect emissions from sourcing and supply chains, however, only one in ten monitor 60% or more, even though these often account for the vast majority of a company’s overall greenhouse gas emissions.
      • Emissions reduction budgets have increased, enabling companies to both set climate targets and to monitor their progress in meeting them. Almost half of respondents (47%) have seen their organisations’ budgets rise by up to 20% over the past 24 months; for a quarter of respondents, they have increased by 20% or more.

    Download the briefing paper to find out more.