The UK's political consensus on climate change may be crumbling, but swift action from businesses can create and protect value from climate risks and secure the future of market-based economies, writes Bev Cornaby, Director of the UK Corporate Leaders Group. First published in BusinessGreen.
Working in the climate space, change is seen as inevitable. To get to a more sustainable economy, we must transition, creating new markets, new ways of working and new ways of living. This inevitable change is driven by the laws of nature and technological innovations – and their economic consequences – rather than by sentiment, ideology or good intentions.
However, not everyone views these changes as positive, and not all the changes occurring are in a positive direction.
In some countries, most notably the US, we are seeing a reversal of policies, undoing years of climate progress and curtailing investment in lower carbon, cleaner technologies. In the real economy, we are seeing more businesses publicly reassessing their targets. While some, such as Triodos Bank, have announced a sharpening of focus on real emissions reduction, other businesses have rolled back on their climate targets and are stepping away from ESG (environmental, social and governance efforts), even though employees would like their businesses to do more. We have also seen reductions in climate finance, which could have major implications for developing economies who require investment to transition themselves towards a lower carbon economy. And that is before we get onto the more devastating changes in weather we are seeing that are a direct result of climate change.
One of the most significant changes in the UK is the loss of a political consensus on net zero. While climate change has been a more divisive political bargaining chip in other countries with climate action labelled as ‘leftist' or ‘woke', the UK has built itself as a global climate leader due to its cross-party consensus.
The UK was the first major economy to put climate action in law. In 2008, led by the then Labour government, but with significant support from the Conservative opposition, only a few MPs voted against the Climate Change Act. Prior to that, it was the Conservative Party which in 2005 launched an early-day motion with over 400 signatories calling for a Climate Change Act. And, more recently in 2019, it was the Conservatives, led by former Prime Minister Theresa May, who put the UK's net zero greenhouse gas emissions by 2050 target into law because, she said, climate change "is the greatest threat to civilisation". The current Labour-led government, through announcing an ambitious 2035 emissions reduction target at the global climate negotiations in November, has sought to re-establish the UK as a global climate leader.
However, after faltering for a while, the UK's cross-party climate consensus is now visibly crumbling. Reform had already come out to say they would scrap the UK's net zero target, erroneously blaming it for higher energy prices and ‘deindustrialisation' in the UK, adding that the Party would tax the renewable energy sector. It has taken such a position even though it risks destabilising communities, such as in Humberside, which are playing a key role in the transition to renewables and still see this as a major growth opportunity.
What is more striking though is the leader of the opposition, Conservative Party Leader Kemi Badenoch, recently stating: "Net zero by 2050 is impossible". When launching her ‘policy renewal programme' she even took aim at previous Conservative governments, critiquing their approach. While still claiming she wants to "leave a much better environmental inheritance for my children and for yours", it is not clear how she would deliver that. She only stated that she would have members of her team "come up with achievable solutions."
What this demonstrates is a breaking down in consensus between the main parties in how we tackle climate change. But tackle it we must, and with greater urgency. Where the world changes, we must also change, not just with it, but ahead of it. Systemic sustainability risks are increasingly driving – and destroying – business value. The competitive landscape is transforming and there is huge financial value at stake. Geopolitics may continue to change, but swift action can create and protect value, and secure the future of market-based economies. There are steps businesses can take now to create the markets they need as we set out in our latest report: 'Competing in the Age of Disruption'. It's time we moved from cautious incrementalism to more ambitious innovation and a conscious effort to reset the rules that shape the global economy.
The biggest risk is not acting too soon – it is being too late.
First published in BusinessGreen
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About the author
As Director for CISL's Policy and Systems Change Collaborations Team, Bev leads CISL's UK policy (she is Director for the UK Corporate Leaders Group), international policy, and business and nature work. With over 20 years’ experience as a sustainability professional, she leads a team that develops high impact, systemic solutions to drive policy and industrial change towards a climate neutral, nature positive and socially inclusive economy.
Disclaimer
The opinions expressed here are those of the authors and do not represent an official position of CISL, the University of Cambridge, or any of its individual business partners or clients.