Highlights from The Net Zero Review

isla was among many organisations to respond to the Call for Evidence for Chris Skidmore's Net Zero Review.

Following a Call for Evidence in September 2022, Chris Skidmore MP – formerly Minister of State jointly at the Department for Education and the Department for Business, Energy and Industrial Strategy (BEIS) – recently published the findings of his Review of the government’s Net Zero Strategy.

More than 1,800 responses were given to the Call for Evidence, of which isla was one, and 50 roundtables held spanning the totality of the UK.

The result is a staggering body of work, covering more than 300 pages and making a total of 129 recommendations to government, providing plenty of food for thought as the UK works towards delivering on its target to slash emissions by 78% by 2035 compared to 1990 levels.

While the findings can’t be reduced to a neat listicle, there are certainly some standout statements and insights that are worth pulling out and which could have potentially far reaching consequences for sustainable events and the agencies, brands and venues who commission and deliver them.

‘There is no future economy but a green economy

‘In a high emission future, the level of global disruption will be so severe that ‘normal’ economic activity will become very challenging,’ the Review outlines. While this statement and the intrinsic link between the economy and climate change isn’t a huge departure from warnings by the IPCC, The CCC and successive COP administrations, there is a sense of urgency throughout the Review that we must strike while the iron is hot to take advantage of the opportunity of net zero before the planet resources are irreversibly depleted. Here are some lines from the Review which speak to this rallying call.

  • ‘Net zero is the economic opportunity of the 21st century’
  • ‘This is too important to get wrong’
  • ‘We must act decisively to seize the opportunities in a global race’
  • On investment in net zero: ‘Moving quickly must include spending money’.
  • ‘Net zero can materially improve people’s lives now, and in 2050’
  • ‘Ultimately, the benefits of net zero will outweigh the costs.’

And what of the benefits of a net-zero economy? The report, citing research on the subject, suggests this could include a bolstering of green skills and jobs, a speedier transition to clean energy and a move towards responsible land use that includes sustainable farming practices, deforestation-free supply chains and biodiversity-rich landscapes that also have the potential to sequester carbon from the atmosphere.

‘A mission approach for a pro-growth, pro-business transition’

Early on in the Review authors hone in on ten priority missions that will help to ‘harness public and private action out to 2035’. Among them are:

  • A focus on local government: Referenced as ‘Net Zero Big Bang’ the Review recommends ‘reforming’ the relationship between central and local government including ‘unlocking’ the planning system so that local authorities have the tools they need to accelerate their transition to net zero. Later there is also a call for government to support at least ‘one Trailblazer Net Zero City, Local Authority and Community’ who would deliver on net zero by 2030.
  • Circular Economy and Waste: Here the focus is on making the most efficient use of resources and ‘galvanising’ action on recycling and reuse. Later it emphasises the importance of ‘clear, nationwide collection and recycling’ and maintaining track with the Net Zero Strategy’s promise to make funding available so that local authorities can collect a core set of materials, including food waste at ‘no cost to households from all homes in England’ from 2025. It also calls for a dedicated task force to work jointly with industry ‘to identify barriers and enablers and develop sector-specific circular economy business models’ comprised of representatives from government departments including BEIS, Defra, DLUHC, HMT and DIT.
  • Net Zero Nature: Here the emphasis is on ‘embedding nature and habitat restoration’ through transition plans. Something that’s set to be explored in more detail by Sir James Bevan, CEO, The Environment Agency, in his forthcoming ‘Changing Planet’ seminar and has already been highlighted in 2021’s seminal Dasgupta Review, which emphasised the importance of accounting for Nature in economics and decision-making. 

‘SMEs as active participants in net zero’

The important role that SMEs play in helping to deliver on net zero is referenced several times throughout the Review, with an acknowledgement that they face some of the biggest barriers centering on time and cost to making this happen. The Review suggests the following focus areas to try to remedy the above.

  • Impacting SMEs via policies aimed at larger firms: Any new legislation for larger companies should be sensitive to the needs of their subcontractors further down the value chain.
  • Mentorship: To this end it also suggests the launch, in 2023, of an SME role models programme, that would provide guidance to micro businesses and the self-employed.
  • Better signposting: To government support schemes and platforms which help to accelerate decarbonisation. The Review recommends the launch of a ‘Help to Grow Green’ campaign that would offer information, resources and vouchers for SMEsto plan and invest in the transition by 2024’.
  • Making tax incentives work for SMEs: Responses to the Call for Evidence emphasised the need for a suite of tax incentives for SMEs to support them on the journey to net zero, including relief on R&D. Later it talks of the need for a ‘tax policy to incentivise growth and decarbonisation’ that would include a balance of incentives and disincentives, and presumably would be wide enough to encompass businesses at all levels.
  • Expecting and embracing failure: While this isn’t aimed directly at SMEs and business in general, it will certainly speak to them. Later it argues that as net-zero programmes are some of the most difficult to deliver against,‘failure, particularly in R&D, should not be stigmatised’. Instead it argues that failure ‘should be embraced as a necessary part of the process and an opportunity to learn lessons that will bring new opportunities in the future’.

‘People are vital to delivering net zero’

“It is for the whole of society that net zero needs to work, and for this reason the Review has taken a whole of society approach to our evidence gathering,” Chris Skidmore MP.

Interestingly the largest proportion (65%) of responses to the Call for Evidence came from individuals, and behavioural change at a consumer level is positioned as one the key catalysts to moving the net-zero economy forward.

The report acknowledges, citing research, that consumers are already voting with their feet by increasingly investing in eco-friendly products, in electric vehicles, heat pumps and more. However, it argues that key issues must be overcome in order for the public to fully realise the benefits of a green economy, which include improvements to health and wellbeing and a potential levelling up effect on the UK jobs market, as green careers tap into skill sets from across several UK regions. These are:

Agency: ‘People need to be empowered to make the changes they wish to, engaged on the challenges, and armed with the information they need’.

Affordability: ‘Low carbon products must be affordable’.

Accessibility: ‘The necessary skills, services, and infrastructure must be accessible’. 

Emissions: The importance of robust benchmarking

The Review noted that a number of businesses highlighted that a lack of emissions data from supply chains made it challenging for them to accurately report on their overall emissions and reduce them. In order to tackle this gulf, the Review suggests, among other recommendations:

  • The introduction of government-backed value-chain forums: These would support ‘collaboration and cooperation across value chains’ to measure emissions.
  • A new Scope 3 emissions target: The Review asks that the government work towards a target to have 50% of UK-based food and drink businesses measure and report their Scope 3 emissions against a government and industry-agreed standard by 2025.

On measurement and reporting more generally it states that international sustainability reporting standards must be brought in line with their financial reporting equivalents and international standards more broadly, in order to ‘create a level-playing field and a reliable information set for investment decisions’. The Review also calls for the government to consider the introduction of a Net Zero Charter Mark, which would:

  • Recognise businesses that were “best in class” in terms of their role in the transition. This would include being ‘compliant with or ahead of key standards’ in relation to: publishing climate-related financial disclosures and/or publishing a transition plan with key milestones and progressing against those, and using ‘reliable metrics and data – such as science-based targets – to ensure any disclosure is of high quality’.

Powering net zero: There is much to do to stabilise the market 

The Review explores many aspects of the current and future energy market in detail, which are too extensive to summarise here. However, there is repeated emphasis on stabilising key energy markets and energy investments in order to facilitate the transition to net zero. This includes a call for government to:

  • Deliver the Review of Electricity Market Arrangements (REMA) as a priority: This is spearheaded by BEIS and a consultation on REMA closed in October 2022. The Review argues that this will help to ‘scale up electricity sector investment, unlock the benefits of renewables, reward flexibility and maintain security of supply’. 
  • Accelerate the implementation of the British Energy Security Strategy: Created in the light of the global energy crisis, this focuses on ‘boosting and diversifying home grown energy sources’. This includes investment in offshore wind, the growth of low-carbon hydrogen, a shift towards zero-emissions vehicles and an acceleration of green transport.
  • Broaden Ofgem’s remit: The energy regulator is most often associated with domestic energy and energy suppliers, but of course its remit is larger than this. The Review calls for Ofgem to be finally mandated as The Future Systems Operator (FSO) as part of the British Energy Security Strategy. The FSO would have both the ‘remit and expertise’ to deliver on ‘energy ambitions, whether on net zero, energy independence, or cost of living’.

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