Bryt Insight June 2021

In recent weeks, the Government has announced a number of new initiatives designed to prompt more businesses to adopt net zero goals, including a new Business Climate Hub and changes to the way major public procurement contracts are awarded. We’ve also seen the publication of the Committee for Climate Change’s new climate risk assessment report, which emphasises the risk of climate change to businesses, and realised the true value of flexibility thanks to new research from the Carbon Trust.

 

If one thing’s for certain, a combined and united effort towards decarbonisation is a must. Here’s what you need to know...

 

1. UK businesses at risk due to climate dangers 

2. Prime Minister calls for SMEs to set net zero goals

3. Research reveals flexibility could cut net zero costs by £16.7bn a year

4. Businesses will need net zero targets to win government contracts

 

1. UK businesses at risk due to climate dangers

A new report from the Climate Change Committee (CCC) has highlighted the risks to UK businesses and individuals due to the climate crisis. The CCC has stated that the Government’s actions to improve the UK’s resilience to climate risks are not keeping pace with the impacts of climate change, which are already causing harm.

 

In their risk assessment report, the CCC considered 53 risks that could occur if the earth’s temperature rises by 2°C-4°C in the future, and found that the Government had only taken sufficient action to protect UK citizens and businesses against four of these risks. The UK is already experiencing climate change, as the average land temperature is now around 1.2°C higher than pre-industrial levels. The report also recognises that some of the climate risks we’re already seeing (such as higher sea levels) could be irreversible.

 

However, many of the risks considered in the report can be mitigated if we put a ‘detailed, effective action plan’ in place as a matter of urgency. When it comes to businesses, the CCC’s report emphasised that more action is needed in a number of areas, including reducing the risk of flooding to business sites and the risk of disruption to supply chains or distribution networks. They also outlined the negative impacts that higher temperatures could have on employees’ health and wellbeing, as well as their ability to commute to work, which could have a serious effect on business productivity.

 

While many of the risks the CCC considered will require serious and urgent action from the Government, we all have a part to play in reducing climate risk.

 

 

2. Prime Minister calls for SMEs to set net zero goals

Boris Johnson has urged the millions of small and medium businesses across the UK to lead the way on climate action by pledging to cut their emissions by half by 2030 and to be net zero by 2050 or sooner. With SMEs accounting for around 99% of UK businesses, it’s vital that small and microbusinesses play their part in achieving the UK’s net zero goal. 

 

However, recent research by Lloyds Banking Group has revealed that although nine in 10 SMEs see environmental sustainability as an important issue for their business and sector, one-quarter of smaller businesses are unaware of the UK’s net zero target. In fact, four in 10 SMEs don’t know what net zero would mean for their business, and many were unaware of the benefits of decarbonisation.

 

It’s clear that SMEs need more guidance around net zero, which is why BEIS launched the Together for our Planet ‘Business Climate Leaders’ campaign. SMEs will be able to use the new UK Business Climate Hub to find practical tools, resources and advice to help them to understand their carbon footprint and make a plan for reducing it. Some of the UK’s biggest businesses, including NatWest, Google and BT, will also be holding events and leading training programmes to support SMEs that make net zero pledges.

 

Net zero might sound like an ambitious target, but once your business has a goal in place it’s simply a case of taking small steps towards achieving it. To access support for your sustainability goals, visit the Business Climate Hub here.

 

 

3. Research reveals flexibility could cut net zero costs by £16.7bn a year

New research led by the Carbon Trust - and supported by a cross-sector group that we were proud to be a part of - has shown that embedding greater flexibility across the UK’s energy system could significantly reduce the cost of achieving net zero for customers.

 

Balancing the grid is becoming increasingly complex. Electricity demand is set to treble from 2019 levels by 2050, due to the electrification of heating and transportation, and intermittent renewable generation is accounting for a growing proportion of our supply. Our existing electricity network will need to be substantially upgraded in order to ensure supply can meet demand - but the extent of the upgrades required could be reduced if businesses and individuals can have more flexibility in their energy use.

 

If consumers can synchronise their consumption with renewable generators, for example, then the easier it will be to support an energy system powered on renewables alone. And by shifting their consumption away from peak periods, consumers can also help to reduce the anticipated increase in stress on networks from electric heat and transportation. Ultimately, the Carbon Trust estimates that a fully flexible energy system could save consumers up to £16.7bn per year by 2050, and help to minimise the need for expensive network infrastructure upgrades.

 

They state that commercial users will need to provide around 11GW of flexible demand by 2050, which means businesses like yours will have a key role to play in securing an efficient, affordable and reliable renewable future. We’re therefore encouraging all businesses to explore how they can optimise their energy use and deploy flexibility - because in doing so, you can secure some real benefits for your business as well as our electricity system. Find out more about the benefits of flexibility in Carbon Trust’s recent blog.

 

 

 

4. Businesses will need net zero targets to win government contracts

On World Environment Day, the Government announced a new requirement for businesses to commit to the UK’s 2050 net zero target before they can bid for major government contracts. They will also be required to publish ‘credible’ carbon reduction plans on their website, and specify each of their carbon reduction schemes in their tender.

 

These new rules will apply to all Government contracts worth more than £5m from September 2021, and any firms that fail to comply with these measures will be prohibited from bidding on these contracts. As the government spends over £290 billion a year on procurement, it’s expected that this announcement will encourage hundreds of businesses to publish a net zero target and put a plan in place for achieving it.

 

Some businesses were already required to report on their Scope 1 emissions - direct emissions from owned or controlled sources - and Scope 2 emissions - any indirect emissions from the generation of purchased electricity, steam or heating. However, all businesses bidding for major contracts will now need to outline their existing carbon footprint, including their Scope 3 emissions, which are the indirect emissions created throughout their value chain.

 

Whether your organisation supplies the Government or not, it’s wise to ensure you’re actively working to reduce your Scope 1, 2 and 3 emissions, as more businesses are seeking to lower emissions throughout their supply chain. Switching to Bryt Energy’s zero carbon, 100% renewable energy is a great way to minimise your Scope 2 emissions - to find out more, click here.

 

Talk to our team  

If you have any questions about the changes discussed above or how they might affect your business, our team of experts is on hand to answer them. Simply call us on 0121 726 7575 or email us at solutions@brytenergy.co.uk.

 

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