In the final piece in our series commenting on Manchester’s aims to achieve net zero by 2038, we look to the future and offer our predictions as to some of the key environmental issues for businesses going forwards.

Manchester’s objectives – and the UK as a whole – are clear, as are the opportunities for businesses to cooperate and participate in achieving net zero. As we have highlighted in our previous blogs, businesses can no longer shy away from their environmental impact, and must integrate ‘green’ issues and how they consider them in their day-to-day operations.

But what does this mean in practice?

Whilst environmental impact is not a new concern for businesses, unlike in the past, in the next few years the promotion of environmental objectives will be placed onto at least an equal footing and importance as other daily business concerns.

Appreciation of environmental impact

As we have highlighted in previous blogs in this series, there are many ways in which businesses can help contribute to Manchester’s goals.

All of these measures however require businesses to evaluate their environmental footprint, and then to take measures to address specific issues arising. For example, we have previously touched upon cycle to work schemes and onsite EV charging. Whilst not necessarily applicable to every business, these are perhaps obvious areas for businesses to consider if they can reduce their carbon impact.

Likewise, our blog series has also commented on the potential to retrofit the built environment. There are a number of potentially ‘easy wins’ in this regard, in terms of upgrading insulation and heating systems, but there are cost consequences.

We recommend that businesses take the time now to consider all aspects of their operations, and assess where and how measures can be taken to contribute to the net zero aims. It would be advantageous for businesses to undertake this task now, before they are compelled to do so, in order to best position themselves going forwards in light of expected growth in this area.

Lengthier due diligence exercises

As environmental awareness increases, and local and national drives to achieve net zero pick up pace, we anticipate that this will be reflected in more protracted and complicated due diligence exercises.

We have touched upon some of the relevant concerns within this series, but the net result will require businesses to consider additional matters when considering purchases and acquisitions. For example, where new build commercial properties are constructed with the benefit of on-site energy generation, issues of licensing, regulatory requirements and health and safety will need be incorporated into enquiries. The consequence of considering such additional matters will be to increase the cost of, and time required to complete, legal due diligence.

Cultural change

It is accepted that net zero cannot be achieved overnight, and will require a concerted and consistent approach across all sectors. That being said, change needs to start somewhere and may for many businesses require a cultural change and significant revision to their current operating procedures.

Such changes can only flow from the top of an organisation, and the active promotion and furtherance of environmental aims cannot be seen or treated as a simple tick-box exercise. The achievement of net zero will require a new mindset and a genuine prioritisation of the objectives to be achieved.

Solid foundation for environmental claims

In contributing to the region’s net zero aims, businesses may want to promote their own environmental credentials – either by way of encouragement of others, or to promote the steps they are taking. However, organisations must remain mindful that any ‘green’ claims they publish about themselves must be accurate and not misleading. Recent years have seen an almost overnight increase in the number of ‘greenwashing’ claims, and the Competition and Markets Authority is actively investigating claims of sustainability.

In order to avoid falling foul of these novel causes of action and litigation, businesses need to be conscious of the way in which they publicise their net zero actions and, where necessary, have in the background clear data to demonstrate the validity of their claims – for example, in terms of their environmental sustainability or net zero achievements.

Increasing importance of ESG scores

Environmental, social and governance scores have existed for many years, although historically they have been used by financial institutions to benchmark their performance against competitors and assess likelihood of default by a business.

The last few years has seen a rapid increase in their prevalence, across all sectors, and we predict that they will only play an ever more central role over the coming years. Not only does the EU Corporate Sustainability Reporting Directive serve to mandate the inclusion of ESG scores within companies’ annual reporting processes, but this information will also likely play an increasingly seismic role in M&A deals, and is already being seen as a key influencer in investment decisions:. Investors will require clear and unambiguous confirmation that their investments have verifiable ‘green’ credentials.

Carbon accountability

Han-in-hand with the increase in ESG scores, we anticipate that the next few years will see an increasing awareness, and benchmarking, of carbon accountability. Manchester has already provided information as to how much carbon its net zero measures have saved, and we consider it is only a matter of time before similar information is volunteered by other sectors.

To date, these scores have mainly been used by aviation companies to provide information as to the carbon impact of individual flights, but we anticipate their spread into construction, hospitality and retail.

As worldwide efforts to achieve net zero increase, and consumers become more alive to their own environmental impact, carbon scores will likely become increasingly omnipresent and a key driver of consumer behaviour. It may be the case that carbon limits are in time placed on businesses, and potentially individuals, as further drivers of change. For example, similar initiatives have been introduced by some banks which have already started to offer card accounts with an in-built carbon tracker.

In time, it may be the case that retail goods, and other purchases, are provided with an individual ESG/ carbon accountability score in much the same way that energy efficiency ratings currently attach to white goods.  We therefore recommend again that business look now at where their main carbon spend is occurring, and what measures may be available to address and reduce this.

War on plastic

Although our series has not focussed on the war on plastic, Manchester’s actions towards net zero are taking place against the national background of this issue. The government has stated its desire to avoid all avoidable waste by 2042, and recent years have seen the prohibition on sales of certain items, such as single-use plastic cutlery, and the introduction of the plastic bag charge.

Businesses are not immune to these measures and have been equally affected by the Plastic Packaging Tax and extended producer responsibilities, both of which serve to impose waste management cost obligations on businesses for the packaging they generate and handle.  Whilst the purpose of these regulations is to encourage and incentivise durability, repairability and recycling, and move away from disposal as the default option at a product’s end of life, the additional costs generated are almost certainly going to be passed on throughout the supply chain.

As part of the suggested internal review and assessment identified at the start of this piece, businesses need to start considering now whether any of their produced items can be redesigned using environmentally friendly components, or re-packaged in a way that supports environmental targets.

What does the future hold?

Absent of a crystal ball, no one can predict with certainty what tomorrow may bring, but so far as the achievement of net zero and climate action are concerned, the route is clear: preservation of the environment is to be promoted.

We suggested at the outset that businesses may want to consider now (before they are obliged to do so) what their environmental footprint is and how they may be able to reduce this so as to contribute not only to their immediate community, but also the wider objectives stated by Manchester and central government.

Whilst this will almost certainly result in immediate costs being incurred, these perhaps pale into insignificance given the greater good to be achieved.

Photo: Sakorn Sukkasemsakorn

In the third of our series of blogs commenting on Greater Manchester Combined Authority’s intention to become net zero, we look this week at efforts being made to help influence and ‘nudge’ behaviour towards achieving the objectives.

Whilst any form of encouragement or guidance seeking to unilaterally change an individual’s behaviour could be interpreted as having somewhat sinister overtones, the Council is eager to be seen as leading by example and has already modified its own operations in this regard.  

For example, Greater Manchester has appointed a number of Neighbourhood Climate Change Offices, to help empower communities to take local-level action and to help build climate resilience, including encouraging cycle to work schemes, turning down heating, and turning off electrical appliances when not in use. 

Can behavioural change impact net zero?

Changes in behaviour and pervading culture will not come overnight but, equally, they have to start somewhere. Greater Manchester is not alone in seeking to achieve net zero, with central government also having made a similar commitment to achieve 100% reduction of greenhouse gas emissions by 2050, compared with 1990 levels. 

However, responsibility does not rest solely with government and as the Climate Change Committee’s 2021 progress report to Parliament suggested, public engagement – and individual actions – are key enablers for achieving net zero, with the actions taken by consumer, workers, households and businesses being central to achieving the net zero objectives. 

That report went further and suggested that behavioural change can play a role in almost two-thirds of emission reductions, through adoption of low-carbon technologies, such as electric vehicles and increased use of green public transport.

How is behavioural change to be achieved?

In its net zero strategy, published in October 2021, central government stated that public engagement plays a significant role in driving green choices. At that time the government set out its approach to support green choices, which was underpinned by six core principles. Whilst these were developed primarily with the public in mind, it is accepted that they may apply equally to businesses. The six principles are: 

1. minimise the ‘ask’ by sending clear regulatory signals;
2. make the green choice the easiest;
3. make the green choice affordable;
4. empower people and businesses to make their own choice;
5. motivate and build public acceptability for major changes; and
6. present a clear vision of how we will get to net zero and what the role of people and business will be.

As the Energy Minister, Greg Hands MP, accepted to the House of Lords Environment and Climate Change Committee, it is not the business of government to force behavioural change on individuals, but rather it is the government’s role to, “encourage, incentivise and enable,” moves towards the objectives to be achieved.

In other words, far from imposing unilaterally mandated changes on individuals, what the government seeks to encourage is that individuals take ownership of their own environmental impact, and in turn contribute to local, national and global objectives.

A government survey has found that 85% of people are either concerned or very concerned about climate change and willing to do something about it in their own lives. However, any such actions must be affordable, accessible and achievable without any significant detriment to the individual. Any measures implemented must also be equitable for all. 

For example, a report published by the Cambridge Sustainability Commission in April 2021 evidenced that between 1990 and 2015, nearly half of the growth in global emissions was due to the richest 10%, with the wealthiest 5% alone contributing over a third. That report suggested that policymakers target the ‘polluter elite’ to make changes to their lifestyles, such as imposing levies on high emissions technologies and long-haul flights.

By contrast, one universally-accessible solution introduced by Greater Manchester is the introduction of 50 zero emission buses as part of the authority-controlled ‘bee network,’ with an additional 50 vehicles being delivered in March 2024. An additional 250 vehicles are expected to be delivered over the next three years.  It is estimated that the adoption of zero emission buses will reduce carbon emissions by 1.1 million tonnes.  This is a resource which is available equally to all, yet which is likely to serve to help shape behaviour by encouraging use of green public transport.

What we expect to see over the coming years, following on from government-led schemes and enabling legislation, is an increasing awareness by consumers as to the environmental impact their actions and the products they buy may have. This in turn is likely to result in further behavioural changes, including the gradual transition towards a circular economy and continued war on plastic.

Conclusion

George Eustice MP, when Secretary of State for the Environment, stated that:

Behaviour change is quite integral to many parts of government policy, but to tackle these complex environmental challenges is a shared endeavour. We all have a shared responsibility, and many of the policies we have are partly about government having a role in regulation to make certain choices easier, so that the public can make the changes we want them to make to get better environmental outcomes.

Although at first blush one may view the idea of subtle influences to behaviour and nudging as slightly sinister acts by those in positions of power, the objectives to be achieved are broadly to be welcomed, and it is clear that local actions by individuals will cumulatively bring about significant changes. 

That being said, questions do remain as to by whom, and on what basis, those individual objectives are to be determined, as well as the global (as opposed to local) impact actions will actually have, especially if other countries and agencies are not pursuing identical goals. For individual behavioural changes to have a meaningful impact, there does need to be a unified approach, which may be difficult to achieve.

Those concerns aside, the takeaway message is clear and there are low-cost steps that everyone can take on a daily basis to act in a less wasteful, and more environmentally-friendly, manner.  

Next week we will look at the built environment and how real estate initiatives may be able to help contribute to Manchester’s net zero aims.

Photo credit: cagkansayin

Over the coming weeks, we will take a closer look at Manchester’s concerted aim to become net zero. We will cover each area of the city’s focus and look at how businesses can play their part in achieving ambitious sustainability targets.

Let’s start at the beginning. Greater Manchester has long been at the forefront of urban decarbonization, and its drive towards net zero continues at pace. The city launched its first plan for collective climate action in 2009, which in turn led to the establishment of the Manchester Climate Change Agency and Partnership.

The measures have had a positive impact and the city was able to achieve a demonstrable reduction of 54% in its carb emissions between 2010 and 2020.

However, the city is not one to rest on its laurels and considered that further reductions were possible, especially in light of national and global aims relating to climate change. Notwithstanding its own significant achievements, Manchester declared a climate emergency in July 2019 and committed itself to halving again its carbon emissions within the next five years.

The city does not operate in isolation and accepts that its own direct carbon emissions make up only around 2% of the city’s total. However, the authority does have power and influence over a range of administrative and infrastructure matters, which it is hoped in turn will themselves contribute to the objectives to be achieved.

What is Manchester doing to achieve net zero?

The city has publicly stated the view that, “everyone has a part to play,” in limiting the effects of climate change and has set out its intentions to achieve net zero carbon in its Strategic Outline Business Plan. The Plan, which is bolstered by bespoke climate action plans for each of the authority’s 32 wards, lists a number of arguments in favour of the move, including establishing the city – and North West as a whole – as a leader in clean energy, which it is hoped in turn will attract private sector investment and help deliver wider social benefits, such as reducing fuel poverty.

The Council has identified 48 actions which can be taken – by itself and the city as a whole – to help focus minds, which can be summarised under the following broad topics:

1. Buildings and energy
2. Transport and travel
3. Reducing consumption-based emissions
4. Carbon storage and sequestration
5. Emissions savings.

What objectives are being pursued?

Taking each category in turn:

1. Buildings and energy

The Manchester urban area, and city centre in particular, is a significant estate and magnet for the use of utilities and energy. It is therefore a prime candidate for savings, in terms of the existing built environment as well as future energy usage. For example, the Council has already stated its commitment to reduce CO2 emissions from its estate and streetlighting by 50% by 2025, and a further 50% by 2030, to be achieved through a programme of retrofitting and local energy generation, including solar farms.

That being said, decarbonisation of the built environment is no easy feat and requires consideration at both the new build and retrofit stages of a building’s life.

In respect of future construction, the Council has produced a Buildings and Energy Strategy for its estate and has produced a Manchester Build Standard for future developments.

The above goes hand-in-hand with the retrofit of existing premises, which includes considerations as broad as the provision of (and energy supply to) heating alternatives, installation of energy-efficient fixtures and fittings, increasing thermal comfort and lowering energy bills.

Going forwards, all developments within the Manchester area will need to be mindful of the city’s drive towards net zero, and will have to incorporate sustainable concepts and energy efficiency into their construction proposals, including energy generation and usage. Not only has the Council declared that it will give additional weighting to environmental credentials in future tenders, but companies themselves are becoming more alive to the importance of ESG scores, which are featuring more prominently in pre-contract discussions.

1. Transport and travel

There is a balance to be struck between improving liveability and ensuring access into the city centre and other areas within the authority’s control through low-cost public transport, and ensuring that such travel and opportunities are provided on solid environmentally friendly credentials.

In connection with its own vehicles, the Council is replacing its fleet with electric vehicles and charging infrastructure, which is estimated will save around 900 tonnes of carbon annually (c.£9.8 million). The move towards electric vehicles is a huge logistical exercise, which will be decades in the transition, but is nonetheless one the Council is eager to pursue.

As laudable as the aim is, there are clear logistical hurdles in the way. For example, not only are there immediate and significant financial costs associated with the decarbonisation of travel, but the technology remains very much in its infancy and at developmental stage. Additionally, were these obstacles to be overcome, there are planning and spatial issues arising in connection with the installation of electric charging points. It remains to be seen what volume of energy generation will be required to realise the objectives, which leads to the question as to how that energy is to be produced in the most cost-effective and environmentally friendly way to allow green travel to remain a viable alternative.

Whilst there is ongoing discussion around the possible use of hydrogen as an alternative fuel source, to date these exchanges have focussed on haulage and logistics as opposed to domestic travel. Despite its relative cleanliness, the use of hydrogen does come with its own significant risk factors.

1. Reducing consumption-based emissions

There are a number of measures being taken, at both local and national level, to reduce consumption-based emissions and those arising from supply chains generally. For example, mirroring measures taken by central government, Manchester has indicated its intention to phase out single-use plastics and other non-recyclable products.

The last few years have seen an increasing behavioural and cultural shift towards the circular economy, and away from the take-make-use mentality. The national government has stated its desire to avoid all avoidable waste by 2042 and although this objective will not be achieved overnight, regulations are already in force working towards this aim, such as the successful introduction of the plastic carrier bag charge in 2015, and the prohibition on sale and supply of plastic straws and single-use cutlery.

In addition, the UK has recently seen the introduction of the Plastic Packaging Tax and Extended Producer Responsibility regulations, both of which serve to impose waste management cost obligations on businesses for the packaging they generate and handle.  Whilst the purpose of these regulations is to encourage and incentivise durability, repairability and recycling, and move away from disposal as the default option at a product’s end of life, the additional costs generated are almost certainly going to be passed on throughout the supply chain.

Businesses need to start considering now whether any of their produced items can be redesigned using environmentally friendly components, or re-packaged in a way that supports environmental targets.

1. Carbon storage and sequestration

Manchester is eager to promote carbon storage solutions, and has introduced a Green and Blue Infrastructure Strategy which includes an intelligence-led approach to tree and hedge planting.

To date, over 7,000 trees have been planted, as well as five community orchards, with the aim of not only increasing the aesthetic attractiveness of the urban area, but also to best position the city ahead if expected future climate changes. 

1. Influencing behaviour

The Council is eager to be seen as leading by example and, in turn, influence the behaviour of others. For example, to date it has embedded zero carbon as a priority into its Service Plans, has appointed three Neighbourhood Climate Change Officers, and has arranged both private and public lobbying of the GM Pension Fund to divest from investment in fossil fuels.

That being said, change will not come overnight and there also needs to be a degree of consensus and agreement as to how and in what way cultural changes are expected to occur. There is already discussion within the UK, as well as other countries, regarding the implementation of ’15 minute cities,’ programmable digital currency and, at its extreme, social credit scores. These are highly overt ways of compelling an expected behaviour, but are likely to meet resistance in the event of their unilateral imposition.

At this stage, the Council encourages individuals to take responsible actions – which can also be replicated across businesses – including:

• Repair and recycling of items, rather than replacement;
• Avoiding the use of single-use plastics;
• Increased use of public transport;
• Installation of energy-efficient utilities; and
• Re-wilding and increasing greenery.

Conclusion

The Combined Authority states that it ‘takes climate change seriously,’ and the objectives it seeks to achieve are to be welcomed. The decarbonisation objectives are not simply to meet Government guidelines, but are also intended to provide a framework for others to follow and to improve the lives of those living and working within Manchester.

However laudable the objectives are – at both a local and national level – they are not without their real and significant obstacles, which do need to be addressed before the aims can be fully realised.  Certainly, the objectives cannot be achieved overnight, in isolation, nor by one city alone. That is not to say that the aims should not be pursued, but they do require a considered and coordinated approach across numerous authorities.

Although many of the details as to the future landscape and specific actions expected of both businesses and individuals remain to be confirmed, the direction of travel is clear.

In the absence of a statutory compulsion to do so, we recommend that businesses undertake an internal review of their systems, production methods and environmental impact as soon as possible, to identify areas where more could perhaps be done. This process will help to position organisations in the most favourable position for further environmental regulations, which are undoubtedly on the horizon, and will also help work towards those collective aims intended to be achieved by the Combined Authority.

In our next blog in the series, we will cover the issue of transport and travel.

Picture: The Tower of Light – Manchester’s low-carbon energy centre (credit: Philip Openshaw)