The world has no room for failure

The UK must lead the world by example to avert the catastrophic global impact of climate change, said Tony Danker opening the conference. 

To coincide with the event, the CBI has published a list of urgent moves to power up the government's 10-point plan for a green industrial revolution. In his speech, Danker argued it was time to "fill in the blanks" as rapidly as possible, to give firms the level of detail they need to invest and innovate. 

“With the world soon to be on our doorstep, now is the time for the UK to step up and make the big plays. Taking nothing less than unprecedented, unstoppable action in the next five months to ensure the legacy we sow in Glasgow far outlasts our leadership of COP.” 

Transcript

Good morning and welcome to everyone joining us virtually today.

We meet in the wake of an important G7 conference – where world leaders came together to extend the task of vaccinating the world; and to start the hard yards on tackling climate change.

We’ve now got just under five months to go until the UK hosts COP26. A summit that will be far harder than this weekend and even more critical.

Because we have what remains of this decade to fundamentally reshape the world’s economy, halve carbon emissions and limit the global temperature increase to 1.5 °C.

The scale of this challenge has always been seismic. What UN Climate Change Executive Secretary, Patricia Espinosa calls, ‘the great human challenge of our times’.[1]

The world has no room for failure. The climate crisis is worsening. And currently, we are way off track.

The UK – as COP co-hosts – must achieve in Glasgow, what previous COPs have not. We need to raise global ambitions, and push further, faster and harder than ever before – to make this the boldest year of net-zero action yet.

This means securing stronger, binding commitments, alongside concrete plans, to deliver the goals of the Paris agreement from every country, including the US and China, the earth’s biggest carbon emitters.

It also requires us to establish the foundations to accelerate the green revolution, such as a global approach to carbon markets, sustainable finance, and the shift to clean power.

There can be no standing still. This is the moment.

So, with the world soon to be on our doorstep, what does it mean for the UK to lead on the road to net-zero?

Put simply, the best way to inspire global action on decarbonisation is to lead the charge right here at home. Nothing less than unprecedented, unstoppable action from the UK Government in partnership with us, in UK business – will be enough in the next five months.

It’s in our hands to set the world on an irreversible path to net-zero by 2050. It’s in our gift, to establish the UK’s credentials as a net-zero leader.

What we have

While we have strong political intent. The UK was the first advanced economy to both enshrine our net-zero targets in law. And – more recently, in April – to go beyond what was agreed in Paris, committing to reduce emissions by 78% by 2035.

And we have a global stage – as this weekend’s G7 summit showed. As the Prime Minister highlighted, the G7 generates around 20% of the world’s emissions. And the pledges made by G7 members in Carbis Bay send a powerful signal of the landmark progress that the UK can push for and achieve at COP26.

This includes commitments from the G7 to end government funding for new unabated coal power generation by the close of 2021. And ahead of COP, to set out their long-term strategies to achieve net-zero by 2050 – and, then, do whatever it takes to achieve the 1.5 °C target.

Finally, we have real expertise. Our credentials in emerging green tech and solutions, such as Carbon Capture Usage and Storage and Hydrogen, could help us lead in these and other growing green markets for decades to come.

So, we have all these things. But do we have a plan?

How do we get there?

Last year, the UK Government outlined its aspirations and the route it will set for net-zero in its ‘Ten Point Plan for a Green Industrial Revolution’.

The plan signals the low-carbon technologies and industries that will be crucial to our future net-zero economy; from advancing UK’s strengths in offshore wind, to decarbonising aviation and forging the hydrogen economy.

And it includes ambitious targets for the penetration of these technologies. And, with clear policy goals for businesses to work towards, it is another crucial step on the UK’s decarbonisation journey.

But it answers more of the ‘what’ than the ‘how’. It doesn’t have the level of detail businesses need to realise all this, or that we’ve been promised will come. So, as early as possible in the next few weeks, we need government to publish finally:

First, the UK’s first-ever Heat and Buildings Strategy, setting a course for emission-free buildings.

Second, the Transport Decarbonisation Plan, a world-first, covering every mode of transport.

Third, the Hydrogen Strategy, to achieve the UK’s target of 5GW of low-carbon hydrogen by 2030.

And fourth, HM Treasury’s Net Zero Review, that will inform the UK’s transition to net-zero by 2050.

But – this fuller strategic map is necessary but not sufficient to get delivery underway. Because much of the delivery falls – as usual – to business. Well, we are ready to go. But we need more than architect’s sketches. We need proper blueprints.

So, today, the CBI is publishing its ten-point response to the UK Government’s ten-point plan.

Working with hundreds of companies at the forefront of this endeavour, we’ve identified the most critical policy moves that need to be made next – filling in the blanks of the government’s outline – to take us from climate ambition to climate action as rapidly as possible.

In return, businesses must get to it – decarbonising their products and services, wider operations and supply chains to make the shift to net-zero irreversible.

Closing the gaps

Let me focus on just three of the most pressing priority areas here.

First, green buildings. The government aims to achieve over 600,000 heat pump installations a year by 2028. But we still don’t have the fiscal, regulatory or delivery frameworks in place to meet this target.

So, business is calling for a new National Delivery Body to help coordinate the mammoth task of retrofitting almost one million UK homes every year to 2050 and see it through.

So, government should legislate that all new boilers installed after 2025 must be ‘hydrogen ready’.

And, following the removal of the Green Homes Grant, provide long-term, easy-to-access financial support for homeowners and landlords to make their properties energy efficient.

Second, unlocking UK investment and growth in green tech.

The government wants to develop 5GW of hydrogen production capacity; four clusters focused on Carbon Capture Usage and Storage; and 40GW of offshore wind by 2030.

For that to happen, it must announce the timeframe for the next leasing round for offshore wind in UK waters. And confirm the business models it intends to employ to encourage businesses to invest in, and boost, UK hydrogen production and CCUS.

And third – decarbonising transport.

As the sales of electric cars, vans and buses rise year on year, we need to ensure that the UK can keep up in this fast, growing global market.

This includes speeding up the rollout of our charging infrastructure, with the publication of a new electric vehicle delivery plan by the end of the year. And funding the development of UK giga factories. We believe around seven more are needed to strengthen our foothold in global electric vehicle and battery supply chains.

Every one of these moves will galvanise not only the UK’s transition to net-zero, but also establish UK competitive leadership in what is likely to be the greatest growth opportunity in global business, for decades to come.

The prize: a decarbonised economy

This we know. Because at the CBI, we’ve spent the last six months analysing emerging economic trends – like the world’s shift to net-zero – to inform our new economic strategy for the UK.

It’s called Seize the Moment: How can business transform the UK economy?

We spoke to hundreds of businesses of every sector, size, and region. As well as politicians, think tanks, metro mayors, unions, health experts.

What we found was incredibly exciting. With opportunities for every business, and benefits that could make a material difference to all people’s lives in the UK over the next ten years.

For example, in exporting. With all this investment at the green frontier, we can develop new IP, new products and services and attract new customers all over the world.

Just looking at the neighbouring EU market alone, the UK could increase its market share to capture:

£1bn more from carbon capture, usage and storage. £3 billion more in offshore-wind goods and services. £8 billion more in hydrogen electrolyser production. And £18 billion more for electric vehicles and vehicle batteries.

We can also leverage the shift to net-zero to use our resources more efficiently and help businesses grow here at home. In fact, we estimate that the UK’s transition could create at least 240,000 net new jobs, over the decade. With many coming from the demand to retrofit homes – upgrading insulation and heating – and generated by SMEs.

And these jobs aren’t just in London, or the South. But in every part of the UK. Actually, a key part of helping us ‘level up’ will be ambitious plans for new zero-carbon industrial clusters across the country.

From South Wales to North-East Scotland, these clusters could protect and generate jobs, investment and opportunities across their supply chains and surrounding communities.[2]

At the same time, the UK’s reputation as a global centre for sustainable finance could help establish us as the world’s number one decarbonisation enabler. People sometimes ask me whether the City of London’s best days are behind it – I say we’re only getting started.

We can build on our expertise and credibility - boosting our issues of green bonds; reinforcing our expertise in carbon offset trading; and helping to craft international financial regulation and standards. These will make sure every decade from now is more sustainable that the last.

UK business leading world…

So why should Government have the confidence to commit to these more detailed plans? Will they work?

Yes. Because firms in the UK are already leading the way globally and they really do stand ready to go further.

This includes Aviva blazing a trail in the global insurance industry, as the first major insurer working to become a net-zero carbon emissions company by 2040.

Renewable energy giant, Siemens Gamesa – which of the near 1,500 blades made at its plant in Hull so far, has exported over 170 blades to Belgium for the SeaMade Offshore Wind Farm in the North Sea. And has more than 200 blades to be sent to projects in Germany and Denmark in the future.

Barclays has set itself a target to provide at least £100bn of green finance by 2030 – in an effort to help to engage their clients on the transition to a low-carbon economy.

And both Diageo and Heineken are collaborating with Glass Futures to cut the carbon from their bottles exported all over the world.

But it isn’t just well-known names making waves.

Newcastle business, Twinview specialises in digital applications and services to improve the energy-efficiency of the built environment.

With stretching net-zero targets of their own, launched back in February 2020 – just before the shock of the pandemic first hit.

Yet despite this, the team has gone on to achieve incredible success, establishing partnerships across the world, including in Australia, the Nordics and Vietnam.

There’s also Ecometrica – who since their creation in 2008, has become one of the world’s top sustainability brands. Combining their expertise in environmental and sustainability accounting, with award-winning software and data services to support businesses and governments in sustainability planning, operations and reporting.

Need to go faster, further, harder

Just some of the many great examples. But, of course, the reality is: We still have miles to go and work to do for every business to get to where we need to be.

So, my ask – today - is simple:

If you haven’t already, please sign up to the UN’s ‘Race to Zero’ campaign today and commit to becoming a net-zero business by 2050.

Here’s how. As a larger business, you can join firms as diverse as Buro Happold, Burberry and Branston Ltd, in pursuing science-based targets to meet the goals of the Paris Agreement – through initiatives like ‘Business Ambition for 1.5°’.

Or if you’re smaller, by becoming part of the SME Climate Hub. Where you can access tools and resources to develop your net-zero plans, as well as measure and reduce emissions.

Climate change is the only race in the world where the Race to Zero - is a Race to the Top. In only these past few years, decarbonisation has moved from being a threat; to being a risk to be managed; to being a PR imperative; and to now being a genuine source of business value with first-mover advantage.

It’s why the market capitalisation of clean-energy leaders, Enel and Ørsted has surpassed that of its peers. While over the last ten years, close to six out of ten sustainable funds have outperformed non-ESG funds.

Unilever’s purpose-led Sustainable Living Brands are growing 69% faster than the rest of the business and delivering around 75% of the company’s growth.

And online marketplace, Etsy – which has moved to offset 100% of its carbon emissions from delivery and packaging – doubled revenues last year.

Well, the CBI is of course also here to help you every step of the way, including through initiatives like our Goal 13 platform. Where you will find practical examples of steps firms like yours are taking to transition to a low-carbon future.

It’s searchable by sector or initiative; outlining what companies are committing to; the changes they’re making to pursue their targets; and the impact on both emissions and financial performance.

But, if you still think that the shift to net-zero is too big a step to take right now, talk to us. We will help you design the path forward.

And if you think that you’re already a leading net-zero business: think about where you can inspire wider action – throughout your industry, your supply chain, your customer base and your local community.

Conclusion

Over the next two days, whatever your size, sector or the scale of your net-zero successes so far; we’ve got experts, ideas and tools to help you go further.

Covering everything from the inside track of the government’s preparations for COP26 and reflections on this weekend’s G7 - to the power of technology to achieve clean growth, and the UK’s potential to lead as a low-carbon hub. As well as the ins and outs of setting and delivering on your net-zero targets.

At the end of these two days, we want you to feel invigorated, equipped and ready to go all in on your net-zero journey.

The road to COP starts now. This is the UK’s chance.

Together, we can build a legacy – founded on good, green jobs, sustainable growth, and a more resilient, competitive net-zero future for every UK business and community – for generations to come.

This is the world’s moment. This is the UK’s moment. This is our moment. We must seize it.

Thank you.

[1] https://unfccc.int/news/g7-ministerial-can-pave-way-for-success-at-cop26