This post is by Sam Alvis, head of Green Renewal at Green Alliance. This article was originally published on Business Green
As watchers of The Queen’s Gambit will know, every slide of a pawn in chess affects your ability to win hundreds of turns down the line. Even in the heat of the game, players must be thinking about their long term strategy. And so it is for business in the current crisis. Many are in the grips of working out how to survive, but they also know that the decisions they and the government take today will shape how successful they will be for years to come.
That’s why companies, the public and NGOs have been so vocal about the importance of putting the environment and climate at the heart of the crisis response and our economic recovery. Private enterprise is a vital part of the solution to huge challenges, whether that is the Covid-19 recession, loss of biodiversity or climate disruption. Business can help government think beyond its next move in the health crisis, and towards its strategy to win against these challenges.
What is needed to make green options the default?
Companies were clear in the heat of the crisis about the need for government support in addressing short term liquidity risks. Now CEOs need to bring the same level of clarity and urgency to the need to address longer term risks from climate and environmental deterioration. The government can help, but only when it knows exactly what business needs are. Is it better regulation, accreditation of environmental projects or incentives that are required to make green decisions the default?
How can business advocate for a shift from solely recovery to a renewal that brings economic growth, especially to the regions, and progress towards our net zero target and natural environment restoration? Priorities will be to work with government on the investment and rules that shape market signals and then make green renewal tangible for policy makers and the public.
First, on investment. Business not only finances public infrastructure but relies on existing public goods to deliver its purpose. Partnership is crucial to make sure joint infrastructure investments solve rather than compound economic challenges. Natural flood defence schemes or prioritising low carbon public transport over roads will not just give improved rates of return over traditional investments but will also mitigate against companies’ financial risks in the long run from climate disruption. The OECD argues that clean infrastructure is better at leveraging private finance than grey infrastructure. Rather than just NGOs highlighting the £24bn shortfall in green infrastructure, investors can help to communicate exactly how much additional private money that public investment would generate. Similarly, investors should be clear that new infrastructure will have to meet climate and environmental goals to be good for the long term. Many green projects are jobs rich, ready now, and could also lead to a £50bn gain for business through growth in exports or by cutting future costs.
Second, even amidst yet another government ‘red tape’ review, businesses have a strong incentive to push for strong regulatory signals that facilitate their investment. The phase out of new sales of combustion engines by 2030 is one example. The government is now actively shaping the kind of sustainable market in private transport it wants to see, helping business prepare for the change. Business will be better served if similar pressures are applied around building zero carbon homes for instance. Directors will struggle to plan based on targets alone. We’re waiting for a myriad of environment and climate related strategies from different ministries. These long term strategies are vital to clarify the relative roles of private and public in achieving statutory targets like net zero. For a smoother, green transition, businesses affected by multiple strategies can help ensure ministries talk to each other. Retailers, for example, will need complementary not competing signals from the food strategy, transport decarbonisation plan and any future farm bill.
Businesses can help to make a green vision real for people
Finally, businesses can help to make the green recovery more tangible to both the government and the public. Whilst we know that clean infrastructure or nature-based solutions to climate change will generate more jobs, the language around it is often abstract: what exactly is a green job, where will they be, who will fill them? If businesses can provide clear sight of new projects and the roles needed, it will start to feel real, and give a focus for local or central government support, like the targeting of skills development and retraining programmes.
Green policies were around long before the pandemic, but its impact has brought the need for a sustainable future into sharper focus. As initiatives like the Prince of Wales’ Terra Carta, the Aldersgate group of leaders for a sustainable economy or Green Alliance’s own Business Circle show, there are many progressive companies already taking a lead. Like chess, this is a long game but, unlike Beth Harmon, the players must not hide their game plans. Businesses, government and NGOs need to be visionary, open and collaborative to make sure recovery also means a long term, green renewal for the country.