The government’s green recovery: What’s in it for you?
COVID-19 has been at the forefront of everyone’s minds, so it is unsurprising that making eco-friendly changes has not been at the top of the to-do list. Yet, the climate emergency has not gone away and will not go away unless action is taken now. We now have a roadmap to address and recover from the pandemic, but there is still much to do to mitigate the implications of climate change.
Why is the government placing such a focus on the environment? They know the impact that global warming will have on society and the economy. The effects of the pandemic have been tragic and climate change, if left unaddressed, will be much worse. Storm damage, flood damage, and other destruction due to freak weather coupled with lack of resources due to the impact on biodiversity all lead to increased financial cost to correct and a negative impact on the general public and industry.
As the UK aims to be net-zero by 2050, there has been an emergence of numerous environmental legislation, policies, and plans to avoid these kinds of implications. Take the Climate Change Act, Environmental Protection Act, and the declaration of a climate emergency - all of these are enshrined in law. The government recognises the cost of putting environmental damage right now, will be dwarfed by the potential cost of not doing it. The response to COVID-19 is no different, with recovery efforts centered on a ‘green recovery’. It is expected that such measures will focus on a larger uptake of renewable energy, electric vehicles, nuclear power, and nature restoration. However, adopting such measures and practices shouldn’t be something which you do just because you have to: sustainability should be the natural response, which is why we have produced an outline as to the wider benefits these measures can have for businesses and organisations of all sectors.
So, what’s in it for you?
Gone are the days where organisations had to choose between being sustainable or profitable. A recent study has that there is a positive correlation between the effectiveness of an organisation’s sustainability practices and its stock price. The more sustainable you are, the more economically stable your business is. Making the transition to more sustainable practices has become more accessible through Green Finance schemes and the Green Finance Institute. Put briefly, this is a collaboration between the Government and finance industry, to encourage organisations to ‘go green’ through the provision of funding. There are many investment options to help gather the funding required to make sustainable changes - our guide explains all of them in simple terms. It’s important to note here that ‘funding’ doesn’t indicate debt, either. Increased revenue in the future, thanks to eco changes and smart economic modeling, means that investors can easily be paid back.
Above image credit: green finance institute
The initial costs of the transition towards more sustainable practices or low-carbon projects can be further offset by the long-term profits which they can create. Under the smart export tariffs scheme, organisations that generate renewable energy can sell their surplus back to the grid for a reasonable price. Not only does this benefit you, but it can have positive repercussions for wider society as overall energy prices can reduce since cheaper, locally sourced power is being used. This investment in renewable sources of energy can also create a favorable impression amongst existing and potential investors. The EY Global Institutional Survey found that investors are using nonfinancial disclosures, like an organisation’s environmental stance, to guide their investment decisions. Therefore, not only can the investment in sustainable practices increase your profitability, but it can also work to sustain your profitability through creating long-term partnerships.
An organisation’s longevity can also be extended through implementing more sustainable measures as it can improve its competitiveness. There is no doubt that the younger generation is becoming more influential as both consumers and employees, so organisations can expect their stance on environmental issues to have more power in decision making. This generation has been brought up in a world where for the first time, environmental issues have been in the mainstream. Therefore, they will be more conscious of the environmental impact in which the organisation they engage with is having. To retain these future consumers and employees, it is important that you start to make the transition to sustainable practices to build your resilience in the face of a generation that will soon become economic drivers.
Aside from the business-orientated benefits of ‘going green’, ultimately, an environmental investment is about the merit to society as a whole. Look at it this way - a group of organisations deciding to become more sustainable could be the determining factor in reducing emissions and preventing extreme weather events. That then stabilises harvests and the overall food supply. We all play a part in protecting the environment. Whilst we have provided an outline as to how sustainable investments can benefit you as an organisation, it is also important to note that your efforts fit in with the wider ‘fight’ against climate change.
After all, climate change requires a collective effort.