In the midst of pressures that threaten to take the edge off efforts to tackle climate change challenges, Zen CEO Paul Stobart urges business leaders to ramp up for Net Zero action.
All business people are deeply worried about inflation, particularly the increases in energy costs. The Government is providing welcome relief for households and businesses but in the case of the latter this support is for six months only. Thereafter we have uncertainty. And it’s not just energy costs that are hurting business – inflation is impacting all supply chains everywhere.
As we struggle through this difficult period, some are arguing for the climate change discussion to be put to one side – ‘we should park our net zero ambitions until the economic outlook improves’ is the argument. I believe this would not only be a mistake, but a dereliction of our duty to the generations that will follow us, none of whom will appreciate our choosing short-term expediency over the longer-term health of the planet.
I don’t want to diminish or underplay the current difficulties facing businesses, but, at the time of writing (and as if we needed reminding) we have drought conditions in Europe, most of Pakistan under water, and confirmation that the Greenland ice cap melt is irreversible, leading to inevitable sea level rise. In such circumstances, we cannot sit idly by. We must press on with our quest to reduce carbon emissions.
For energy-intensive businesses, increasing costs over the next 12 to 24 months will present a significant challenge. The economist might well say that we are only now paying the ‘right’ price for energy – historically it has been too cheap as we have not taken account of the true cost of fossil fuel. We have paid for the ‘private’ costs of energy (the costs of extracting fossil fuel from the ground, refining it and delivering it to where it’s needed) but not for the ‘external’ costs involved in fossil fuel extraction, production, and consumption (dislocation of ecosystems, pollution, carbon emissions and climate change, to name a few).
Private costs have been the basis for calculating energy prices, but the latter take no account of the vast external costs of fossil fuel, the impact of which is now being seen in the extreme weather we are (and have been) experiencing across the world. If we had to pay for these external costs from the outset (in the form of some kind of carbon tax), then we might have moved off fossil fuel to green energy much sooner. We would certainly have done everything we could to reduce energy consumption, and well before now.
We are, though, where we are, and must face the market environment as we see it. The Government has a role to play, of course, in accelerating the move away from fossil fuel (and therefore our unhappy dependence on overseas energy supply) to home-grown renewables, nuclear energy and new technologies such as hydrogen. But we, as businesses, also have a responsibility to focus on energy reduction and, in parallel to reduce our reliance on fossil fuels.
One way to reduce reliance on fossil fuels is to invest in solar. At Zen we are well advanced with an important solar project. Even at the current energy price cap, payback on capital investment in solar is less than five years.
Given solar panels last 25 years, the returns on solar are exceptional and a great hedge on any further increase in energy costs. A £250k investment in solar at Zen (the panels are deployed on our HQ roof) is generating 170kWh of energy, saving us £58k in energy costs and, in parallel, reducing our emissions by just over 50 tCO2e.
A simple way to reduce energy consumption is through insulation. Why there isn’t a Government scheme in place to ensure that every business property (and home) is properly insulated when we’re effectively wasting 20 per cent or more of our energy through ineffective insulation, is beyond me.
If there is a silver lining to be found in all this, perhaps it is that our new-found focus on energy reduction, and therefore carbon emission reduction, means that we are in fact accelerating, rather than slowing down, our progress towards Net Zero.