David Kidney’s blog: September 2024
Once upon a time, I was a Minister in what was then the Department for Energy and Climate Change (DECC). In this capacity, back in 2009, I was given the role of visiting universities, colleges and schools and explaining to students the risks ahead and the actions we could all take to cut carbon emissions. My presentations also had a section on adapting to the predictable impacts of existing climate change – something that has become more and more significant since.
Climate change refers to long-term shifts in temperatures and weather patterns. Human activities have been the main driver of climate change, primarily due to the burning of fossil fuels like coal, oil and gas.
We know that the effects of climate change will be disproportionately spread based on environmental factors (flood risk, temperature, air quality), social factors (demographics, health and disability, deprivation) and exposure to hazards (population density).
It is only human nature to be concerned about future harm to our society, to the animal kingdom, to flora and fauna, and to want to do something positive to avert future disasters. So there is a moral argument for taking action on climate change. In addition, for businesses there are sound business reasons for acting to reduce carbon emissions and adapting to climate change.
Let’s look at some of the business risks:
| RISK | CONSEQUENCE |
| Flooding of business premises | More frequent and extensive river, surface water and groundwater flooding causes pollution and interruption of production |
| Scarcity of water (drought) | Shortage of water causes interruption of production |
| Access to finance, investment and insurance | Greater incidence of extreme weather causes tighter access to, and raised costs and shortages of financial services |
| Disruption to supply chains and distribution networks | Greater incidence of extreme weather in the UK and abroad causes disruption to supplies and interruption of production and distribution |
| Reduced employee productivity | Climatic change causes higher temperatures in the workplace and disruption of infrastructure (e.g. travel to work) |
| Changes in demand for goods and services | Long-term climatic change causes permanent changes in customer demand |
In addition, indirect risks include:
- Risks to international trade routes
- Risks to the UK finance sector from climate impacts abroad
- Cascading risks across infrastructure networks: water, energy, transport & ICT.
It’s likely that many of us already strive to reduce emissions of greenhouse gases in order to prevent our planet from warming to more extreme temperatures. However the climate has changed, and we are already more exposed to more intense and frequent flooding, more severe storm surges, more intense and prolonged heatwaves and longer periods of drought, than we were even 20 years ago.
We need to adapt our behaviour, systems and ways of life to this changed climate, in addition to acting to stop the problem from getting worse. And happily, some actions that we can take to reduce our emissions can also help us to adapt to climate change.
REDUCE CARBON EMISSIONS
The emissions of businesses are generally categorised in three “scopes”:
Scope 1 emissions – direct emissions from sources owned or controlled by a company.
Scope 2 emissions – indirect emissions from purchased electricity, steam, heat, and cooling.
Scope 3 emissions – all other emissions associated with a company’s activities.
You may already be looking to reduce your company’s emissions, perhaps to minimise your energy costs, pursue enhanced sustainability, or reduce scope 3 emissions to stay in or enter a supply chain. Perhaps you have looked at greater electrification, reduced reliance on fossil fuels and integration of renewable energy sources (e.g. solar panels), and of course energy-efficiency.
You needn’t be alone in researching your options and selecting your solutions.
If you are a small or medium-sized enterprise (SME) anywhere in the West Midlands, your business, provided it is a limited company, can get a free energy audit and then apply for up to £100,000 of match funding towards the cost of all or some of the recommended measures. This could include supporting investment in new machinery and equipment, improved manufacturing processes or LED lighting and insulation. The Business Energy Advice Service is being delivered through Business Growth West Midlands in partnership with The High Value Manufacturing Catapult, Aston University, Warwick Manufacturing Group, Warwickshire County Council, Staffordshire County Council and Worcestershire County Council.
If you are a manufacturing SME in the WM Combined Authority’s area, the Net Zero Innovation Network from Warwick Manufacturing Group gives you the grant funding, world-class technical support and tools you need to achieve your objectives. This fully-funded programme is designed to help you minimise your energy costs using a combination of grants, expert consultancy support and workshops.
These are examples, there are more sources of support, advice and guidance in our region, including the Green Business Network and the Innovative Zero Carbon Working Group.
ADAPTING TO CLIMATE CHANGE
The Adaptation process looks like this:
- Current vulnerability – a baseline assessment
- Future vulnerability – assess risks under specified timelines (e.g. 2030 & 2080) and warming scenarios (e.g. 2C & 4C)
- Adaptation options – risk thresholds, cost-effectiveness, co-benefits, business continuity, collaboration
- Monitoring & evaluation – responsibility, maintenance, metrics and indicators.
The adaptation marketplace is ripe for innovation. From “nature finance” to major infrastructure products, there are opportunities to embrace new ways of making businesses sustainable in the long-term.
As with emissions reduction, support is available to help your business make significant money-saving changes.
The Decarbonisation Net Zero Programme in affiliation with Business Energy Advice Service aims to support sole traders, micro-businesses, small and medium-sized enterprises (SMEs) and large businesses. It also includes social enterprises where these engage in economic activity which have been trading across all sectors to respond to climate change and to support the growth of the local low-carbon sector.
The programme is offering the following services to eligible businesses:
- Information and Advice (1-2-1 advice, webinars, workshops, peer networks, etc.) supporting businesses to understand how they can get to net zero carbon emissions by 2050, support with new regulations, having an impact on investment and energy challenges with less uncertainty to enable them to take larger/longer-term investment decisions.
- Energy Audits/free diagnostic tools/on-site carbon reduction surveys supporting businesses to quantify and benchmark their emissions (audits of the energy used by their buildings, industrial processes and operations), identify cost-effective energy-saving measures, set validated emissions targets, embed low-carbon strategy within the company.
- Knowledge Transfer activities (a more technical Research and Development (R&D) support aimed at carbon accounting and sustainability software).
In terms of grants, there is £4.5million in Net Zero grants available, funded through the UK Shared Prosperity Fund. Businesses can get a grant of up to £100,000 in funding and up to 50% aid intensity.
If your business has had an energy efficiency assessment either through Decarbonisation/Net Zero or from an accredited audit company over the last 2 years, contact your local authority and you will be able to apply for a grant.
A CLUSTER APPROACH
Whilst the impacts of climate change will be felt differently across the region, our industries will all be impacted to some extent. It would make sense for businesses in every sector to take action now in anticipation of these impacts. Working together in clusters, businesses can take effective action and minimise future disruption and damage.
For this reason, several cluster organisations in the West Midlands have been looking at how to support businesses in some of the target sectors (those identified in Plan for Growth as potentially delivering above-average growth in our region).
One aspect of this cooperation at cluster organisations level has been a Climate Risk & Vulnerability Assessment (CRVA) map. We are working towards identifying where, across the region, climate risks might be concentrated. The Combined Authority has worked with the University of Birmingham to produce a CRVA that covers its seven constituent authorities. The plan is for the CRVA map to contain data relating to:
- Climate hazards (like high temperatures and flood risk)
- Socio-economic vulnerability (like income, health and demographics) and
- Exposure (like population density).
Each layer can be scored and then the scores combined to produce an overall scored map of climate risk and vulnerability.
The objective is to build in some element of adaptation process to ensure clusters of WM businesses are more resilient to climate impacts. Importantly, the WMCA Climate Adaptation Plan includes a section relating to the economy and integrating adaptation measures into the Plan for Growth clusters.
Recognising the extent of other priorities and limited resources, we’re trying to simplify this as much as possible at this stage, so we have identified 3 initial action areas for cluster organisations to potentially take forward:
(1) Share resources
(2) Map the cluster organisation’s climate risks and potential mitigation measures (or opportunities).
(3) Potentially pilot a cluster climate adaptation plan.
IN CONCLUSION
Our climate is changing. The world’s temperature is rising, bringing with it changes to the climate and weather patterns. In the West Midlands we’re going to see:
• Warmer, wetter winters
• Hotter, drier summers
• More extreme weather events.
I appreciate the number of conflicting priorities associated with running a business and your limited time, but hopefully you can see the importance of this work and are able to engage at a level and a time commitment manageable to you.
For the benefit of your business, in terms of sustainability and risk management, action is needed both to reduce carbon emissions and adapt to foreseeable impacts of climatic change. Taking action now improves your businesses’ resilience in the future. There is also a moral dimension for us all to consider if we are concerned about future generation and the health of our planet.
Resources are available to help you, and cluster organisation’s like ours are also on the case and want to help you.
For further information CONTACTS David Kidney david@wmhtc.co.uk
David Kidney, Executive Chair
26 September 2024.