London and the net zero challenge

By Karim Fatehi MBE

The Chamber is relentless in our championing of all businesses. From the corner newsagent to the hedge fund managers, we represent every type and size of business as all these firms are part of the special ecosystem making London the world’s number one business hub.

Thanks to our Quarterly Economic Surveys, we also know how business is coping in every part of our city. We lead with business intelligence on the state of the London economy.

As a consequence, we need to look at the long term challenges facing our city to ensure London stays ahead of the global competition.

The most significant of these challenges is climate change. The evidence of the climate emergency is overwhelming and, over recent years, the capital has experienced extreme weather events – from heat waves to flash floods.

Global cities play an increasingly important role at the global and regional level: from Asia to Africa, from South and North America to Europe, large urban centres enjoy significant competitive advantages and serve as primary nodes in the globalised economic system. They interact with states and other international actors, pursue objectives that are often intertwined with global economic agendas, and are crucial to questions related to climate change, mobility and migration, technological innovation, economic development and infrastructure. At the same time, global cities dramatically display the challenges posed by social inequalities and exclusion.

London and other major cities can be in the forefront of tackling climate change. This is partly because cities are leading global economic growth and is in the best position, due to this pivotal role in the economy, to address the needs of the climate. Cities are efficient and the economic output that can be derived from cities is much greater as a

Cities are being transformed by urbanisation, driven by technological innovations and the exchange of new ideas as industries increasingly cluster together.

We are seeing that in London where the Chamber has championed the production of sustainable aviation fuels (SAFs) in its Green Skies report. London’s global city status is specifically linked to major airports supporting the business life of the capital. The new Government has announced, since the publication of the Chamber report, new legislative proposals to support the production of SAFs in the UK.

The evidence of the climate emergency is overwhelming and, over recent years, the capital has experienced extreme weather events – from heat waves to flash floods.

With 90% of the global population predicted to be living in cities by the end of the century according to research by Oxford University, this is a long-term trend, providing a huge growth opportunity for investors.

There is a direct correlation between cities and the creation of wealth. Urbanisation creates efficiencies, which attract businesses and people, because of the job opportunities. This in turn attracts more businesses because of the available talent. That talent helps businesses grow and innovate, which in turn attracts more talent. This is the power of urbanisation. Urbanisation creates wealth.

One of the main advantages of a city, like London, is the ability for different business to be located near each other. This is known as “clustering” and is an essential component in the success of many businesses today, boosting efficiency and allowing companies to work together and exchange ideas.

Today, cities tend to play host to different clusters of industries. For example, Los Angeles is a hub for the entertainment industry, Boston is a hub for medical research and Singapore is a hub for the finance industry.

London is the business hub for finance, tourism, life sciences, tech and so much more. That is why London, despite the challenges facing the city, remains the world’s number one business hub.

Cities are also an essential lever in the battle to reduce greenhouse gases and conserve energy. The energy costs for high density housing, such as apartments, are about 30% lower than for a house. As apartments are clustered together, heating costs will invariably be lower. As many new apartment buildings now have installed energy systems, such as solar panels, energy costs can be even lower.

If the UK is to meet its Government-set target of net zero greenhouse gas emissions by 2050, higher levels of population density will be crucial. The larger a city grows, the more efficient it becomes. This is the theory of urban metabolism, which explains why cities become more productive and inventive as they expand in size.

The UK economy is legally bound to achieve net zero carbon emissions by 2050 and reduce carbon emissions by 60% by 2035 from today’s levels. The Mayor of London has also set ambitious aims for London to be a zero-carbon city by 2030. This means businesses and industry will have to act now to reduce their carbon emissions accordingly.

The Chamber is committed to helping businesses reach net zero. We have been promoting net zero funding opportunities to members such as: the Chamber has championed the production of sustainable aviation fuels (SAFs) in its Green Skies report. London’s global city status is specifically linked to major airports supporting the business life of the capital.

Community grants and funding distributes grants to support communities and civil society organisations. Applications for the Grow Back Greener Fund are open.

Green and Resilient Spaces Fund - Funding for large-scale, innovative enhancements to green and blue spaces and the wider public realm. Applications are now open for expressions of interest.

Challenge London – An initiative to work with bright and creative innovators to solve the challenges facing London and Londoners.

One of our members, Heart of the City, has a great toolkit to help SMEs meet its environmental obligations and save money. Climate Action Toolkit - Heart of the City (theheartofthecity.com)

In the coming months, the Chamber will produce two major reports on what more London can do to meet the next zero challenge – what more we need to do to further develop the sustainable finance sector and how to ensure every building in the capital is retrofitted.

The science of climate change is not in doubt. London is in the ideal position to meet this challenge so that not only do we meet the net zero target but we remain the world’s number one centre for business.

Karim Fatehi MBE is the Chief Executive of the London Chamber of Commerce and Industry