Sustainability and Net Zero and Business Insights Report 23-24

Foreword: Raj

Kandola, Director of External Affairs, Greater Birmingham Chambers of Commerce

This report marks the third year running in which the Greater Birmingham Chambers of Commerce has sought to understand local business sentiment towards a range of issues related to environmental sustainability. Throughout 2023 businesses continued to grapple with cost pressures, labour market challenges and supply chain disruption caused by geo-political tension. The research presented in this report suggests that despite these ongoing challenges and fluctuations in national environmental policy, businesses remain increasingly committed to reducing their impact on the environment. The resilience and continued dedication of businesses in reducing emissions reflects a growing understanding of the risks presented by climate change and the importance of ensuring environmental matters are at the heart of business growth. However, whilst sustainability considerations are in the hearts and minds of business leaders, it is becoming increasingly apparent that firms require tailored support from regional and national stakeholders in order to enact best practice approaches to reduce their carbon footprint.

As a Chamber, we will continue to support businesses navigating through these challenging circumstances on the journey to net zero. With interest rates expected to come down this year and the impact of inflation easing, it is important to ensure business growth aspirations continue to consider the climate change agenda. The Chamber will look to help businesses develop their knowledge and understanding of this agenda through channels such as the Net Zero Network and campaigns such as the Sustainable Business Series, which for the first time in 2024/25 will be delivered over the course of twelve months, incorporating best practice advice and guidance around topics such as energy, waste and green infrastructure. Full details can be found on our website.

Executive Summary

Independent research by the Greater Birmingham Chambers of Commerce found that in 2023:

• 72% of organisations stated they implemented measures aimed at reducing their environmental impact, which was a 7 percentage point increase compared to 2022.

• Of those businesses who have already implemented measures, 29% of organisations stated that they intend to introduce additional measures in the short term whilst 34% of organisations stated that they intend to introduce additional measures in the longer term.

• Of those businesses who have not yet implemented measures, 7% stated that they intend to introduce measures in the short term compared, and a further 7% of organisations who stated that they intend to in the longer term.

Additionally, research by the British Chambers of Commerce found:

• 38% of West Midlands firms stated that recent government changes are likely to have no impact on their organisation.

• 37% of organisations stated that the clean air zone has had no impact on their organisation, whilst 43% of organisations stated that the clean air zone has had a negative impact on their organisation.

• 40% of organisations reported that the national grid is not providing their organisations with what it needs (in terms of energy supply, connectivity and/or future proofing).

• 36% of organisations are aware of the UK government target of achieving net zero but are not aware of the details, whilst 7% of organisations are not aware of the target.

• 16% of organisations in the West Midlands are not aware of net zero targets within their sector or supply chain.

Business Perspectives on the Environment

This chapter utilises data from the 2023 Greater Birmingham Chambers of Commerce Q3 Quarterly Business Report (QBR). This data was collected from businesses operating across the Greater Birmingham region, from August 2023 – September 2023. Additionally, data from the British Chambers of Commerce (BCC) Net Zero survey has been referenced. This data was collected in October 2023, from businesses in the West Midlands area. This chapter will provide an understanding of business perspectives on a range of issues related to the environment.

QBR: Has your organisation implemented any measures specifically aimed at reducing your environmental impact to date?

Has your organisation implemented any measures specifically aimed at reducing your environmental impact to date?

• In 2023, 72% of organisations stated that they had implemented measures aimed at reducing their environmental impact. This was a 7 percentage point increase compared to 2022 and an increase of 13 percentage points compared to 2021.

• In 2023, 22% of organisations stated that they had not implemented measures aimed at reducing their environmental impact. This figure was higher in both 2022 (26%) and 2021 (33%).

QBR: Which option best describes your approach to reducing your environmental impact looking forward? (please tick one option)

Which option best describes your approach to reducing your environmental impact looking forward?

• In 2023, 74% of businesses surveyed, have already implemented measures. Of these:

o 29% of organisations stated that they intend to introduce additional measures in the short term. For comparison, there has been a 6 percentage point increase compared to 2022 (23%) and a 5 percentage point increase compared to 2021 (24%).

o 34% of organisations stated that intend to introduce additional measures in the longer term. For comparison, there has been a 1 percentage point increase compared to 2022 (33%) and a 7 percentage point increase compared to 2021 (27%).

o 11% of organisations stated they have no current plans to implement any further measures in the future. For comparison, there has been a decline of 6 percentage points compared to 2022 (17%), but a 2 percentage point increase compared to 2021 (9%).

• In 2023, 19% of businesses surveyed have not implemented measures. Of these:

o 7% of organisations stated that they intend to introduce measures in the short term. For comparison there has been a 2 percentage decline compared to 2022 (9%) and a 1 percentage point decline compared to 2021 (8%).

o 7% of organisations stated that they intend to in the longer term. For comparison, there has been 3 percentage point increase compared to 2022 (4%) but a 4 percentage point decline compared to 2021.

o 5% of organisations stated they had no current plans to implement measures in the future. For comparison, there has been a 1 percentage point decline compared to 2022 (6%) and a 5 percentage point decline compared to 2021.

BCC: On 20 September 2023, the Prime Minister announced changes to its net zero strategy, including the postponement of 1) the ban on diesel and petrol cars from 2030 to 2035, 2) the ban on new oil or LPG boilers for off-gas-grid households from 2026 to 2035, and 3) the scrapping of obligations on landlords to upgrade the energy efficiency of their homes. Do you think the postponement of these changes will have an impact on your organisation?

Do you think the postponement of these changes will have an impact on your organisation

• 38% of organisations surveyed, stated that recent government changes are likely to have no impact on their organisation.

• 34% of organisations stated that recent policy developments would have a positive impact (22% stating a slight positive impact and 12% stating a significantly positive impact).

• 22% of organisations stated that the recent changes would have a negative impact (13% stating it would have a slightly negative impact and 9% stating it would have a significantly negative impact).

BCC: In August 2023, the London Ultra Low Emission Zone (ULEZ) expanded across all London boroughs. A low emission or clean air zone is an area in which a fee is charged to certain vehicles based on emissions standards. Do you think a clean air zone in your local area will have, or has already had, an impact on your organisation?

Do you think a clean air zone in your local area will have, or has already had, an impact on your organisation?

• 37% of organisations stated that the clean air zone has had no impact on their organisation.

• 15% of organisations stated the clean air zone has had a positive impact on their organisation (9% stated it would have a slight positive impact and 6% stated it would have a significant positive impact).

• 43% of organisations stated that the clean air zone has had a negative impact on their organisation (17% stating a slightly negative impact and 26% stating a significantly negative impact).

BCC: To what extent do you agree or disagree that the national grid is giving your organisation what it needs in terms of energy supply, connectivity, and/or future-proofing?

To what extent do you agree or disagree that the national grid is giving your organisation what it needs in terms of energy supply, connectivity, and/or future-proofing?

• 42% of organisations stated that they are in agreement that the national grid is providing their organisation with its needs, in terms of energy supply, connectivity and/or future proofing (10% stated they strongly agree whilst 32% stated they somewhat agree).

• 40% of organisations stated that they do not agree with the idea that the national grid is providing their organisations with what it needs in terms of energy supply, connectivity and/or future proofing (27% stated they somewhat disagree whilst 13% stated they strongly agree).

BCC: To what extent do you understand what the potential obligations might be for your organisation of each of the following:

The UK Government target of achieving net zero emissions by 2050

Not aware of target

Aware but know no details

Know some details

Comprehensively understand

• 11% of organisations in the West Midlands, comprehensively understand the potential obligations associated with the UK government target of achieving net zero emissions by 2050.

• 46% of organisations in the West Midlands know some details associated with the potential obligations businesses face as a result of the UK government target of achieving net zero emissions by 2050.

• 36% of organisations are aware but know no details regarding the UK governments target of achieving net zero emissions by 2050

• 7% of organisations are not aware of the target.

Net zero targets within your sector or supply chain

Not aware of target

Aware but know no details

Know some details

Comprehensively understand

• 10% of organisations comprehensively understand the potential obligations associated with net zero targets within their sector or supply chain.

• 44% know some of the details associated with the potential obligations as a result of net zero targets within their sector or supply chain.

• 30% of organisations are aware of their obligations but do not know details whilst 16% are not aware of net zero targets within their sector or supply chain

Case Studies

University College Birmingham

In the heart of Birmingham’s Jewellery Quarter, University College Birmingham is passionate about developing its learners with industry skills that employers want and that address both regional and national skills gaps. The University has invested £180 million in its campus facilities in the last decade and the regeneration of the James Cond building encapsulates the University’s commitment to supporting the skills agenda, transforming the former art deco printworks into its Centre for Sustainable Construction.

Having been left derelict with a crumbling roof, leaking glazing and places that were entirely open to the elements, the regeneration of the building sought to restore an iconic building to modern standards while also adding sustainable and energy-efficient features that bring sustainability to the forefront of the construction curriculum, showcasing sustainability in practice and inspiring the programme of study. University College Birmingham worked with partners including CPW, GMI Construction, Lucas Architects, Currie and Brown, Acivico, Quadrant Approved Inspectors and Rambol, to restore the building. The project required all new services, new ventilation and new power requirements. Air source heat pumps were installed to provide a more eco-friendly heating solution, while solar panels were added to the roof to provide a renewable energy source.

Innovative tools were implemented to bring this to a modern standard, including thermal modelling, thermal imaging using drone technology and automated lighting controls. The team were able to go above and beyond current energy efficiency regulations, ultimately achieving an EPC A rating. The team also took care to preserve and restore heritage features where possible including adapting the building’s original 1920s Crittall windows, which now have bespoke double-glazing fitted within the existing frames. Inside the new Centre for Sustainable Construction, learners are trained on key skills that support employers and supply chains, crucially within an environment conducive to sustainable methods of construction. With these skills more in demand than ever; this facility will help train the next generation in the city to design, build and maintain buildings in a way that will ensure both their longevity and the continuing development of a sustainably-minded future workforce

Case Studies

Lloyds Bank

A West Midlands manufacturer is becoming more energy self-sufficient and reducing its emissions with the installation of 162 solar panels, supported by a £58,000 investment from Lloyds Bank.

Alleviating energy demand

The solar panels have been funded via Lloyds Bank’s Clean Growth Financing Initiative, which provides customers with access to discounted lending for green purposes, in addition to a £12,000 investment from the business.

Headquartered in Bilston, Wolverhampton, Parker Precision provides precision engineering services to aviation, defence and petrochemical businesses.

In 2021, Lloyds Bank supported Parker Precision to purchase the assets of the precision grinding department of aviation and aerospace component manufacturer, Kepston. It also helped fund the construction of an extension to the business’ existing site to accommodate the acquired division and its staff. The new solar panels will help the manufacturer alleviate the additional energy demand of the expansion.

Increasing productivity

The 66.15 kWh system has been fitted to the south facing roof of Parker Precision’s building, to maximise electricity generation. The panels provide around a third of the site’s energy requirement and have reduced its monthly electricity bills by £4,000. The business also plans to sell the surplus energy generated during sunny periods back to the grid, to supplement its bills further.

The energy generated by the solar panels has enabled Parker Precision to introduce a reduced evening shift, which is entirely powered by the solar energy. This time is designated to the running of any jobs that are of urgent customer need, increasing throughput without increasing operational costs. The panels are also used to charge its electric company car via a recently installed charge point.

The £3.5m turnover business currently employs 38 staff. It plans to utilise the cost savings to invest back into the business, including to upskill its existing staff and take on new apprentices. Parker Precision hopes the investment will help it achieve a 20% growth in turnover this year.

Recommendations

As a result of the findings in this report, the Greater Birmingham Chambers of Commerce have outlined the following recommendations for regional and national stakeholders. These recommendations will look to support businesses in the journey to a prosperous, green future.

1) National government must establish and commit to following a comprehensive, long-term, cross-party plan, outlining how the UK will look to achieve net zero and the requirements of business within this. Despite local firms showing resilience to the constant policy changes that have undermined the climate agenda, this will only last so long, and a reliable guide to achieving sustainability targets is needed to give businesses the confidence to make critical investment decisions.

2) Regional stakeholders must assess the impact of Clean Air Zones on environmental pollution against the impact on businesses and the local economy. Where other local authorities are looking to introduce similar measures, its vitally important that stakeholders use and build on lessons from the implementation of those such as the Birmingham Clean Air Zone which have sought to mitigate undesirable consequences for businesses in as far as possible.

3) A significant portion of businesses in the West Midlands revealed concerns over the national grid being able to provide them with what they need. Given the recognition of the link between access to the national grid and economic growth, it is increasingly important that the UK government and regional stakeholders work collaboratively to ensure the national grid is able to effectively meet the expectations of businesses in the West Midlands to ensure economic growth in the region is not constrained. Continuing to reform the planning system could play a significant role in delivering economic growth.

4) More support is required to not only help businesses start their journey towards net zero, but to also help them develop an understanding of the more challenging details related to achieving net zero. It’s clear that the detail associated with net zero targets is increasingly too complex for certain businesses to fully understand, and financial implications too significant to overcome amid various other cost pressures (not least interest rates). Business support programmes such as the West Midlands Combined Authority’s Business Energy Advice Service programme are key to ensuring businesses are able to navigate through the challenging journey towards net zero. It’s important that the WMCA work closely with membership organisations to raise awareness of the service.

For more information about the contents of this report, please contact:

Kuran Singh

Policy Advisor, Greater Birmingham Chambers of Commerce

K.Singh@birmingham-chamber.com