Future of Sustainable Business - Q2 2023

Future of Sustainable Business

www.businessandindustry.co.uk

“We must ensure that people have the skills they need to thrive during the transition to net zero.”

Gudrun Cartwright, Climate Action Director, Business in the Community Page 04

“The transition to a circular economy for plastics requires significant investment.”

Steven Stone Deputy Director of the Economy Division, UNEP

Ending plastic pollution: why it’s a goal within reach

Plastic pollution ranks high on the agenda of world leaders today, with ongoing negotiations over an international and legally binding agreement to end it.

The international attention reflects growing scientific concerns about a waste crisis that risks human health and the right to a healthy environment, threatening biodiversity and the climate. It also puts the global economy in jeopardy.

Economic savings of eliminating plastic pollution

A new UN Environment Programme (UNEP) report reveals external costs of up to USD 300–600 billion per year in the form of environmental and human health costs. If left unchecked, these costs could reach magnitudes that destroy more value than the entire plastics value chain creates. However, turning off the tap on plastic pollution can create significant economic value. Halving short-lived plastics production and slashing plastic pollution by 80% by 2040 can deliver USD 1.27 trillion in net savings and USD 3.25 trillion in avoided externalities. This would also create 700,000 jobs, mostly in low-income countries.

Current efforts are slow and inefficient

Such benefits require government actions to reduce unnecessary plastics and shift the market to circularity. Environmentally sound waste management and other measures can address the legacy of plastic pollution.

This systemic shift must not

Climate and biodiversity as two sides of the same coin

Climate change and the disappearance of our ecosystems are inextricably linked to each other. This means that they need to be addressed together — by transitioning our economies to climate and nature-smart practices.

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only happen urgently but simultaneously. Scattered efforts on the local, national and regional levels — while welcome — amount to trying to drain an ocean of plastic waste with a ladle. We need an integrated approach to regulatory instruments and policies tackling actions across the life cycle of plastic products.

Plastic pollution — we can choose to opt out

If this feels daunting, let’s recall we have only been exposed to plastics for about 70 years — a fraction of human history. Turning away from a linear economy to a circular one requires no new technologies. It means re-embracing a way of life that’s been a feature of human society for millennia, realising the throwaway culture is as recent as plastic itself.

Looking at the full life cycle of goods and services can unlock innovation, creativity and investment from the business community. With this year’s World Environment Day, grassroots protests and celebrations worldwide gave voice to a global majority that is ready for change.

Plastic pollution is not hardwired into our economies. Ending it is a choice — and a goal within reach.

In 2018, Ed Hawkins, a professor at the University of Reading, depicted 170 years of global warming by using colour-coded stripes that showed cooler years in blue and temperature anomalies in darker shades of red. Following the success of the campaign, the University of Derby used the same approach to convey the world’s rapidly disappearing biological diversity in shades of green to grey.

Climate and nature: a double crisis in the making

As many of our landscapes and ecosystems become less diverse — in part due to rising temperatures — they lose their capacity to hold carbon and could even send more of it up into the atmosphere. In addition, both climate change and biodiversity loss result from tremendous economic pressures leading to land use change, pollution and resource overuse.

Over the years, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, has built and financed a diverse pipeline of green innovations to address climate change. Having introduced new market standards and business models to finance the new climate economy, we are increasingly turning our attention to channelling funds to reverse ecosystem losses in the developing world.

Biodiversity finance: a new frontier

Last year, IFC’s work in this area culminated in a Biodiversity Finance Reference Guide that is helping investors, financiers, companies and governments identify investments that protect and rehabilitate biodiversity and ecosystems.

Building on this work, and efforts to create and finance a viable market to preserve oceans and waterways, we are looking into how private companies and governments might use ‘blue carbon’ markets to finance specific coastal hotspots — from mangroves to salt marshes.

The paper looks at what it will take to establish clear rules of the road for blue carbon trading, from metrics to verify the use of proceeds for blue carbon credits to how insurance companies can incentivise coastal protection into their underwriting and pricing processes. Given the urgency of this work, we invite investors to join in this effort.

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Scaling up sustainably to tackle the climate crisis

To decarbonise and achieve net zero, we need to drive change — at speed and scale. We must support the fight against climate change while preserving nature and supporting local communities.

Dr Alan Knight Chief Sustainability Officer, Drax

Dr Alan Knight, Chief Sustainability Officer at Drax, says the company is looking at how it uses sustainable biomass to provide energy security for the UK while also helping to tackle the climate crisis. “This can only be done if biomass is sourced from healthy, managed forests. The majority of the fibre we use to make our biomass pellets comes from well-regulated forests in the US and Canada, and these are used to generate a valuable resource — renewable power.”

Committed to sustainability and becoming carbon negative

Dr Knight reveals plans to become carbon negative by 2030 in addition to producing renewable power. “We’ll do this through our bioenergy with carbon capture and storage (BECCS) technology, which has a unique ability to generate renewable power while permanently removing CO2 from the atmosphere.

“Sustainability is at the heart of our business model. We’re building for a sustainable future in how we source our biomass, generate energy, remove CO2 and function as a business. To meet our ambitions of scaling up, we need to do it in a way that delivers positive outcomes for the climate, nature and people around us — and by putting sustainability at the forefront of what we do, we can build a positive future.”

Mitigating the climate crisis globally

“The need to decarbonise is real, and we believe BECCS can do exactly that,” says Dr Knight. “We want to be a leader in BECCS, not just in the UK but across the globe. Through this, we can lead the rest of the world in carbon removals.”

Dr Knight reveals the company has plans underway to expand its carbon removal projects to the US, aiming to store millions of tonnes of carbon permanently underground. “We’ll be creating jobs, helping promote healthy forests, powering homes and businesses, all supporting efforts to tackle the climate crisis. Scaling up your business shouldn’t come at a cost to the planet — we believe sustainability and growth can go hand in hand. That’s why every step we take is considered.”

BECCS as a solution to tackling the climate crisis Using biomass without carbon capture technology is already very low-carbon and renewable. However, with BECCS, the carbon is captured and stored underground — permanently taking it out of the carbon cycle.

“With this in mind, it’s clear that BECCS will have an important role to play in helping us meet net zero by 2050. We have trialled BECCS at Drax Power Station in Yorkshire, and we believe that this technology can drive change in tackling the climate crisis. BECCS isn’t just for

the UK, it’s for the world,” explains Dr Knight.

How can BECCS be done well?

Scientific institutions like the UN’s Intergovernmental Panel on Climate Change and the UK’s independent advisory panel, the Climate Change Committee, have voiced support for BECCS as a tool that can help us meet climate targets — but only when done under strict sustainability conditions.

“When it comes to BECCS, we must prioritise quality over quantity and ensure we are using BECCS for the good of the planet. We take this seriously and that’s why, in 2022, we invited Jonathan Porritt and the ‘Forum for the Future’ to prepare an independent assessment on how BECCS can be done well at scale. Listening to our stakeholders is important to us, and we plan to implement the report’s findings into how we operate, and how we’ll scale up our BECCS projects.

“We’re positive about the future and we have reflected the role sustainability has at Drax with our new internal governance structure … so we can make sure that, as our business grows, we maintain the high standards and strict governance that make us who we are as a business,” concludes Dr Knight.

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By putting sustainability at the forefront of what we do, we can build a positive future.

Image provided by Drax

Ensure your business is ready for the net zero transition

To reach net zero by 2040, businesses have the responsibility to invest in green skills to prepare their workforce for a greener future.

The climate crisis is our biggest shared challenge. Business in the Community (BITC) works with businesses to create a fairer and greener world driven by fairer and greener businesses. To help achieve a fairer and greener world, we must ensure that people have the skills they need to thrive during the transition to net zero and climate resilience.

New green skills and initiatives to achieve net zero

The United Nations recently called on all developed countries to achieve net zero by 2040.1 This means pressure on businesses to act rapidly will escalate. Businesses must invest in green skills now to enable current employees to adapt and give future employees access to good jobs.

In 2021, BITC research found that only 1 in 10 people think their jobs will be adversely affected or they will need new skills because of the transition. Of these, 8 in 10 do not think their employer is doing enough to prepare them.2 This is despite PricewaterhouseCoopers (PwC) reporting that 66,000 new tradespeople will be needed each year for retrofits and heat pump installations3 and National Grid predicting that 400,000 new energy recruits will be needed between now and 2050 to meet net zero targets.4

However, it is not just jobs in directly impacted sectors that will need new skills. BITC convened business, government, academia and community leaders to produce a route map to help tackle the skills challenge. It is clear from our work that all job roles will require new skills — from accountants reporting on non-financial indicators to procurement professionals managing scope 3 emissions, everyone will have a part to play in reaching net zero.

How leaders must evolve and adjust

Crucially,

the role of leaders needs to change.

Understanding risks and opportunities, becoming comfortable with uncertainty, involving diverse stakeholders and empowering employees to deliver are essential leadership capabilities for organisations, people and nature to thrive in the 21st century. Employers must step up now to ensure their organisation is ready for the inevitable changes that will come with the transition. They must become the leaders their organisations and wider society need, by supporting current and future employees to co-create strategies that build the skills to transform their organisations and enable individuals to adapt to future demands. There is no time to waste.

References

1. https://press.un.org/en/2023/sgsm21730.doc.htm

2. https://www.bitc.org.uk/report/the-right-climate-for-business-leading-a-justtransition/

3. https://www.pwc.co.uk/who-we-are/purpose/green-jobs-barometer-retrofit. pdf p.2

4. https://www.nationalgrid.com/stories/journey-to-net-zero/net-zero-energyworkforce p.5

Gudrun Cartwright Climate Action Director, Business in the Community

How the right policies and partnerships can encourage investment in a plastics circular economy

The proliferation of pollution has led to a catastrophic situation that threatens our planet, livelihoods and health. One solution to this challenge is investing in a circular economy.

Acircular economy is an economic system designed to be restorative and regenerative. It aims to keep products, components and materials at their highest value and utility at all times while minimising waste and pollution. It can help us attain our climate goals and reduce the impact of plastic pollution on our planet.

which began with limited funds but benefited from government policies that removed hurdles to capital allocation.

WRITTEN BY Roisin Greene Co-Director, Global Plastic Action Partnership

Encouraging investments for a circular economy

The transition to a circular economy for plastics requires significant investment, and focusing our attention on how to generate the capital needed is crucial. The UN plastics treaty will set the stage for countries to adopt policies designed to incentivise and de-risk investments from the private sector.

So far, financing has been channelled towards ‘trending’ areas such as renewable energy and energy efficiency. In fact, without further intervention, up to 13% of the global carbon budget by 2050 will be attributable to greenhouse gas emissions from the plastic life cycle alone.

Government policies that benefit the environment

Encouragingly, we are already observing some positive developments. In 2018, the Indonesian Government launched the world’s first green sukuk (Islamic) bond with a US$1.25 billion issuance. Morgan Stanley similarly drew a comparison between the plastic industry and India’s renewable energy market,

As a starting point to unlock access to finance, the right policy frameworks should be developed that incentivise investment. Transparent, equitable and predictable policies can lead to an enabling environment for the circular plastics economy and catalyse reliable funding sources.

Partnerships to address financing gaps

National Plastic Action Partnerships, such as those set up by the World Economic Forum, create a reliable ecosystem for catalytic capital to take off by establishing common objectives and a framework for action that is owned and driven by government and diverse local stakeholders. This boosts confidence among public and private financiers, unlocking access to finance. In addition, partnerships take into consideration how to best channel the required capital to traditionally marginalised groups who need it most.

The financing gap to address both the climate crisis and plastic pollution is substantial. Policymakers, private investors and public capital holders must collaborate to bridge the financing gap and act on these challenges effectively and at scale. By working together, we can create a sustainable future and protect our planet from the devastating impact of plastic pollution.

Research conducted by the UK’s largest gas distribution network shows what UK households think about sustainability with the cost of living crisis.

What is the public’s attitude towards sustainability during the cost of living crisis?

Last year, Cadent — the UK’s largest gas distribution network — began working with research institute Thinks Insight & Strategy, to collect consumer intel as part of a long-term study: Energy Diaries.

“The latest findings reveal three key messages,” says Mark Belmega, Director of Sustainability and Social Purpose at Cadent.

“First is that people genuinely care about sustainability — but around a quarter have stopped actively looking to implement sustainability measures right now.

“Secondly, around three-quarters of respondents look to businesses like ours to be more sustainable, expecting us to support customers to do the

same. Thirdly, only around 21% of consumers think energy companies and 26% of consumers think government are doing enough to offer support, indicating the need for a more joined-up approach.”

Supporting vulnerable customers in society

The study also found that people want the energy industry to focus on the most vulnerable in society, including those trapped in fuel poverty. “Collaboration is key, and we’re working with fantastic organisations — such as National Energy Action — to drive initiatives in the most deprived communities and support those who do not have access to tools and information that can help deliver meaningful change,” says Belmega.

“For example, we’ve implemented a scheme called Centres for Warmth

in low-income areas. People can visit for a free consultation with a trained consultant who will help them understand ways to change energy use in their homes. They can also learn about government support they perhaps didn’t know they were entitled to. The average householder leaves one of these consultations around £2,000–£2,500 better off.”

Taking proactive steps in business

Businesses must proactively help the UK reach its net zero targets — which, notes Belmega, is hanging in the balance right now. They should be transparent about their current sustainability performance while setting out ambitious goals to decarbonise operations. Importantly, companies should focus on areas most relevant to them. “For example, our business transports a fossil fuel,” says Belmega. “So, long-term, the biggest thing we can do is transition away from natural gas and explore low-carbon gas alternatives. In the short-term, natural gas will remain a primary heating source and our role right now is to do everything we can to drive down our own emissions while helping customers, particularly those in the most vulnerable situations, become more energy-efficient. It’s a win-win that cuts costs and carbon.”

WRITTEN BY Tony Greenway

Paid for by Cadent

Mark Belmega Director, Sustainability and Social Purpose, Cadent

It’s crunch time: why businesses must do more to support the UK’s net zero goals

Recognising that the logistics sector faces a tough set of sustainability challenges, a same-day delivery service firm has developed a robust plan to minimise its environmental impact.

The most effective way for an organisation to drive its sustainability plans is from the top down, insists Mark Footman, Chief Operating Officer of same-day nationwide delivery service, CitySprint. “Big, important issues — and they don’t come bigger or more important than sustainability — must have board sponsorship,” he says. “This means that sustainability is owned at board level, but it’s also kept alive at board level, which ensures buy-in from the rest of the organisation.”

Making logistics more sustainable

As an industry that produces significant vehicle emissions and packaging waste, logistics faces particularly tough sustainability challenges. However, Footman notes that CitySprint — which achieved carbon neutral certification in 2022, 18 months ahead of schedule — has a plan to minimise its environmental impact.

This includes moving all its sites to 100% renewable energy; setting strict recycling targets; expanding its electric vehicle fleet and cargo bike fleet; developing technology to make route-planning more efficient; carbon offsetting; and running an in-house energy efficiency campaign to incentivise best practice among staff.

Sharing

sustainability achievements and targets

“Sustainability is a key topic at the conferences we hold for our sales, senior operators and leadership teams,” says Footman. “We produce a CSR brochure that allows us to share our sustainability achievements and targets with customers and colleagues.”

If a company is just starting on its sustainability journey, Footman advises bringing in expert help. “A small or medium-sized business might not have the expertise to achieve real change in this area,” he says. “So, consult someone who really understands this subject and can help you build a detailed sustainability plan.”

National and local government must do more to help businesses reduce their impact on the environment, says Footman. “For example, the country’s lack of charging infrastructure makes it a challenge for us to promote zero emissions vehicles to our self-employed couriers,” he explains. “Nevertheless, we take our sustainability responsibilities very seriously and are determined to play our part in a greener future.”

Mark Footman Chief Operating Officer, CitySprint

WRITTEN BY Tony Greenway

Bringing to light all the design we don’t see

Design is everywhere, and we need to learn how to ‘redesign design’ to transform the economy in a way that benefits people, businesses and the natural world.

Sitting at the centre of every sector and across multiple scales, design has helped to create millions of beautiful things and trillions of beautiful moments.

Redesigning design can lead to meaningful transformation

Beyond the material world, design’s influence in our lives runs deeper. More than the sum of its physical parts or the total of its tangible outputs, design is a constellation of patterns and processes which are unimaginably powerful.

Over time, though, design has lost its way. Intentionally or not, it has sustained the structures of our wasteful and polluting linear economy and indirectly contributed to global challenges like climate change and biodiversity loss.

It is time to trace a new path. Learning – and in some cases re-learning – how to harness the quiet powers of design to help transform our economy into one which benefits people, business, and the natural world is not only possible but vital. One of the first steps on that journey is to understand that even design has been designed.

Opportunity to get creative and shift mindsets

Surfacing the transformational potential of design’s unseen undercurrents can help us move away from seeing design as a force for the linear economy — in which minerals accumulated over millennia are extracted for products used for minutes — to a lever for systemic change in which products are kept in use at their highest value for as long as possible.

Redesigning design — the ultimate innovation

challenge — is both a process and a journey. It might be messy and is frequently iterative. For businesses, it means focusing on setting the right internal conditions rather than only fixating on the right external outcomes. It means collectively leaning into our responsibility to imagine, question and act.

To be part of this design transformation, individuals, teams and businesses will need to learn how to map moving parts; make sense of complex systems; and measure impact according to a new North Star. This means a circular economy which eliminates waste and pollution, circulates products and materials and regenerates nature — by design.

WRITTEN BY Emma Elobeid Editor,

WRITTEN BY Emily Marsh, Design Researcher, Ellen MacArthur Foundation

Why improving sustainability in logistics is all in the delivery

The Ellen MacArthur Foundation’s adaptive strategy for circular design helps organisations start their journey of systemic change and achieve their circular economy ambitions.

Ellen MacArthur Foundation

It is not just jobs in directly impacted sectors that will need new skills.

Net zero world: towards a circular built environment

Businesses working across every sector of the built environment are realising that we need to become better stewards of our planet’s diminishing resources.

Buildings alone account for 37% of global greenhouse gas emissions, while around 95% of the value of construction materials is lost in demolition. This is largely due to the ‘take, make, dispose’ model of linear consumption currently at the heart of real estate and construction.

Toolkit to guide circularity in real estate

A transition towards a circular economy model of ‘eliminate, circulate, regenerate’ offers a path towards net zero while unlocking a multi-billion-dollar business opportunity.

Building designers, construction clients and asset owners are central to this transition but face ever-increasing demands on their time from multiple competing agendas. Arup and the Ellen MacArthur Foundation developed the Circular Buildings Toolkit to embed circularity across the real estate value chain. It can help deliver the rapid, scalable reductions in built environment carbon emissions that we need.

The toolkit focuses on four principles: (1) ‘build only what you need,’ which calls for the reuse and repurposing of assets; (2) ‘build with the right materials,’ including low-carbon and renewable materials; (3) ‘build efficiently,’ which seeks to cut waste across the

supply chain; (4) ‘build for long-term value,’ ensuring that we plan for the building’s entire life cycle and recyclability.

Prototype for a new circular building system

ADPT, designed by Arup and Futur2K, demonstrates how the toolkit can help industry move from adopting a circular approach on a component basis towards an integrated approach. The ADPT design team used the toolkit to embed lessons on flexibility and versatility. Each module can be configured to meet a range of purposes, with flexible floor plans enabling it to respond to current and future needs.

Learnings from this project will be added to the toolkit, showcasing practical learnings and best practices from circular projects around the world.

Real estate value chain: doing better together

The real estate market needs a systemic shift designed to eliminate waste and pollution, circulate materials and regenerate nature. We must enhance cross-industry collaboration among policymakers, investors, real estate developers and the entire supply chain to support this shift.

Naturetech: critical in scaling investment in nature-based solutions

Using naturetech to solve the climate crisis is essential, but more needs to be done to understand how to halt and reverse global nature loss.

Biodiversity is under threat. Nature plays a central role in our collective move towards a regenerative future. As the linchpin for the planet’s health, organisations across the world are recognising the importance of halting and restoring biodiversity loss.

Addressing the complexity of biodiversity

Responsible for nearly 30% of biodiversity loss, firms working across the built environment are grappling with how to assess and monitor biodiversity performance. Ahead of next year’s COP 16 gathering in Türkiye, addressing biodiversity loss is a complex issue. It requires a multifaceted approach: science-based and data-driven solutions offer a starting point.

Naturetech: data shows the way Biodiversity data serves as a critical foundation for addressing the multidimensional aspects of species loss and ecosystem

degradation. Enter ‘naturetech’ — nature technology has rapidly evolved from related climatetech, which received more than $19 billion worth of investment during the first half of 2022 alone. Naturetech is estimated to grow by $6 billion in the next few years. From environmental DNA and genetic analysis techniques to bioacoustics and remote-sensing technologies, organisations can use advanced data collection methods to obtain comprehensive and accurate baseline of data, with information about species populations, habitat quality and ecological interactions.

The integration of ecological models and statistical analyses is enhancing our understanding of biodiversity patterns and trends, facilitating evidence-based decision-making for restoring nature.

Deployment of naturetech

We have been successfully integrating digital, tech and

biotechnology resources across many of our projects at Arup. We invest heavily in our own tech development. As early as 1957, during the build of the Sydney Opera House, we used a computer to help with calculation and modelling. This was the first application of a computer in an engineering project.

We are now using virtual reality to educate school children on the value of biodiversity and encourage citizen science participation. Our water teams are working with a Global DNA specialist on genetic analysis techniques to make them more accessible and affordable, allowing scientists to better understand the genetic diversity of species and populations. The mainstreaming and integration of naturetech within our projects enables us to move from minimising harm to biodiversity to restoring biodiversity.

Paid for by Arup

WRITTEN BY Rory Canavan Associate Director, Natural Capital & Biodiversity, Arup

WRITTEN BY Martin Pauli Global Leader Circular Economy Services, Arup

The aerospace industry needs sustainability-minded individuals who can help it function responsibly and ethically for the environment and society.

Alessandra Badino has always had a passion for sustainability. “Nature is a place where I regenerate and improve my wellbeing,” she says. “I’ve been conscious of environmental issues for a long time.”

Sustainability strategy and ethical practices at work

Badino is now the UK Head of Sustainability and Environment at aerospace corporation Airbus, ensuring that the organisation functions responsibly and ethically with regard to the environment and society. This involves delivering on Airbus’ sustainability approach, which is built around: valuing people, respecting the planet and enabling prosperity.

Badino started with Airbus in 2001 as an aerospace engineering graduate and has worked in various roles — from aerodynamics design, performance and wing testing to

business development. “I’m often asked why I’ve stayed with the company for such a long time,” she says. “I love to learn and constantly challenge myself, developing different skills to keep motivated and interested. Airbus provides plenty of opportunities for that.”

Everyone contributes to sustainability efforts

While decarbonising aviation is one of the company’s priorities, Badino stresses that it’s also committed to reducing its overall environmental footprint — reducing energy consumption and waste on sites and taking a nose-to-tail approach to recycling our end-of-service aircraft.

“Everyone in the organisation has a part to play,” she says. “That includes the wing designers who deliver new technological solutions to improve aerodynamic and weight efficiency — to the engineers working on new fuel

systems and ensuring all our products are capable of flying with 100% sustainable aviation fuel.

“We also need procurement professionals to conduct assessments on potential human rights, safety or environment risks in the supply chain and finance colleagues to develop new business models that incorporate an assessment of environmental impact in our decision-making process.”

Building a workforce with sustainability goals

Badino takes her work seriously.

“Sustainability is not a fashionable topic for us — it’s the right thing to do, and it’s here to stay,” she says. She insists that anyone looking for a career with a sustainability focus should consider the aerospace industry.

“Sustainability is firmly embedded in our corporate strategy; it is at the core of everything we do,” she says.

“New entrants will find there is a sustainability element to any role they take or any skill they develop.

“While we believe that aerospace is an essential part of our lives, we are aware of our responsibility to society and future generations. We welcome people with different views and backgrounds who can make a unique contribution to that goal. It’s only by working together that we can achieve real change.”

Why we put sustainability at the top of everything we do

Paid for by Airbus

Alessandra Badino Head of Sustainability and Environment UK, Airbus

WRITTEN BY Tony Greenway

Financing has been channelled towards ‘trending’ areas such as renewable energy and energy efficiency.

~Roisin Greene, Co-Director, Global Plastic Action Partnership