Through the Corporate Leaders Group (CLF) over 100 UK CEOs of businesses and finance institutions are calling on Prime Minister Liz Truss to build economic resilience through the delivery of net zero emissions and restoring nature.
- CLG calls on UK government to address the energy and cost of living crisis in ways that build resilience and long term economic health.
- The letter illustrates the widening recognition of the integrated nature of 21st century challenges.
- As leading industrial figures back system wide change, pressure will grow on those taking advantage of business as usual solutions.
Among the signatories are Amazon, the Co-op, Signify, Zurich Insurance, Coca-Cola, Bupa, IKEA, Siemens, BNP Paribas, Johnston Mathey, Sky and Aviva.
Since becoming Prime Minister, Truss has announced plans to tackle the energy crisis through a number of means. Those of most concern are the removal of the moratorium on fracking and a new round of oil and gas licences. The excuse for these actions is that they are necessary for energy security and to fight inflation.
The problem is that not only will they not work, but they lock the UK into path dependency on fossil fuels. The price of electricity today is based around the gas price, as the provider of most of the UK’s electricity. If there had been sufficient focus on renewable energy as promised well over a decade ago, or there were changes to the UK power pricing system, the cost impacts of energy today would not be a crisis.
There has also been concern from campaigners about the appointment of for former Brexiteer Jacob Rees-Mogg as secretary of state for business, energy and industrial strategy. He has been vocal in his support for fossil fuels, and about his concern about the cost of climate action.
Addressing the energy and climate crisis
The text of the letter from 116 businesses and finance institutions with more than 425,000 employees and a market capitalisation in excess of £1.8trillion, points out what is needed to improve energy security, shield the UK from volatile fossil fuels prices and enable the country to deliver its climate promises. It underlines the urgent need for short and long term government delivery plans for net zero and nature restoration.
The letter states: “As skyrocketing energy bills inflict considerable costs on businesses and push vulnerable households into poverty, we would like to see you prioritise policies that will address this crisis, as part of a robust net zero strategy. […]
“Acting now to accelerate the energy transition, could both support UK households with the cost of living and deliver huge economic benefits, unlocking opportunities for the UK to be a leader in clean growth. Industry experts predict this action could reduce yearly household energy bills in the UK by 7% by 2025, rising to a 50% reduction by 2035.”
As Professor Paul de Leeuw, director of RGU’s Energy Transition Institute points out, “Although the UK government is reacting to the current crisis, UK electricity prices have been consistently higher than the EU average for many years. Indeed the gap between UK and EU electricity prices started to widen significantly from mid-2021 onwards as the global economy recovered from COVID-19 and the impact of the war in Ukraine began to be reflected in utility bills.”
An integrated system approach to the challenge is required
The signatories of the letter argue that restoring nature through a comprehensive environmental improvement plan, alongside a national adaptation plan and ambitious long term targets could set the scene for economic growth and resilience to shocks. Not only that, but it would reduce current threats to both food security and the physical impacts of climate change, alongside the economic and social damage that they cause.
Eliot Whittington, Director of CLG UK said: “The UK is facing severe economic headwinds. The best and only sensible way of facing up to them has to include investing in British renewable energy and helping homes and businesses be more energy efficient. Maintaining and strengthening our focus on net zero and nature protection can help us move beyond the rising costs of fossil fuels and deliver a better economy with more energy and food security, more jobs and greater social equality.”
There is a groundswell of support for action
August 2022 saw a survey by the Confederation of British Businesses (CBI), which found the energy crisis was putting net zero plans at risk as companies reined in green investment in order to manage soaring energy costs. The survey found three in 10 businesses were considering pausing or halting low carbon transition investment unless the new UK government acts to cut energy costs.
Earlier in September 2022 a large group of NGOs wrote to the new Prime Minister calling for the creation of a secure, fair and green future and for the UK to lead on the world stage, while a group of MPs and peers also wrote to Liz Truss to urge her to hold to the UK’s net zero target.
And a new YouGov poll indicates strong business appetite for net zero regulation with 80% of CEOs surveyed in the UK believing that government policies will be required to bring about the changes required for the energy transition.
The signatories to the letter, that also include CEOs from EDF, Triodos Bank, Cory Group, E.ON, Anglian Water, British Land, Amey, Salesforce, Arup and Nestle, and in addition, 12 business groups, including the Advertising Association, Lawyers for Net Zero, The B Team, Sustainable Energy Association, UK Green Building Council, RenewableUK, Aldersgate Group and We Mean Business Coalition, were coordinated by the UK Business Group Alliance for Net Zero (BGA) led by the UK Corporate Leaders Group (CLG UK), convened by the University of Cambridge Institute for Sustainability Leadership.