It’s widely accepted that the world is in the midst of a climate emergency.

Greenhouse gas emissions from human activities, such as transport, power generation and heating are driving climate change and continue to rise.

This issue also sits squarely within Environmental, Social and Governance (ESG) considerations, which are high on the agenda for organisations of all sizes.

Recent experience tells us that businesses across varying sectors are at differing stages of their journey in this area.

A number of clients and contacts are ahead of the game in this regard – typically those who have (and always have had) sustainability baked into their business.

For example, they may have already set their own sustainability goals; attained accreditations such as B-Corp Certification; and developed their own renewable energy projects on-site.

For others, it’s the “E” from ESG – and framing how to take steps to address the issue - that some businesses tend to struggle with.

Organisations more and more need to consider how their business can adapt and be at the forefront of the shift towards a low carbon economy.

Alongside the clear and present need to contribute to climate change action, this also represents a real opportunity – one that should be positively embraced for a number of reasons:

  • Improving carbon footprint and reducing emissions as part of a company’s “green credentials” is a proven route to building business and winning work. Interest is accelerating at pace and companies that adjust now are likely to gain the greatest competitive advantage.
  • Satisfying ESG considerations internally, from investors and from consumers has significant potential to enhance the value of a business. Investors increasingly see ESG compliant companies as less risky. It can significantly benefit ability to recruit as well.
  • Improving energy efficiency reduces costs and ultimately improves profitability.

There are various ways in which businesses can take steps towards reducing their carbon footprint and improving the energy efficiency of its operations. Examples include:

  • the installation of a renewable energy generating facility to supply power and/or heat to a business’ premises;
  • an agreement to acquire power (via a corporate power purchase agreement (PPA)) from a renewable energy source;
  • the integration of new technology;
  • the introduction of energy efficient practices on site;
  • establishing commitments and behaviour change across all aspects of a business however ‘low carbon’ they appear currently;
  • the provision of advice by an energy industry expert.

Different options may work for different business, but the key is for thought to be given to this ever-growing imperative now, and to consider what collaborations and partnerships will help to achieve progress in this area.

We see significant potential in the on-site generation space – where businesses whose operations involve high energy usage are looking at the installation of a renewable energy generating facility to supply power and/or heat.

It’s fair to say that there has been a relatively good uptake in this regard to date. Just a few examples include Tesco’s agreement for the installation of solar panels to provide on-site generation on up to 187 premises across the UK (with solar panel operators including EDF Renewables and Green Investment Group); the installation of a Combined Heat and Power (CHP) scheme by Base Power at the Groupe Lactalis’ Caledonian Cheese Company dairy in Stranraer; and the installation of wind turbines on site by organisations in the food and drink sector such as MacPhie and Mackies.

However, many more organisations will have an opportunity to implement something of this nature, bringing with it a number of the benefits outlined above.

Similarly, there are various examples of agreements to acquire power (via a corporate PPA) from a renewable energy source.

The agreement between AG Barr and Vattenfall and Amazon’s deal in relation to the Kennoxhead wind farm developed by Brookfield Renewable UK are good examples in the UK - and the expectation is that more will follow as renewables development (particularly in the wind sector in Scotland) continues to pick up pace.

This is a critical time for businesses across every sector, no matter what the core business operation is.

It is intriguing to see the approach being taken and the continuing evolution towards a mind-set of having ESG at the heart of every step of decision making.

The team at Burness Paull would be delighted to discuss how action in this area can make a positive difference for your business. Please get in touch to discuss how we can help and you can sign up here to receive our regular ESG updates.