Brexit is stalling hundreds of innovation projects that could help Britain hit its decarbonization goals.
That’s the conclusion of a new study that covered 400 large business, 120 SMEs and 2000 consumers in the UK.
The report, commissioned by energy technology company Schneider Electric, found that almost a third of businesses (31 per cent) claimed to have delayed projects in the last 12 months and more than one in ten (13 per cent) had cut budgets for key projects due to the political uncertainty surrounding Brexit.
Mike Hughes, Schneider Electric’s UK & Ireland president, said that it is “going to take hundreds of billions of pounds to decarbonize Britain and achieve the UK government’s net-zero 2050 target… and it is clear that the government is looking to the business community to fund a significant portion of the investment required, and alongside cost there is also opportunity”.
But he added: “As our research clearly shows, no business is going to risk committing millions of pounds to projects, particularly those involving new technologies without a stable environment in which to invest.”
The study revealed that while sustainability is now firmly a boardroom issue, the number of businesses choosing to delay projects has increased 25 per cent in the last two years. At the same time, the number of businesses fearing that the cost of implementing sustainable working practices will impact profits, has also sky-rocketed.
The vast majority of businesses (84 per cent) are anticipating a tougher economic outlook ahead, up from just under three-quarters (71 per cent) in 2017. Whilst businesses view sustainability and efficiency as a long-term necessity, 74 per cent fear that implementing sustainable working practices will have a negative impact on their bottom line, up from 54 per cent in 2017.
Schneider Electric said that some 85 per cent of business leaders reported feeling “torn between doing the right thing for society and doing the right thing for the performance of their business – thought in reality the two are not mutually exclusive”. The study found that the average project aimed at tackling waste energy pays for itself in three years, and a 30 per cent reduction in energy use typically equates to a 10 per cent reduction in operating costs.
The study revealed that 81 per cent of businesses reported that access to government grants or funding would help drive sustainability and energy efficiency projects.
The biggest drivers of sustainability initiatives for large businesses are long-term financial stability and improved brand reputation, whilst meeting government sustainability targets and helping to mitigate climate change were also top five drivers.
SMEs were six times more likely to make changes to their business to reduce their impact on the environment only if legislation demands it. Suggesting a tougher line from government may be required sooner rather than later to drive large-scale change.
For consumers the rising cost of energy bills is the number one incentive to reduce energy consumption, with financial incentives from government the number two driver for change. Reducing the impact of carbon emissions for future generations is now a key consideration for a third of the British public (34 per cent) up from 25 per cent just 12 months ago. This is still a relatively low percentage considering the scale of public support to accelerate climate action as demonstrated for example via the school strike movement.
Hughes said: “A range of measures are required for the UK’s transition to a zero-carbon economy. A stable economic and political environment is vital, but education must also be a priority. Whilst the long-term goal is to ensure a sustainable future for generations to come, we must take immediate steps to eliminate waste and drive energy efficiency in businesses, infrastructure and homes. We need to completely rethink our relationship with energy, removing all barriers in our path. We have the means, now we need the will to match.”
You can meet the Schneider Electric team at European Utility Week, which takes place from November 12-14 in Paris.