After the downturn comes the recovery. At least that’s the theory of how things should pass.
Over the past few months, Government and industry have spoken out on the urgent need for a green recovery based on investment, jobs and growth in the UK’s burgeoning low-carbon sector.
The message has been delivered and Government has sought to get on the front foot by bringing leading industry players around the virtual roundtable in recent weeks to determine what the green recovery should look like and the support mechanisms that need to go into it.
The wider context of the green recovery extends further than a reflex response to the post-COVID-19 world as the Government has promised to level up Britain’s regions, increase productivity, deliver on the many Brexit promises and ultimately create a world-beating net zero economy by 2050.
But like the “57 varieties of Heinz” slogan, green recoveries come in various shapes and sizes.
A case of history repeating?
For seasoned observers, it feels like we’ve been here before, most notably in 2008-2010 when governments first saw the opportunities of renewable energy markets and provided bazooka-like fiscal stimuluses.
The Obama administration provided US$90 billion to promote clean energy through the American Recovery and Reinvestment Act of 2009. This led to a fundamental global restructuring of how renewable energy was financed and developed.
Create the conditions and investment for a market to develop and the ‘invisible hand’ will work its magic, or so the theory goes.
Ten or so years on, it could be argued that this approach has worked as many renewable forms of energy, such as offshore wind and solar, have become developed industries and are moving to a model where they no longer need government support (i.e. “zero-subsidy”).
However, some have argued that the UK fluffed its lines over a decade ago by not being ambitious enough. Nick Molho, Executive Director at the Aldersgate Group, was quoted recently in Business Green: “The UK did not seize the opportunity to transform its economy for the better when it responded to the 2008 Global Financial Crisis.”
With hindsight, it’s easy to conclude that Government failed to deliver a long-term plan for low-carbon technologies to transform the economy.
Now Government has bought into the idea that low-carbon infrastructure and growing industries, such as hydrogen, electric vehicles and retrofitting our building stock, can create jobs and provide a long-term low-carbon economy.
Pressure is also building from a cross-party selection of MPs who, just this week, urged Government to accelerate the transition to net zero to “get the UK on track”.
The idea of a “green industrial revolution” has gained further urgency given the sharpest economic contraction of modern times, as well as rapid global climate change.
As Michael Liebreich of Bloomberg NEF highlighted, we need to remove carbon from our economy at a rate three to seven per cent faster per year than we have been doing in order to meet our Paris commitments.
The post-COVID-19 world has brought a new reality. Months of lockdown have provided obvious benefits. Fewer planes, trains and cars mean cleaner air in our cities. Biodiversity has flourished in many places across the world as humans have retreated. A consensus is emerging for these positive changes to continue.
Importantly, investment continues to pour into renewables and most analysts expect this to carry on, despite the COVID19 pandemic. While the energy sector has been hit hard by COVID-19, the renewables sector is showing remarkable signs of resilience.
How do companies and organisations shape the green recovery?
With Government and MPs making weekly statements about the green recovery, and with public acceptance of renewable energy higher than ever, companies in the energy and environment space will never have a better opportunity to push forward the green agenda.
Government is listening, ministers are keen to deliver, MPs are engaged, and the electorate wants to see the creation of new jobs and industries
The awarding of new funding is being accelerated and made available to companies with new innovations and technologies that progress the low-carbon transition, such as sucking CO² out of the air.
Communications are central to this.
Companies will need to show commitment to the green recovery, showing that they understand the Government’s agenda with a clear strategy and vision, impactful messaging and narrative, and a roadmap on how they are going to deliver, as well as a clear recommendation or ‘ask’ of Government.
One clear lesson is to be bold. Companies can draw on the recent precedent of lockdown lobbying from Manchester United striker Marcus Rashford. His free school meals campaign, as my colleague Evan Byrne noted in his excellent blog, was successful because it delivered a simple but uncompromising ‘ask’ to Government.
Know who the key stakeholders are. The shifting sands of the post-COVID-19 world mean that the stakeholders that a company or organisation might have communicated with in the past might not be the same ones who are shaping the green recovery. Take some time to map the stakeholder landscape and find out who the influential stakeholders really are.
And don’t forget to engage the public on this journey. They are also important stakeholders. They influence the influencers.
More broadly, the green recovery isn’t just a reaction to the post-COVID-19 world, it’s an opportunity to commit your business or organisation to creating a better world – a net-zero world. The promise of new jobs is an exciting one.
Those companies that have committed to net zero, with tangible goals and attainable milestones, have been well received by media. Outlandish net-zero commitments will likely be met with scepticism and negativity, just as “greenwashing” has been called out and rejected in the past. The public will want to see proof of progress as well as sincerity.
There is surely no better time to cement the goal of net zero in the public consciousness than now as people demand greater action to protect the environment, with many inspired by the actions of Swedish teenager Greta Thunberg.
With COP26 taking place in Glasgow late next year, it is also an opportunity for companies and organisations to get a head start on their competitors, positioning themselves prominently in an increasingly crowded space. There’s a business imperative to being ahead of the game on net zero.
The signs are there that, this time, the green recovery will be a defining pillar of the UK and other countries’ post-industrial development. The scale of the economic and climate crisis dictates this.
But this will only happen if leading companies and organisations understand the new reality and seize the opportunities that it has provided them.
Madano advises clients in the energy and infrastructure sectors adapting to the impacts of COVID-19 and transitioning to lower carbon operating models. If you’re interested in learning more, please drop me a line directly at: [email protected]om. You can also follow Madano on Twitter.