ESG News
GOVERNMENT’S MISSION ZERO REVIEW RECEIVES MIXED RESPONSE
Some investors are impressed by the government’s net-zero review, but others want to expose its flaws. Andrew Holt took the temperature.
The government’s Mission Zero review written by Conserva- tive MP Chris Skidmore has been given two cheers from inves- tors and other industry participants.
In the plan, Skidmore – who signed the UK’s net-zero pledge into law – makes 129 recommendations covering the role busi- ness can play, making better use of infrastructure to cut harm- ful gas emissions and build more energy efficient properties. Substantial investment in the UK’s energy infrastructure is envisaged in many of the missions and recommendations. Each recommendation, said the report, is designed to maxim- ise investment, opportunities and jobs – all while working towards achieving legally binding targets to reach net-zero car- bon emissions by 2050. Jacqueline Jackson, head of responsible investment at London CIV, praised the review and said Skidmore provided a “robust, rigorous and encouraging report on the economics of the UK’s net-zero transition”.
“What resonates is the demand to replace ‘stop-start policies’ with the clarity, consistency, certainty and continuity of policy needed to spark confidence in investors,” she added. Jackson identified local authorities as having an important role. “Local authorities are the key to unlocking the UK’s net-zero goals and should Skidmore’s recommendations come to fruition they could play an exciting role in implementing such policies.”
Economic case James Alexander, chief executive of the UK Sustainable Invest- ment and Finance Association, was equally upbeat. “We very much welcome the ambition outlined in the Skidmore review and the clear, persuasive economic case it makes for net zero delivery in the UK,” he said. Greater policy clarity is one recommendation which could appeal to investors Alexander says. “The unclear policy land- scape continuing to be a major barrier for our members in driving lending and investment towards decarbonising the economy.”
Alexander added that it was imperative to seize the moment. “We would urge government to meaningfully engage with its recommendations for the real economy and financial services, and to more clearly recognise the enormous short and long- term economic benefits of the UK’s transition.” Professor Lord Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School
of Economics, was also positive about the review. “It [the review] correctly highlights the critical importance of govern- ment creating an environment that is conducive to investment by providing clarity, certainty, consistency and continuity of policy,” Professor Stern said.
Clear disconnect But environmental campaigners approached the proposals with scepticism. Mike Childs, head of policy at Friends of the Earth, highlighted that there was a disconnect between the gov- ernment’s approach to net zero and the report’s stress on urgency.
“Climate hasn’t been a focus for Rishi Sunak throughout his years in government, and the approval of a new coal mine in Cumbria suggests it’s still not among his top priorities,” Childs said. Fergus Moffatt, head of UK policy at responsible investing campaign group ShareAction, went further in his criticism, cit- ing contradictions within the report. “While the report recog- nises the immense economic opportunity net zero presents to the UK, [Skidmore’s] recommendations simply don’t match this ambition,” he said.
“This review should have included measures that not only incentivise green investment, but disincentivise investments in fossil fuels – such as the introduction of one-for-one capital requirements.”
Clear policies And Isabella Dowd, head of climate at charity WWF-UK, while broadly praising the review, warned that words needed to be met with action. “We need to see clear policies and long-term commitments to deliver on targets that allow business and industry to forward plan and enable them to act, alongside a strong focus on agriculture, as we cannot meet net-zero targets without this,” she said. Helen Clarkson, chief executive of the net zero-focused not-for- profit campaigning body the Climate Group, had a similar warning about following up words with action, providing her own ‘must do’ list “The UK government must go full throttle and invest in innovative renewable energy projects, break down barriers to electric driving by upgrading the grid and infrastructure, stimulate zero carbon steel and concrete – all of which will drive new green technologies and jobs.” The issue of action is a pertinent one. As the review can be seen as reflecting a long-standing agenda pushed for years by John Kerry, the US special presidential envoy for climate, which eventually found its way into law by the US govern- ment’s landmark Inflation Reduction Act – passed last year after much debate. The UK is now under pressure to follow up on these measures, with a much smaller budget.
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