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Beyond carbon: The business case for holistic action

Clare Ollerenshaw • Jun 22, 2023

The latest research by Accelar into the sustainability commitments of FTSE350 companies has been published by SustMeme this week. In a guest blog which is shared below, Clare Ollerenshaw sets out the need for businesses to look beyond carbon in order to take meaningful action to meet environmental and climate targets.

We are grateful to SustMeme for publishing these insights from our research and you can view the original article and explore the latest other corporate sustainability and innovation content here. To find out more about how Accelar is supporting businesses to accelerate the green transition, grow their business sustainably and engage with high integrity UK offset markets, check out our services page or contact Clare Ollerenshaw.

The 2023 synthesis report from the Intergovernmental Panel on Climate Change (IPCC) was underpinned by a pivotal message: this decade represents humanity’s last opportunity to take action to limit global warming to 1.5 degrees. Whilst a large portion of this responsibility undoubtedly falls on global leaders and governments, large businesses and corporations, in collaboration with their supply chains, also have a critical role to play. So, how well are they rising to the challenge?

More commitments made public

Well, in recent years, an increasing number of businesses have been publicly pledging their commitment to environmental sustainability. They have been making some of the right noises. This trend has been driven by a combination of factors, including tighter environmental regulations, growing customer demand for less environmentally impactful products and services, and a genuine desire amongst companies to reduce their carbon footprint and contribute to a more sustainable future. However, when we take a closer look at those commitments, the focus soon starts to narrow.

Narrow focus in the FTSE 350

Accelar carried out data analysis to explore these trends in more detail, looking at businesses on the FTSE 350 Index, which comprises the 350 largest companies listed on the London Stock Exchange. Accelar reviewed the websites of 88 FTSE 350 businesses, analysing publicly stated organisational commitments to managing carbon, working with nature, managing resources and climate resilience.

Of the 88 businesses put under the microscope, our analysis discovered:

58 have made public their carbon commitments;
19 have made public their nature commitments;
25 have made public their resource, materials and circular economy commitments; and
5 have made public their climate resilience commitments.

In terms of the thematic mix of commitments made, our study of the 88 also revealed:

25 have made a public commitment on 1 theme;
37 have made public commitments on 2 themes;
3 have made public commitments on 3 themes, or more; but
23 have made no public commitments, at all.

Risk of ‘Carbon Tunnel Vision’

It was no surprise that the most popular theme proved to be carbon, with 58 of the 88 companies making a public commitment. Especially at a time of spiralling energy costs and a gas crisis in Europe, carbon reduction is undoubtedly one of the biggest challenges for business, today. However, for that same reason, it is all too easy for carbon to become the sole focus of a company’s environmental action plan. This can result in what is known as ‘Carbon Tunnel Vision’.

Carbon Tunnel Vision is where a narrow focus on carbon reduction is pursued almost exclusively, often at the expense of other important areas like circular economy, biodiversity, and climate resilience. There is even a risk of unintended consequences arising out of this unhealthy obsession with carbon. So, in order to achieve effective and urgent climate action, organisations will need to look further than just carbon reduction and embrace a more holistic approach to net zero. By prioritising a broad range of sustainability areas, businesses can achieve effective and urgent climate action while also contributing to carbon reductions. Broadening the scope of commitments to incorporate other key focus areas such as circular economy and biodiversity can bring wider co-benefits for business, over and above just carbon reduction.

As regards biodiversity, our research found that 21% of businesses have made a commitment, which might arguably be seen as a relatively encouraging sign. In the UK, for example, this may increase further as government mandates for minimum Biodiversity Net Gain (BNG) come into place, helping to boost the topic’s profile within the built environment sector.

Much less positive was the data around climate resilience, with only 5 businesses out of 88 having made public commitments on what is now a key issue for business. Climate resilience strategies are not only important in terms of both policy and investors, but practically, as well. By setting resilience targets, companies can proactively identify and address potential risks to their operations and ensure continuity, plus stay ahead of regulatory requirements. This area is set to become business-critical for most organisations within the next five years, which is why a more holistic approach to environmental commitments is not just desirable, but essential.

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Biodiversity Net Gain Comes into Force for Major Developments

By Chris Fry • 12 Feb, 2024

From today, 12 February 2024, all major developments in England are required to deliver at least a 10% benefit for nature (biodiversity net gain). This legislation is the first of its kind in the world, making England a frontrunner in legal requirements that give back positively to nature.

Biodiversity Net Gain: What Developers Need to Know

By Cara Clarke • 24 Jan, 2024

We've put this blog together that will explore the key aspects of biodiversity net gain that developers should know before it comes into force, so you can understand how it works and how you can successfully integrate it into your development projects.

Green Finance Deep Dive Series: Biodiversity Net Gain

By Cara Clarke and Tess Fitzgerald • 22 Sep, 2023

Welcome to the first edition of Accelar’s new Nature Finance Deep Dive series, where we take a regular look at the latest topics in green finance and nature recovery. With a constant influx of new policies and tools, this series aims to cut through the technical jargon and break down the key takeaways and impacts for each topic. Our first article focuses on Biodiversity Net Gain (BNG), a concept that will become particularly significant in the next few months as it has been recently announced by the Government that legislation to bring in BNG as a standardised and mandated policy will be published in November. This feature looks at what developments and opportunities are happening in the BNG space, and what it will mean for landowners and developers. What is BNG all about? BNG in its simplest form is a planning requirement that is targeted at new developments, so that nature doesn’t lose out [1] . It places a requirement so that if a loss of habitat is expected a result of a development, other habitat must be created. Preferably on-site, but if that is not possible then off-site (on-site meaning the land being developed, and off-site meaning land away from the development site). BNG seeks to enhance the overall value of natural capital as part of Defra’s long term nature ambitions. It is introduced to help protect nature and continue the flow of regulating services. It acknowledges the value of the natural environment through the lens of improving wildlife, cleaner air and water, natural flood management, educational opportunities. These are all ecosystem services that are introduced when biodiversity is created. The aim of BNG is not only to increase the amount of biodiversity in England, but also to enhance existing habitats. There has been a 13% decrease in average abundance of wildlife in the UK since the 1970s according to the State of Nature Report [2] . The UK government has introduced new policies under the Environment Act 2021 for mandatory BNG. The Government has said that BNG will become mandatory for all planning permissions in England from January 2024, and for small sites from April 2024. The Act will require that all biodiversity be not only replaced but increased by a minimum of 10% post-development. On completion of the development, the habitat enhancement will be required to be maintained for at least 30 years. The National Planning Policy Framework [3] (NPPF) also sets out the government’s planning policies and guidance on how these should be applied, which incorporates the delivery of BNG policy. Biodiversity units are calculated through the Biodiversity Metric 4.0 [4] tool from Natural England, the Government’s advisor for the natural environment in England. The units represent a measure used to evaluate the amount of biodiversity in a specific area. The metric uses various factors such as habitat type, size, quality, and location to determine value. It is important to note that area habitats are measured differently to linear habitats (such as watercourses and hedgerows), therefore these must be dealt with individually within three separate ‘modules’ of the metric. Units located on-site are the preferred approach and may be generated by local enhancement through means such as habitat creation and green infrastructure. Off-site units may be required if there is an insufficient natural capital opportunity within the development to meet BNG requirements. Statutory credits come into play if a developer is unable to meet mandatory BNG requirements through on-site or off-site units. Defra recently released the guide prices and information on calculating costs for developers buying statutory credits [5] . These credits are valued by habitat type and distinctiveness. The credits range from £42,000 to £650,000 (e.g., for peat lakes) per credit.