Green is the New Gold: How Sustainability is the Key to Profitability
Working towards a more sustainable business is beneficial for all businesses. Becoming more eco-friendly not only differentiates brands and makes them more appealing for environmentally conscious customers but can also help businesses to save long-term costs. For example, by implementing energy-efficient technologies, such as LED lighting, businesses can make significant savings as LED lights last much longer than traditional bulbs, so will consequently need to be replaced less frequently, reducing maintenance costs.
The Sustainability Gap Index is used to measure the gap between a country’s current level of sustainability and its potential for sustainability. This index has been used by businesses to identify where they can improve their sustainability performance and how they can communicate their ambitions and targets with customers. By doing so, businesses can reduce their negative environmental impact and become more socially responsible, which in turn will improve their brand reputation and attract customers who value their sustainability.
There are certain brands that are more likely to use sustainability as a differentiating factor compared to others. For example, customers are more likely to want brands in the luxury sector to be environmentally friendly rather than technology.
Kingfisher Leads the Way in Sustainable Retail
Kingfisher, an international home improvement company, has announced an astonishing 52.6% reduction in its scope 1 and scope 2 carbon emissions since 2016/17. In doing so, they surpassed their science-based target by three years.
Scope one refers to direct emissions whilst scope two relates to power-related emissions. Kingfisher’s success in meeting these targets is largely attributed to its transition towards using 100% renewable electricity, substantial investment into energy-saving measures, and the testing and implementation of alternative fuels in its delivery fleets.
Scope three is associated with indirect emissions. The reduction of these particular emissions has proved to be more challenging than scope one and two. However, Kingfisher still managed to decrease these emissions by 34.1% per million-pound turnover from its supply chain and customer use and therefore is still on track to achieve its target of 40% by the year 2025.
Zero Emission Aircrafts are on the Rise
Emissions from air travel play a significant role in exacerbating climate change, and these emissions are increasing at a faster rate than any other mode of transportation. Therefore, in order to achieve ambitious net zero plans by 2050, sustainable aviation fuels and designs need to be produced to manufacture a zero-emission aircraft.
The UK government have aspirational plans to decarbonise faster than any other G7 country. The government will be working alongside the aviation industry to investigate opportunities for increasing revenue, particularly for the UK sustainable aviation fuel industry.
Sustainable Aviation Fuel (SAF) is estimated to contribute to around a 65% reduction in emissions needed by aviation to achieve net zero in 2050. SAF is a type of liquid fuel that is currently utilised in commercial aviation. This fuel has the ability to reduce CO2 emissions by up to 80%. SAF can be generated from a variety of sources, such as waste oil and fats, green and municipal waste and non-food crops. Additionally, it can be produced synthetically through a process that involves capturing carbon directly from the air.
The UK’s Renewable Energy Sector: A Top Contender in a Global Market
The Renewable Energy Country Attractiveness Index (RECAI) is a report that ranks countries based on their potential to attract investment in renewable energy. Every six months since 2003, RECAI ranks the top 40 markets.
The UK has retained its fourth-place position in EY’s biannual ranking. This position has been maintained due to the UK’s continued commitment to offshore wind, and efforts to use hydrogen and carbon capture technologies. In addition, the UK’s dedication to decreasing greenhouse gas emissions has resulted in the country making significant progress in renewable energy infrastructure and technology development.
The number one spot was taken by the US, with Germany and China just behind. Investors seem to favour the US over other countries as a result of the 2022 Inflation Reduction Act, in which the US committed $369bn to tackle climate change. The act established new tax credit systems for technologies such as electric transport, carbon capture, and clean hydrogen.
UN Guidelines for Net Zero Targets: Corporate World’s Progress Lags Behind
The latest edition of Net-Zero Tracker, a tool that tracks global progress towards net zero emissions, has shown that out of 2,000 of the world’s largest listed companies, only 929 have set net zero targets and 200 of these have only just been set in the last 12 months. This shows that the majority of major companies are falling short of UN-backed recommendations on target credibility, which is an issue that needs resolving.
Sustainable Aviation Takes Off with £218m UK Government Investment
The UK government aim to get the aviation sector to net zero emissions by the year 2050 with their ‘jet zero strategy’.
According to Nusrat Ghani, the industry minister, the government are planning to invest a substantial amount of £218m into R&D for aerospace projects, with the goal of reducing emissions from the sector through innovation.
The funding will be delivered through the Aerospace Technology Institute Programme and aims to generate more high-skilled jobs, develop innovative green landing gear, and enhance the efficiency of aircraft wings, engines and sensors to reduce carbon emissions.
With this generous fund, the government will be supporting over 40 UK-based partners, alongside major companies, such as Airbus and Rolls Royce, that will be leading ten new projects.