The Department for Business Energy & Industrial Strategy has commissioned a review on how to best deliver net zero greenhouse gas emissions by 2050.
Our key recommendations:
The UK should adopt a ‘Just Transition’ approach. The transition to net zero will require huge changes. Unless negative social consequences are mitigated, and opportunities for jobs and communities seized, these changes will not be possible – in particular, at a time when people are facing rising energy prices, inflation and a cost-of-living crisis. In other words, if it is not a Just Transition, it is not going to happen. For policymakers, this requires
- Establishing a Just Transition Commission to facilitate collaboration across the public, private and non-profit sectors;
- Embedding Just Transition considerations in regulatory frameworks, including the framework and guidance produced by the Transition Plan Taskforce;
- Expediting the development of a science-based Green Taxonomy and mandating alignment and disclosure against it across the economy;
- Developing a complementary framework for measuring and reporting social factors;
- Clarifying pension scheme fiduciary duties to make it easier to invest for positive impact;
- Helping Local Government Pension Scheme funds reach their 5% local investment target, as well as to attract wider investment.
Individuals should be empowered to contribute to solutions. Consumer preferences can strongly influence market activity, incentivising firms to improve their climate, environmental and ‘social’ footprint in return for higher returns and growth. To support this, policymakers can
- Create an ‘impact’ investment label; continue the development of retail green National Savings & Investments bonds with social co-benefits;
- Provide more support for pension savers to invest with social and environmental impact preferences.
Community voice should be key to local investment decisions. The engagement of local communities is key to ensuring that any investment in a place by financial institutions is not only viable but as beneficial as it can be to that specific place – ranging from job creation to infrastructure provision. This requires
- Adequate resourcing for local authorities;
- Encouragement of institutional investors to ensure a strong, genuine community voice in all place-based investment decisions.
You can read our full response below.