Getting to net-zero – has Covid-19 opened up new possibilities?

One of the unintended consequences of Covid-19 is how it has forced businesses to implement ways of working that have had positive impacts on both the environment and employee wellbeing. They also happen to be the types of steps that we will need to take if we are going to reduce emissions to net-zero. This has forced companies to realise that some elements of office life and business habits – such as office-based working and business travel – are ripe for change, and presents the potential triple benefit of being more sustainable, enabling more flexible working, and cutting costs. The challenge here is to clearly understand what are the true sustainability benefits, as well as the business impacts, of these actions.

Homeworking is prompting businesses to reconsider whether offices are an outdated way to organise work. From a net zero perspective, home working could prove beneficial; smaller offices mean a direct reduction in scope 1 and 2 emissions. Many businesses may choose to include emissions from home working in their scope 3 emissions – those emissions which occur as a direct of your business activity at sites or assets which you do not control or own. Ultimately scope 3 report is discretionary, but crucial to gaining a complete understanding of businesses true environmental impact. If a significant proportion of a business’s workforce begins homeworking, there is a strong case to be made for including these emissions in an organisation’s carbon footprint.

Homeworking reduces the pressure on public transport networks, takes cars off the roads and produces more decentralised energy demands. That shift in energy demand, however, means rising energy bills for most households, with estimates suggesting that household electricity consumption will rise by 25%. If businesses do take responsibility for home working emissions, is it then the businesses responsibility to reduce those emissions over time? It seems unlikely any firm will invest in improving the energy efficiency of employee’s homes in the short term, but Google just gave every employee $1,000 to buy office furniture for their homes – perhaps in the future, we’ll see businesses providing employee’s with subsidies or grants to install solar panels or insulation? It’s not hard to imagine that, at scale, this could be done in a way that reduced the cost to individuals, through negotiated corporate rates. The savings to be made from reduced office space in expensive city centre location will certainly be significant, whilst the expectations employees place on employers, with regards to CSR, continue to grow each year.

The biggest impact for most businesses, in terms of emissions reductions, is likely to be the drastic reduction in flights taken in 2020. For a firm, flights emissions can account from anywhere from 25% to 50% of total emissions. Business travel emissions have always been the elephant in the room – most people like to fly, preferably in a more carbon-intensive business class, which they often see as a well-earned perk or status symbol. Consequently, it is one area that most businesses struggle to reduce.

People are now using video conferencing technologies in ways that they never have before, prompting us – and finance departments – to reconsider what was previously deemed to be ‘essential’. Even as the economic activity increases, flights are likely to be markedly more expensive in the short to medium term. If businesses have successfully harnessed the alternative technologies available to them for business operations, it will be harder to justify both the cost and environmental impact of business travel when the pandemic has passed. Every business should be aiming to keep travel-related emissions below 2019 levels at a minimum.

Much has been made of the opportunity for a green recovery – the WWF estimate that a well-implemented green recovery could be worth as much as £90 billion to the UK economy. The reality of the recovery will differ from business to business but, at almost every level, we are going to need to re-evaluate the systems we have established. Many businesses will need to make drastic changes to their operations; from the buildings they operate out of through to the supply chains they rely upon, resilience and sustainability will need to be built into the new systems and processes that emerge.

 

Missed part 1? You can find it here.

Daniel Murray

Principal Consultant

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We get that change is not easy. But we must be brave, challenge old ways, set new habits, embrace new thinking.

sustain-ability.
business.
we get it.

We get that change is not easy. But we must be brave, challenge old ways, set new habits, embrace new thinking.