The UK’s 2050 net zero goal is now enshrined in law. But despite the government’s recently-published 10 Point Plan, there are not yet clear guidelines for businesses on the part they will be expected to play. We put some frequently-asked questions to experienced energy professional Giulia Usai about how businesses can prepare – and the changes she’s seen in sustainability over the past decade.
Q: The UK was the first major economy to commit to a net zero target in 2019. But we are still waiting for the government to define how we’ll achieve this. What impact do you think this is having on businesses?
GU: A lot of companies aren’t sitting and waiting for the government – many are already taking proactive steps to prepare. For example, at GSK we’ve recently committed to net zero emissions by 2030, as well as having a net positive impact on nature. There is also a growing expectation by customers and shareholders for companies to demonstrate greater sustainability – and most businesses are mindful of reputational risk. So I think while more clarity would be useful, there is still a lot businesses can do right now.
Q: As an energy professional, how has the increased focus on sustainability impacted you?
GU: My role involves looking far more at energy efficiency and renewable projects than in the past, with a lot more focus on renewables in the last five years. For example, at GSK, we’re working towards 100% renewable energy by 2025. It’s also become much easier to ‘sell’ sustainability-related projects within the business.
The cost of technologies is reducing so the payback is shorter, and there is also far more awareness and understanding about sustainability and climate impacts. Ten years ago, I often had to explain what Climate Change was. In addition, I’m finding other teams and departments from around the business are coming to me to ask about making more sustainable choices in their own areas.
Q: What do you see as the key challenges working towards net zero targets in the current business climate?
GU: The biggest challenge for many companies is influencing their supply chain, where typically >70% of their emissions sit. One company is often only one ‘customer’ in a long list of many. So it will take collaboration and alignment to drive change in complex supply chains. There is also a gap where the technologies we need are not yet mature enough – for example low-carbon alternatives to heat. So we have to watch and wait, which can be frustrating.
Q: Do you see any business benefits to becoming net zero?
GU: Yes. Reputation, cost savings, and doing the right thing for the environment.
Q: What do you believe are important factors to consider when devising a corporate net zero strategy?
GU: Understanding and measuring your emissions is the key initial step. One of the first things I learned when studying for my Energy & Environmental Technology MSc was if you can’t measure it, you can’t manage it. Other important considerations include:
• Energy reduction projects to reduce baseload and deliver cost savings.
• Buying renewable energy from reputable sources (eg with a UK Renewable Energy Guarantees Origin (REGO) certificate or EU Guarantees of Origin (GoO) certificate, which provides an auditable route back to source of generation, to avoid double claims).
• Installing renewable energy on-site if you have suitable space available (for example, a south facing field with no shade is ideal for solar PV).
• Power Purchase Agreements (PPA) to secure further renewable capacity. The benefit is that these often deliver ‘additionality’, where new renewable electricity capacity is added to the network that would not have existed without the PPA investment.
• Good quality carbon offsets (GQCO) to cover emissions that cannot be removed or reduced (for example heat).
Q: What is your view on carbon offsetting?
GU: Ideally, companies should be limiting energy use and supporting renewable energy. But in the area of thermal energy, for example, there are currently limited viable alternatives to natural gas and the resulting emissions. Some companies also have to deal with emissions from large commercial transport fleets. So I think we need to be realistic and pragmatic. We’re simply not yet in a position to remove 100% emissions from all business operations or the wider supply chain.
Indeed, the science behind meeting the Paris Agreement shows both reduction and removal are needed to mitigate the worst impacts of climate change. While technology develops to remove carbon (such as capture and storage), there are also nature-based solutions which both support carbon removal and health benefits to society. Offsetting is therefore a necessary step. But I’d advise looking for reputable sources. For example, projects accredited by third parties according to internationally recognised protocols (i.e. Gold Standard (GS), Verified Carbon Standard (VCS) or the UN’s Clean Development Mechanism (CDM)).
Q: When you procure energy, how do you balance cost efficiency with environmental credentials?
GU: In the past, green energy was not cost efficient versus buying brown energy. But costs have come down considerably. At GSK, we recently announced a corporate commitment to source 100% of our electricity from renewable sources by 2025. However, as demand for green energy increases, it’s important to ensure that any renewable you procure comes from a credible source and has not been mis-sold. For example, when purchasing green certificates (eg REGOs in UK), look for certificates that adhere to Scope 2 GHG emission protocols guidance to ensure there is no double counting, and also get them independently audited.
Q: How has understanding of sustainability and the need to reduce emissions changed since you started your career in energy 12 years ago?
GU: These topics are finally getting the attention they deserve, with a groundswell of awareness and an ever-increasing focus. The younger generation – in particular millennials – have a much better understanding of sustainability and are far more likely to scrutinise the companies they want to work with or buy from based on their sustainability credentials. For example, when I worked for Arcadia, we found that our shoppers wanted to feel positive about the provenance of their purchases. So companies are having to respond to this demand to stay competitive.
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