The Road to Net Zero: how to seize opportunities and manage change
Significant and rapid economic and societal change is needed to tackle climate change. How can we ensure the net zero transition is inclusive and equitable?
Opportunities exist for sustainable, healthier economic growth and costs as new ways to power our homes, workplaces and transport emerge, but there are costs for firms and households.
To date, climate action has received a mixed response from sceptical governments and public protests—heightened by the cost of living crisis—to activism.
and jump considers the insights from a product and service innovation perspective. Here are our takeaways.
🌏 Net Zero is the new economic opportunity of the 21st Century
“Every second job created will be green as part of the Green Transition. ”
The UK government argues that the 'not zero' path and under-investment will lead to de-growth and economic destabilisation, with investment going to other countries that choose to go further, faster—leaving the UK behind.
It created the Green Review report with six pillars and policies to deliver against commitments, such as EV and boiler mandate by 2035, aiding the transition with the necessary infrastructure, skills and people in place.
Why this matters: Net Zero is the economic reality of the 21st Century. Sustainability is a must-have factor when thinking about how we create value.
“Only in about 15 years’ time, will we start to see the real benefits of Net-Zero. ”
⚔ Net Zero can't be part of a new culture war
Today, benefits feel diffuse, abstract, and in the future, while the costs feel immediate. The cost-of-living crisis amplifies these concerns. Carbon taxes are a key example of something that economists love and the public hates. ULEZ is another.
The government needs the social licence — amongst the public — to effect change, i.e., not a top-down imposition through mandates and taxation. MP Chris Skidmore argues it’s about making people masters of their own Net Zero story and destiny.
Despite being on the right trajectory, a key learning is that the UK has focused too much on the cost of transition and not on the cost of not acting or decarbonising.
Hard-to-manage industries and regions must also be targeted. One strategy to achieve this is to work with local Government to set out the vision and roadmaps.
Why this matters: Households need proof that the transition is worth it and that they are equipped to face the future. Net Zero communication and benefits must be upfront and transparent. Putting it in pounds and pence makes it tangible and real.
💎 Whose opportunity is this
“Over 70% of FTSE 100 have signed up for NetZero.”
There is strong consensus amongst the UK business community that we must achieve Net Zero.
However, 80% of UK businesses are SMEs that don't have the capability—tools, information, and technology—and capacity to make the shift. Furthermore, green jobs are typically more skilled and less automatable.
Research across 23 countries shows that those who feel threatened by change are unsurprisingly less supportive. The Government must take the firms and existing workforce on the journey with the right policies.
Why this matters: SMEs are the prime driving force of global economic growth; given their importance for employment, incomes and societal well-being, they need to be prioritised with access to investment, skill sets and products and services that help them adapt. Digital training programmes are one step.
✅ Initiatives should make sense with or without climate change
Net Zero is predicted to have economic, health, and biodiversity benefits, but change needs to make sense in the short and long term — and with or without climate change.
One example is the UK's poor energy-efficient homes recently exposed to energy shocks. How can we ensure more energy is homegrown and from renewables? How can we benefit more from the cleantech strengths the UK has built?
“We can contribute £1.6 billion economically annually if we improve our air quality per the WHO standards.”
We also need to consider demand, not just supply. The cheapest energy is the energy we don't use, e.g., how homes are kept warm and cool. How can firms — fuelled by the cost of living crisis — use that as fertile ground to innovate? For example, providing mortgages to retrofit people’s homes. Simple tips and tricks. Access to credited tradespeople.
Why this matters: Innovation and technology are critical. We must accelerate creative destruction and give it a direction towards sustainability, thereby increasing the nation's resilience and prosperity.
⚡️ To see how these insights affect your business
🙌 Thanks to Dr Liam F Beiser-McGrath, Chris Skidmore, Rain Newton-Smith and Dr Anna Valero and Professor Elizabeth Robinson
