2016 marked the latest environment round table hosted by B P Collins LLP - a firm with a strong commitment to the environment displayed though its three partners, Alex Zachary, Alison Taylor and Craig Williams who have a specialism in the area. Notable heavyweights from the waste management and renewable energy sectors also participated including Biffa, Grundon Waste Management and Carbon Statement. Matthew Farrow from the Environmental Industries Commission chaired the discussion, which got to the heart of what matters most in their sectors today.
Matthew began with an overview of the past ten years, splitting the period into two halves. He believed the first marked a positive time for taking action to improve the environment. People and governments were acknowledging that climate change needed to be addressed, recycling rates were up and energy from waste was seeing renewed interest as an alternative to landfill.
‘But the Copenhagen Climate Change summit in December 2009 marked a turning point. There was hope that world leaders were on the right track, but it turned into an acrimonious meeting with almost no progress,’ said Matthew Farrow.
The next few years saw a ‘difficult’ backdrop of commodity prices plummeting, the global recession and a UK coalition government that was holding back on environmental issues.
Fast forward to 2016 and it’s a mixed bag now. On the plus side, climate change talks in Paris last year made reasonable progress with even countries like Russia seemingly more willing to play their part; President Obama announced his Nuclear Energy Package. And in the UK the two main London Mayoral candidates are professing their commitment to the environment.
But on the other hand, energy policy remains uncertain, the UK’s huge flooding problem is still being dealt with on a reactive basis and the government is being taken to court over failing to reach its EU air quality targets. Environmental experts are worried about a potential Brexit and the global economy is concerned over China’s performance in recent months which could bring a slowdown across the private sector.
Against this backdrop, Matthew Farrow opened up the discussion to the table asking if the participants were feeling optimistic about the future. Thus kicked off a vibrant discussion which would cover the merits of government vs private sector intervention in the green sector; recycling targets, Brexit and Smart Technology – all issues pose opportunities and challenges to the round table participants today.
The future’s bright, the future’s green?
Neil Grundon, Grundon Waste Management felt ‘upbeat’ citing that:
‘Companies who stepped up and rolled out CSR and environmental policies in the workplace during the recession are now reaping the benefits. And this commitment appeals to consumers more than ever – particularly the millennials. The commerciality of being ‘green’ is always going to be an important factor when running CSR programmes as businesses always have to watch their bottom line.’
Andrew Hillier, Ice Energy Technologies commented on the renewable energy sector where they’ve faced a ‘bumpy ride’ over the past few years with ‘many competitors going bust.’ But the future is looking more positive, particularly with the government addressing fuel poverty through renewable energy solutions and saving huge amounts of money in the process.
Alex Zachary, Partner, B P Collins noted how the government can certainly be credited for making businesses and the public become more committed to tackling climate change, but due to cost cutting across the public sector, it had to push a lot of responsibility onto to the corporate world with ‘mixed results.’
Government intervention
Taking this issue forward, Bruno Prior, Forever Fuels Ltd, highlighted that once the private sector got involved - after recognising that the industry could be very lucrative - there was huge overcapacity with suppliers flooding the industry. Craig Williams, Partner B P Collins added that his clients were competing with certain businesses that operated without accreditation or approval, which ‘put the reputation of the industry in jeopardy,’ added Peter Charlesworth from Carbon Statement.
Jeff Rhodes, Biffa, welcomed the role that both the public and private sector paid to the recycling industry saying:
‘The government need to do more on the demand side to help create more stable markets for recycling. Without stable demand for secondary materials and whilst raw materials are cheaper, commercial viability remains challenging in the long term. The UK has made good progress in recycling MSW, around 45% now, as is also evidence by the pace of landfill closures – for example, Biffa has around 80 landfill sites but only 9 or so are still open. However, stronger markets are needed to keep this progress going. For residual waste, with the cuts in public sector funding, securing private sector investment is now a big challenge, with energy from waste projects typically costing in the region of £250M to build.’
Private sector commitment
Discussions over the role of the private sector continued with Neil Grundon noting a surge in the number of large corporations at the 2015 Paris Climate Change Summit and this, he believes ‘encouraged some stability.’ Sustainability conferences are also ‘on the up’ as they are right on brand and is a marketing tool for businesses but questioned whether this would still be the case if consumers were not interested in its green commitments?
Andrew Hillier agreed, saying that price isn’t the only key USP with today’s consumers from a property perspective: ‘Making a building more energy efficient might not increase its rental value but it is more likely to be rented out more quickly and secure a longer lease.’
Matthew Ball, Green Redeem Ltd, played down the role of the private sector by adding that CSR was much bigger before the recession, and once it was slashed, it didn’t really made a comeback. ‘Businesses base a lot of their decisions on its commercial value regardless of the environmental benefits’.
Recycling targets
Matthew Farrow then moved the discussion onto recycling programmes and whether England, in particular, would reach its target.
Matthew Ball acknowledged that when the targets were initially set, there was a real drive and concerted effort amongst local authorities to reach them. However, he finds that the targets are now further down the agenda as frontline services are deemed more important. Local councils are also increasingly discouraged to meet their targets as they feel there is a lack of information and understanding around what the penalties are and how they would be imposed if targets are not reached.
He provided a possible solution:
“If the government could provide continuity and streamline messaging around what they will collect and recycle across all councils, this could help with consumer understanding and engagement. Education is key.”
Matthew Farrow, agreed citing Rory Stewart as a minister who has shown strong interest in bringing in a more consistent approach to waste collection services across England.
Brexit
With a referendum just around the corner, Matthew Farrow asked if Brexit would be a disaster for the environmental industry?
Interestingly, most of the participants believed the opposite. Although there would be hurdles to overcome, the majority thought their industries would fair better if Britain wasn’t part of the EU and thought the UK government would be able to legislate the green economy on its own.
Neil Grundon believed that tax simplification is the key for building up the renewable energy sector adding that, ‘at the moment, the UK has one of the most complicated tax systems in the world.’ Bruno Prior, Forever Fuels Ltd added that Sweden's long-term implementation of a stable carbon tax has enabled the country to produce over 50% of its energy renewably.
Jeff Rhodes, Biffa added that the UK isn’t doing badly with its waste targets compared to other countries in Europe, some of whom are still landfilling nearly all their waste. The UK planning system is not so much the problem now as there are over 30 consented energy from waste projects, but securing funding and Government policy support is now the main challenge. There also needs to be more joined up thinking between Energy and Waste policy.
Neil Grundon added that the EU has ‘hammered’ UK based businesses in his sector with EU competition whereas ‘UK environmental companies should be competing on the global stage. EU regulation is holding us back. If we get the policy and taxes right in the UK we could achieve a lot more.’
Overall the table agreed that the UK is still playing catch up to replace the energy produced from coal power stations and this country cannot rely on a single renewable energy source to reach these EU targets. The industry is still in its infancy.
Smart homes
As the latest Consumer Electronic Show in Las Vegas happened recently, all of the global media reported on the next big thing - smart, connected homes. So it only seemed fitting for Matthew Farrow to raise how this new technology could help the environment in the future.
Peter Charlesworth believed that data analysis brought huge opportunities, ‘By understanding energy use and being able to influence it during peak times we enable one of the largest opportunities in the Market. Linking supply and demand with energy cost savings is the key.’
Bruno Prior, Forever Fuels Ltd, looked at how it could change consumer behaviour. ‘If the government doesn’t allow electricity prices to vary depending on supply and demand, there is no incentive to change consumer behaviour.”
Matthew Ball added that the water industry is already doing that. By the installation of smart meters for water efficiency, consumers are conserving more water and are being rewarded accordingly.
Conclusion
A wide range of topics were discussed at this year's roundtable. In 2017, perhaps there will be discussion around the next chapter of Brexit and analysing the immediate repercussions of the referendum on the environment industry. Will the government have created a more comprehensive policy that connects energy and waste? We may even be welcoming a simpler tax system to boost the renewable energy sector.
ABOUT THE AUTHOR
Alex Zachary is Partner at B P Collins.
FURTHER INFORMATION
BP Collins LLP http://www.bpcollins.co.uk/