Tag Archives: Environment

Climate, News

Why a step by step process to Net Zero is not enough

Oliver Forster, head of business development at ClimateCare

It’s encouraging to see an ever-increasing number of corporates committing to achieve Net Zero status. However, amidst the rush to publicly declare this intention, there remains some debate and discussion about what constitutes a robust and practical corporate strategy for achieving Net Zero.

When talking to clients, they often say that they are working hard to measure their footprint and set reduction targets, but admit that they are waiting to get this right before they take action to reduce and compensate for their emissions. And certainly, whilst these provisional steps are much needed, setting these long-term targets does little for the environmental damage being done right now. Companies need to take full responsibility for all their emissions produced both today and tomorrow. Our advice therefore is to drive actions simultaneously and at pace, and then modify and adjust moving forward. Put simply, we are up against a deadline to tackle climate change, and there isn’t time to take things one step at a time. Ultimately, it is today’s emissions that are causing tomorrow’s climate change and we need organisations to take full responsibility for their carbon emissions right now.

We need to more than halve emissions by 2030; this is equivalent to reducing the current emissions of China, India, the EU and the US combined. To make this happen, we need to use every tool in the box and do it quickly. And whilst this may seem daunting for many corporates, we cannot stress enough that this is achievable. Not only that, if they do get this right, they could well find themselves at a competitive advantage.

First off, companies will need to understand their current emissions. There are multiple ways to do this and third party companies such as The Carbon Trust can be a great help in getting this detail. Ultimately understanding the footprint is the first step in driving change and by doing this upfront work, companies are raising awareness of the issue internally.

After this these companies can then set targets for reduction that are based on science. The SBTi (Science Based Targets initiative) can help a company set appropriate targets. However, this can take time. And it’s time, that sadly, we just don’t have.

As such, during this time, companies should identify and action quick wins too. For instance, they might put an internal price on carbon to focus minds and drive innovation. They might also source as much of their energy as possible from renewable sources, and they might engage their whole team in making immediate reductions and in developing plans for systematic change to reach their reduction targets. All of these are great mechanisms to drive change and raise awareness.

In addition, companies can also consider developing low carbon products or business models. These can help turn climate change from a risk into a competitive business strategy. A recent survey by B Lab UK and ReGenerate revealed that 72% of the UK population believe business have a legal responsibility to the planet and people, alongside maximising profits. As such, we can be sure that it does make real business sense to do this and can make the difference between a consumer buying from a brand or not. And actually, it can also make the difference between a great candidate deciding to work for a company and a firm retaining great talent.

We would contend that offsetting shouldn’t be the final tick on the checklist. Instead we would suggest that firms can take responsibility right away by offsetting their current carbon emissions, whilst they put plans in place for reduction.

For companies to go Climate Neutral by offsetting all emissions through high quality, independently verified carbon reduction (avoidance and removal) projects, is an important component in the journey to Net Zero. It’s something every business can do today. And it’s the only way a company can take full responsibility for its current carbon footprint. This is because going Climate Neutral today compensates for a company’s existing carbon footprint immediately. This status should then be maintained whilst the firm takes steps to reduce its emissions as close to zero as possible, in line with a SBT. In time the size of that company’s footprint will reduce and the amount they need to compensate for will reduce. The organisation will become Net Zero when it reaches its science-based carbon reduction target and compensates for all its remaining emissions. They could then even go as far to work towards becoming carbon negative and take even more of a competitive share.

In going Climate Neutral today, companies can take immediate action right now, whilst they set themselves on course to meet their longer-term Net Zero target. Avoiding the climate catastrophe is not a step by step process, rather it’s a whole host of actions that need to be taken both simultaneously and immediately.

News

Whitepaper finds manufacturing workers are still being exposed to dangerous levels of air pollutants in the workplace

A new whitepaper by Global Action Plan and Zehnder Clean Air Solutions finds the quality of the air in the manufacturing sector continues to be underplayed and not acted upon with workers in the UK still being exposed to unhealthy levels of airborne hazards and pollution. The whitepaper further presents a renewed case for tackling air pollution in industry workplaces with urgent actions for policy makers, regulators and manufacturers.

The whitepaper, titled “With Every Breath We Make: Ensuring Healthy Air for Manufacturing Workers”, identifies:

  • An estimated 440,000 workers with health conditions that are exacerbated by air pollution are still being exposed to unhealthy levels of airborne hazards and pollution in manufacturing workplaces.
  • The presence of airborne hazards causes production issues, product quality and that impacts profit margins.
  • Current regulation allows levels of airborne hazards and pollution that are dangerous to manufacturing workers’ health.
  • Regulation enforcement is not meeting the necessary standards.

Urgent action is required to protect workers who are unable to work remotely given increasing evidence shows that poor air quality worsens underlying health conditions that make a person more vulnerable to complications if they contract COVID-19 and workers in the manufacturing sector are at greater risk of being exposed to dust, toxic particles and pollution.

The most urgent action from the whitepaper, which is supported by the Trade Unions Clean Air Network (TUCAN) and the Hazards campaign, is to call on the government to update regulation to lower the acceptable limits for air pollutants in the industrial workplace, echoing the call from the Institute of Occupational Medicine (IOM) and Trades Union Congress (TUC) that limits be changed to 1mg/m3 for respirable dust from the current 4mg/m3 COSHH trigger.

In addition to the government call, the whitepaper further advises that regulators review exposure limits of all air pollutants, beyond current regulation and in line with new research which finds that airborne hazards can cause health conditions including heart attacks, cancer, diabetes, cognitive function, and depression. This includes launching long-term research programmes which combine air quality monitoring in manufacturing sites with tracking of workforce health issues.

Manufacturers are also urged to review the business case for action on air pollution, with help from the authorities and adopt measures to eliminate airborne pollution.
For an exclusive overview of the whitepaper, regulators, manufacturers and professionals in the health & safety sector are invited to attend a free virtual seminar, “Every Breath We Make – Ensuring Healthy Air for Manufacturing”. On November 5th at 12pm, Global Action Plan and Zehnder Clean Air Solutions will present an exclusive overview of the whitepaper and provide further detail on the latest scientific evidence as well as what manufacturers can do to protect their workers and advocate for better practices in the sector. Additional guests include MP Geraint Davies, Chair of the All Parliamentary Group on Air Pollution (APPG) and Graham Petersen, Founder of Greener Jobs Alliance.

The full whitepaper, titled With Every Breath We Make: Ensuring Healthy Air for Manufacturing Workers, can be downloaded here: www.cleanairworkplaces.org

Chris Large, Co-CEO, Global Action Plan: “Manufacturers are increasingly paying attention to employee wellbeing, especially as workplaces look to become COVID-secure, but the quality of the air and the working environment continues to be underplayed as a foundation of good employee wellbeing. Regulators must enforce lower limits to protect the hidden heroes who have continued to work throughout the pandemic, especially given ongoing research increasingly links poor air quality to the worsening of COVID-19 symptoms. Current regulation continues to allow unacceptable levels of airborne hazards and pollution that are dangerous to manufacturing workers’ health.”

Ben Simons, Head of Clean Air West Europe, Zehnder Clean Air Solutions: “We’ve been working with our clients in the manufacturing sector for a decade now so we’ve come to understand the importance of Clean Air to their businesses. What this report highlights is both the serious health issues that need to be addressed to protect workers but also the opportunities that there are for businesses to take positive steps which in many cases will be more than paid back by increased efficiency.
Given the challenges posed for the sector in this moment, along with Global Action Plan we felt the urgency to share this with as wider audience as possible to give manufacturers the knowledge and guidance to help them understand the changes they can make now to put their business and people in a heathier, more sustainable position for the long term.

We also want to appeal to lawmakers to ensure that these long-term health effects are not ignored in the current health crisis and that we take the time now to set a course for UK manufacturing that supports its successes in the next decade and beyond.”

Hilda Palmer, Hazards Campaign and the Trade Unions Clean Air Network (TUCAN): “The full harm and inequalities to workers caused by toxic chemicals and dust in workplace air is not captured by official figures but is enormous, killing tens of thousands each year, making hundreds of thousands seriously ill. Trade union safety reps using their full legal rights to consultation, involvement in risk assessments and safe systems of work, have reduced workers exposure to many toxic substances, and made union organised workplaces far safer and healthier. We welcome this initiative to increase the rights of all workers to reduced exposure levels and increased enforcement of health and safety law, especially the control hierarchy of the Control of Substances Hazardous to Health, COSHH, Regulations. Workers and trade unions are at the forefront of the fight to eliminate and substitute harmful substances first, use effective engineering controls, administrative controls next, and PPE only as a last resort.

Trade unions in TUCAN want to create cleaner jobs for all workers and citizens by removing unequal exposure to the toxic substances that kill and make them ill.”

News

Loving Earth’s Oceans, the eco-subscription business, marks first birthday with B Corp status

Loving Earth’s Oceans – LEO’s Box for short – has today been awarded B Corp status, recognising the organisation’s commitment to meeting the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy.

LEO’s Box was launched in 2019 in response to society’s over reliance on non-recyclable plastics and aims to provide consumers with eco-friendly and sustainable alternatives to popular household and personal care products. The boxes and their contents are 100% recyclable. LEO’s Box has also developed a charitable link with One Tree Planted, helping customers ‘give back’ in the knowledge that for every box purchased, another new tree will be planted.

Lysander Bickham, the company’s now 17-years old Founder, launched LEO’s Box after partaking in a school sustainability project.

B Corps form a community of leaders and drive a global movement of people using business as a force for good. The values and aspirations of the B Corp community are embedded in the B Corp Declaration of Interdependence.

Lysander Bickham, Founder & CEO, Loving Earth’s Oceans, comments:
“Celebrating the one year milestone is great, and to be recognised with official B Corp status, for all our efforts on sustainability, is just fantastic.
“It has not been without its challenges, and I will always thank my first customer for having faith in us to subscribe. One of the consequences I dread from coronavirus is that we are potentially taking steps backwards in how we tackle plastic use and waste. I know it has been really tough for many people in ways we didn’t expect, but we must also tackle the most critical crises facing us, that of climate change.

“Currently 91% of the plastic we use is non-recyclable, meaning it just ends up in landfill or worse, in the oceans, where there are currently 8.3billion tonnes of plastic waste. This has to stop and I’ve just tried to take small steps to contribute, while giving customers a new way to enjoy quality products, with everyday household uses without compromising the planet.”

News, Technology

CooperOstlund adopts digital oil sampling

CooperOstlund, the UK’s leading provider of gas engine specification and maintenance services, has partnered with Lubetrend to provide clients nationwide with a completely digital oil sampling process.

Via Lubetrend’s bespoke app platform, engineers can digitally scan engine oil samples before sending them off for analysis – reducing paperwork and eliminating inaccuracies. Once analysed, the results are accessible via the app and can be logged for ongoing comparison requirements.

Alongside improving processing speeds, digitising sampling allows CooperOstlund’s engineers to quickly access oil condition reports. This provides faster data analysis for the customer, which can prove vital when dealing with a serious engine issue.

Tim Broadhurst, Chief Commercial Officer at CooperOstlund, commented: “Partnering with Lubetrend to digitise our oil sampling capability is the latest step in an ongoing programme of activity to further improve service capability for clients across the UK.

“The app will speed up our oil analysis process and provide a comprehensive log for ongoing comparison. All in all, a highly effective tool for our engineers.”

For more information about CooperOstlund, or to find out about the company’s gas engine specification and maintenance services, visit www.cooperostund.com.

Environment, News

Waste at home: The countries generating the most household waste

Households globally contribute to 60 tonnes of waste every second, amounting to 2 billion tonnes each year globally. It’s estimated that by 2050, this amount will grow by 70 percent – reaching 3.4 billion tonnes per year.

In 2018, the UK generated around 26.5m tonnes of household waste and recycled just 27% of it – but now we’re mid-way through a global pandemic. We’re staying home a lot more, leading to strain on the services we use for waste reduction. Over 90% of household waste centres have closed in the UK alone, and we have less staff working, more waste (and single-use products), and a 300% surge in fly-tipping.

While our focus shifts to the health and wellbeing of the nation during this time, it’s important to remember that even small steps towards sustainability can lead to big change. To highlight this, packaging retailer RAJA is revealing household habits of some of the world’s leading countries, including how much waste they generate, and how much of this is recycled. They also offer tips on how to help with household waste, including how to reduce it, and how to implement better recycling habits into our daily lives.

Using latest available data from the Organisation for Economic Co-Operation and Development (OECD), more than 20 countries were analysed on their municipal waste, identifying countries with the highest amount of household waste.

This revealed that Germany produced around 37.7m tonnes of household waste, owing to 51m tonnes of overall municipal waste. In fact, Germany, which has a population of 83m, produced around 8m tonnes more waste than Japan who has a population of 126.5m.

After Germany and Japan, Turkey (28.1m tonnes) and France (27.5m tonnes) closely followed. The UK comes in fifth, with 26.5m tonnes, averaging at 0.4 tonnes of household waste per person (based on the UK’s population size of 66.7m).

However, how much of that household waste goes into recycling? Here’s the top performers according to the most recent OECD data for each – and the UK doesn’t even make the list:

  • South Korea – 59.18%
  • Germany – 49.55%
  • Slovenia – 42.52%
  • Luxembourg – 38.03%
  • Ireland – 31.5%
  • Denmark – 31.29%
  • Norway – 30.99%
  • Switzerland 30.87%
  • Finland – 29.14%
  • Hungary – 29.1%

Though Germany, Japan, Turkey, France and the UK are in the top five for producing the most household waste, only Germany was a top performer in its ability to recycle that waste. The UK produced approximately 26.5m tonnes of household waste, but only recycled around 7.2m of that – leaving almost 20m of it to go to landfill. It is a similar story for France, who recycled only 6.9m of 27.5m tonnes of household waste.

Perhaps most surprisingly, however, is two of the 22 countries surveyed that produced the most waste, also recycled the least. Japan and Turkey came second only to Germany in their amounts of household waste produced, yet unlike Germany, failed to recycle much of it. While Japan produces almost 30m tonnes of waste, they recycle only 20% of it. Turkey were the least ‘green’ of all, producing 28.1m tonnes of household waste, and recycling only 3.1m, working out at around 11%.

Tips to reducing household waste and better recycling:

In every country, we can all do our part to help the planet starting with our actions at home. Of course, being conscious buyers is the best way to achieve this – but there are some other ways we can work to improve this:

  • Pass on plastic where possible – latest research shows that only 14% of the 78 million metric tonnes of plastic packaging produced globally is recycled. Of course, a lot of this comes from our food. When you next do a food shop, consider picking up those things that have less plastic packaging;
  • If you must choose plastic, often the supermarket’s own products will have simpler, designs which improve recyclability.If the product you need is plastic and is an ‘essential’ item that you will 100% use, consider buying in bulk to save you from buying smaller items, singularly.
  • Take your own carrier bags to the shop, as this stops you bringing more unnecessary plastic home.

Refresh yourself with the recycling rules

Many of us have good intentions when it comes to recycling, but the rules can be complex. Make sure you check out your local authorities’ rules for what can and can’t be recycled. Some key points include:

  • Always remove plastic bottle lids before putting bottles in recycling
  • Make sure recyclable food and drink materials are clean, empty and dry so they don’t contaminate anything. It can’t be recycled if it’s covered in food e.g. a cardboard pizza box with pizza grease.
  • Combined materials cannot be recycled and must go in the bin – e.g. if your paper bag has a plastic lining, these cannot be separated.

Make space to recycle

Often, one of the reasons we are not recycling enough is that we simply don’t have enough space. This is understandable but here are a few ways to help solve that:

  • Break down your cardboard boxes and squash them as flat as possible so there is more space for other waste.
  • Do the same thing with the likes of aluminium cans, standing on them so they are flatter.
  • Rather than just have a bin in your kitchen, try to have a designated recycling bin in all relevant rooms -such as your bathroom, office and garage.
Business Advice, Energy, News

5 top tips for business owners who want to save money and improve their green credentials

Business renewable energy specialists Opus Energy share their top tips for business owners keen to reduce their carbon footprint and save money

For business owners, managing your energy consumption is no longer just about keeping tabs on your outgoings – it’s a prerequisite for doing business. Consumer-facing companies that aren’t seen to be environmentally responsible face losing customers, while those further up the supply chain are now being asked by prospective clients to prove their green credentials.

Putting sustainability into practice should now be at the top of the agenda across every industry. Companies are becoming increasingly bold in how they communicate this to customers and stakeholders; at the end of January, The Guardian reinforced its commitment to reducing its carbon footprint by announcing a ban on advertising from fossil fuel firms.

For most business owners, however, it needn’t be that complicated. One of the simplest ways to reduce your impact on the planet and improve your bottom line is by switching to renewable energy and being smart with the energy you use. But how do we navigate the sea of information out there and find a solution that truly works for you and your company?

In this article, the experts at Opus Energy, one of the leading providers of renewable energy to businesses, gives 5 top tips on how to become more sustainable and save some money in the process. All of these can be scaled in a way that works for you – no matter what size your business is.

Start small

Implementing more sustainable practices into your business needn’t break the bank. In fact, there are plenty of small steps you can take that, when measured over time, end up going a long way. For example, did you know that turning the office heating down by 1°C you can reduce your annual heating bill by up to 8%? So, if your business spends £500 a month on energy, that small turn of the dial would save you £480 each year – the equivalent of one month’s energy.

Similar savings can be made across other aspects of your business. Take electricity costs for lighting as another example: leaving the lights on in the meeting room never seems like a big deal – but, by using motion sensitive lighting you could save enough energy to make up to 300 cups of tea.

Likewise, using energy-efficient lighting can save businesses about £1,500 a year.

Another tip is to have a company-wide switch off policy. While it may seem trivial, leaving 50 computers on overnight for a year would create enough CO2 to fill a double decker bus – and cost your business £1.76 a day.

Company cars: Choose the right vehicle

While a lot has been said about leveraging the benefits of car-pooling and subscription-based mobility services, the use of cars for some companies is an unavoidable part of doing business. If your business offers company cars to your employees, it pays to ask yourself the right questions when deciding on what vehicles to go for. How long will your drivers be on the road for and what distances will they be covering? Will they be driving in city centres where Clean Air Zones are in place? And if they were to drive an electric vehicle (EV), would they have access to charging points along the way?

Taking all of this into consideration is key in saving money and reducing emissions, as it can make a huge difference in determining the correct type of vehicle necessary.

It’s also crucial that you look at the whole life costs when choosing a vehicle. It’s easy to focus on the headline sticker price – this is often the case when looking at EVs which in the past have carried a heftier price tag – but there are many other costs involved, from taxes and insurance to fuel and vehicle depreciation. So, when you add all of these up, you might find that switching to an EV fleet isn’t as expensive as you thought.

What’s more, EVs are becoming increasingly affordable, so there’s never been a better time to think of making the switch. They offer two solutions at once: reducing exhaust-related emissions and reducing the use of fossil-derived fuels. By switching your business-use vehicles, including fleet vehicles, to EVs, you can make a drastic cut your carbon footprint.

Use a smart meter

The UK Government estimates that installing energy efficiency measures could reduce the energy costs for SMEs by between 18% and 25%. One such example of this is the smart meter, which gives SME owners access to vast quantities of real-time data-related insights into how and where they use their energy. This transparency allows businesses to be smarter and more energy efficient, providing them with an easy way to be more sustainable.

Smart meters are also the backbone of the Smart Grid, which will play a significant role in the UK Government’s commitment to reducing carbon emissions to net-zero by 2050 by ensuring that supply and demand are always in balance. For companies looking to be proactive in their efforts to cut their carbon footprint and play their part, the smart meter is a savvy move.

Invest in renewables

If you’ve already switched your energy supply to a more environmentally friendly tariff or provider, why not look into generating your own renewable power? If you are able to, installing solar panels are a cost-effective way of ensuring the energy your office or building uses is completely renewable.

Making this switch to renewable energy can reduce not only your environmental impact but contribute towards the wider decarbonisation across the UK’s electricity network. It’s also a way for your business to diversify, by bringing in a new stream of revenue. If done right, it can be low effort, high impact and great for the environment.

Think long term

When it comes to saving money through sustainable practices, it’s crucial that we train ourselves to think long-term, rather than simply thinking about immediate gains. The change associated with moving towards sustainability can often be a deterrent for business owners, as there is a perception that these come at a large cost. But making small changes really can pay off in a big way, both for the environment and your bottom line.
Every business is different, but by taking inspiration from the tips above and combining this with your own research, you should be able to find ways that work for you and your budget.

Appointments, News, Northamptonshire

CooperӦstlund strengthens growing team with senior appointment

CooperӦstlund, the UK’s leading provider of gas engine specification and maintenance services, has appointed Dan Walters to the role of Operations Director. Joining the business from renewable energy company Ethical Power, Dan brings more than 30 years’ experience from a career spanning asset management and senior-level engineering roles.

Operating from the company’s UK headquarters in Northamptonshire, Dan will be responsible for leading the engineering team, driving operational excellence nationwide and, ultimately, helping CooperӦstlund to realise its ambitious commercial growth aspirations. Dan’s appointment follows a hugely successful period for the business, which continues to experience c.50% year-on-year client growth.

Commenting on his appointment, Dan said:

“Joining CooperӦstlund at such a pivotal time for the UK energy market is a really exciting prospect. The company has a wealth of experience with leading engine manufacturers and I’m looking forward to further improving customer service for our growing client base.

“CooperӦstlund’s success is built on unrivalled knowledge, impartial consultancy and first-hand experience across every type of gas engine. Nationwide coverage, friendly service and effective call-out response times makes CooperӦstlund the UK’s number one choice for operations and maintenance support. I’m looking forward to playing an integral part in the company’s future success.”

Prior to running the gas engine division at Ethical Power, Dan held a number of senior roles at Clarke Energy during a 13-year stint. Additional experience includes Regional Manager at Lightsource UK, Head of Operations at EON UK and CHP Maintenance Manager at Cofely UK.

Tim Broadhurst, CCO at CooperӦstlund, added:

“With significant experience, proven expertise and unparalleled market insight, Dan’s appointment will prove hugely influential. As CooperӦstlund continues to grow, Dan will play a driving role within our senior team. I look forward to seeing the positive impact his appointment has on the company.”

For more information about CooperӦstlund, or the company’s gas engine design, supply, installation, maintenance and improvement services, visit www.cooperostlund.com.

E-Commerce, Environment, News

Are Woke millennials ignoring the environmental impact of online shopping?

As high street retail continues to deplete and more people shop online, increasing to 19% of all retail sales in December 2019*, a new report by retail marketing experts Gekko shows there’s increasing consumer concern about the environmental and societal impact of this transition and a marked difference in attitude depending on age.

The younger generation may tout their eco credentials but they are more easily lured into wasteful spending and shopping online with over half (53%) of 18-24 and 46% of 25-34 year olds admitting to being tempted into buying things they don’t need online, with just 19% of canny 55+ year olds saying the same.

More than five times as many 18-24 as 55+ year olds admitted to regularly buying goods online that they regret, so return them – 17% versus just 3%. And 45% of 18-24 and 42% of 25-34 year olds also admitted to being wasteful buying items they didn’t want and failing to return them, compared to only 17% of older consumers.

Surprisingly and despite the high profile of Extinction Rebellion and Greta Thunberg, younger shoppers make less conscious choices than some may think about the environmental impact of online shopping versus older consumers. In general, 73% of consumers are concerned about excess packaging associated with online purchase and deliveries and 74% are worried about the amount of single use plastic in packaging.

However, just over a third (38%) of 18-24 and 33% of 24-35 year olds are unconcerned about the use of excessive packaging. This compares to 19% of over 55 year olds. And despite it being such a huge national issue and talking point over the last year, 34% of 18-24 year olds and 31% of 24-35 year olds aren’t concerned about single use plastic, versus 19% of over 55 year olds.

Even the gig economy does not seem to be a problem for the generation arguably most likely to be more exploited by it, with 50% of 18 to 24 years olds unconcerned about online shopping increasing it versus 33% of 55+ year olds. And 44% of 18-24 year olds don’t fret about the impact on the High Street and local economy of online shopping, versus 23% of 55+ year olds.

According to Daniel Todaro, MD of Gekko:

“Younger generations spend more time online and are therefore less inclined to resist that impulse buy. They are far more likely to buy things they regret, order more than one size, items they never intend to keep and send the goods back, but this convenience has an environmental impact.

“The future of the High Street is a vital societal component and offers a more ethical approach to shopping. If you can try before you buy there’s less transport, packaging and waste without the need to order multiple sizes or colours of the same item.

“The High Street sustains the heart of a community, no shops means no point heading to the High Street – there’s only so much coffee a community can afford or want to drink.”

Environment

Less than 10% of UK CEOs have a financial incentive to tackle climate crisis

Less than 10% of UK CEOs have financial incentives in place to be environmentally friendly in their business practices and thus tackle the climate crisis, according to new research from Vlerick Business School. In fact, the researchers found that only 6 per cent of UK CEOs have in their bonus a KPI focusing on the environment, and less than one per cent have long-term incentives focused on this area.

This research comes from Xavier Baeten, a professor in reward and sustainability at Vlerick Business School and director of the school’s Executive Remuneration Research Centre, alongside Vlerick researcher, Bettina De Ruyck. The study examined the pay levels, habits and incentives of CEOs and CFOs in 899 major European companies. The main focus of this was on the STOXX 600 – a stock index of the 600 largest firms across European countries, including 159 UK firms.

Analysis of data on the 159 UK companies by the researchers revealed that over 90 per cent of CEOs were given no financial incentive to focus on sustainability or environmental initiatives. UK CEOs had more incentives – both short-term and long-term – focused around income, revenue and profit, employees, customers, safety, innovation and shareholder return.

Professor Xavier Baeten said,

“There is a general consensus in business, certainly among larger firms, that there is a climate crisis and that different stakeholders have to play a role in becoming part of the solution. They now understand how their practices are impacting the environment, and are actively looking to implement initiatives that focus on being more environmentally friendly.

However, our research shows that for the overwhelming majority of UK firms, there is no incentive for the top CEOs to enact these environment focused initiatives and policies”.

The collated data also shows that though the majority of UK firms have included a least one non-financial KPI into their bonus plan, only 21 per cent of UK CEOs had a long-term incentive that was not related to the profit of the company or returns for shareholders.

Long-term incentives are a much more significant part of the remuneration package in the UK compared with other countries meaning that, according to the researchers, UK CEOs are much more strongly steered towards uplifting the share price compared with other countries. Even though this is the ultimate measure of firm value in the long term, performance shares, a popular part of UK CEOs remuneration package, could very easily lead to sub-optimal behaviour.

Professor Xavier Baeten also said;

“Though there is a clear lack of these environmental KPIs, it would not be effective for governments to look to impose these KPIs to firms. It would be much more effective and beneficial if firms think about exactly how the climate crisis will affect them and then look to first develop a sustainability strategy focusing on what are for them the most important topic of this, taking into account their business. Then, after identifying these, firms can select the relevant KPIs to include in CEOs remuneration”.

The researchers also found other results about UK CEOs in comparison to their European colleagues, including UK CEOs earning significantly more than their colleagues in Belgium, Netherlands, Scandinavia and South Europe and long-term incentive grants being much bigger in the UK compared with rest of Europe. Despite this, 42% of UK CEOs have actually had a decrease in their packages over the last three years – with FTSE 100 firm CEOs’ median remuneration dropping to €3.9m from €4.3m in 2016.

The Executive Remuneration Study by Professor Baeten from Vlerick Business School, has been carried out for nine consecutive years.