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9 July 2022

Climate Action

Tag(s): Sustainability, Politics and Economics
This week I attended the first annual conference of the Livery Climate Action Group (LCAG). This was launched in March 2021 in response to the City of London Corporation’s climate action strategy. Already some 50 Livery companies have signed up. Our meetings to date have been held on Zoom but this was the first annual conference of the group held in person. It is certainly intended to be annual. It seeks to influence others because the collective carbon footprint of Livery companies is probably not that significant in the overall global scheme of things but on the other hand Livery companies may be able to influence very large numbers of both organisations and individuals through their professional and other links.

Sheriff Alison Gowman has provided strong personal leadership to the Group and introduced the conference by suggesting that the sooner we act the bigger difference we can all make. One tonne of carbon saved today means that 28 tonnes of carbon will have been saved by 2050, the target date for many countries and organisations for net zero. Some have set earlier targets. She said that we can bring leverage over professions and provide intellectual capital. There is not one template, and we can all learn from each other. Already on the Group’s website six livery companies have posted videos describing their approach. The Constructors’ livery company who are setting a good example in this space have recently attracted 12 new members just because of their climate action programme. A Great 12 livery company when seeking interest from its membership found that it got no less than 20 respondents. It seems that progress in this area can add to the relevance of a livery company.

Although this blog will concentrate on the discussions of how this challenge can be met by the livery companies both individually and collectively, it is hoped that it can also point to lessons that all of us can benefit from.

The Lord Mayor The Right Honourable Alderman Vincent Keaveny gave an excellent speech indicating that he and the Corporation as a whole are approaching this with a can-do spirit. The square mile of the City of London has set a target for net zero in the next five years and to achieve this are looking at everything. They are looking for net zero across the investments that they make and their supply chain by 2040 and expect to create 800 new green jobs. They are already only buying electricity from net zero sources, and they have also set tough targets for air quality by 2030. There has already been 40% improvement in air quality since 2013 in the housing estates that they manage. The Lord Mayor normally serves only for one year, so it is imperative that continuity is created, and it isn’t just enthusiasm by one or two Lord Mayors but by them all. The approach that the City has taken to Green Finance is well ahead of the rest of the world with no other financial centre having anything like it in place, though Singapore has now started. The Lord Mayor was in Indonesia last week which is largely a coal-based economy, and they were extremely interested in everything he had to say on the subject. Stationers’ Hall has only just been reopened after major refurbishment which included the installation of a heat pump as a result of which they will reduce their carbon footprint of energy consumption by 80%.

We then heard from Clare Clark, the Head of Sustainability at CH&Co -a catering company that includes several livery halls among its client base. While addressing the issue of how livery halls can improve the sustainability of the food they produce some of her messages were also directed at us as individuals. She surprised me by saying that the UK has the third cheapest food in the world, after only the United States and Singapore and this is largely because of the way we grew our way out of the rationing that we faced in the Second World War. But in the process intensive farming has degraded soil to an alarming degree and impoverished many farmers. Sustainability for the future has to consider economic, environmental and societal factors. Sustainable food needs to be based on biodiversity, intact soils, local sourcing and high welfare for animals. Emissions from food production are estimated to be as much as one third of all emissions. Half of that comes from livestock and its land use while the rest is from other crops and the supply chain.

To reduce impact on the environment requires diverse ingredients, seasonality, zero waste, mostly plant-based foods, minimal airfreight and low farm inputs. Social impact will consider food culture, connection with food (or indeed disconnect), public health and health inequalities. Positive social impacts come from the fact that food is both shared and celebrated. There needs to be better education in food which has almost disappeared from the school curriculum to the point where children think that chips come from the chip tree. In the UK food is the largest manufacturing sector where 4 million people are employed, and its value is over £120 billion but yet it is remarkably inefficient with extraordinary levels of waste. We need to get to the level where people value and respect food, achieve zero waste, source primarily locally and indeed reduce public expenditure.

Clare finished with some suggestions for personal action. These included sourcing local vegetable boxes, switching recipes more often, and only buying meat from high welfare sources. Check certification, look out for the Living Wage logo, go with the seasons and adjust your refrigerator temperature.

We then had two presentations, firstly on benchmarking and baselining your carbon footprint and then on building a sustainability plan.

Rob Casey, a Past Master of the Water Conservators Company, leads the LCAG sub-group on calculating company carbon footprints. There are three scopes that have to be considered. Scope 1 covers your physical buildings such as a hall in the case of a livery company. Scope 2 covers those services that you buy in e.g., power, and Scope 3 effectively covers everything else, including travel to events and investments. But even companies without a hall will no doubt have a physical location which may be a rented office and would need to consider that.

Andy Miles, a Liveryman with the Management Consultants, has extensive experience in the transport industry. His first and perhaps strongest point is that in building a sustainability plan it is very important to get started and indeed to start small. Every action no matter how small will reduce emissions to some extent. One needs to lead from the front with values, actions and attempts to influence your profession. You should form a rapid action team, not a committee, but a small group of 4 to 6 which must have authority and needs to be diverse particularly in terms of age.

You will need baseline data and your carbon footprint including catering and other areas of purchasing. Investments have to be considered as does biodiversity. Transport, water and waste are all factors as indeed are your own activities and behaviours. Andy recommended a 2-2-2 plan,  that is two things that you will continue to do; two things that you will start to do for the first time; and two things that you will stop doing, and again this advice would not only apply to a livery company but to anyone of us. You should set a target of tracking progress over a six-month period and not be overly ambitious and spend months and even years talking about your plan but get on with it.

Flora Hamilton, Director of Financial Services at the CBI, talked about building the ESG business case. She said that sustainability particularly matters to young professionals who are more likely to join your organisation if they can see that you have the commitment to reducing your carbon footprint. But there is also a case of 360° operating as these relationships matter all the way round, not just in recruitment. There are several key policy developments - taxonomies that are classification frameworks; disclosure - from April 2022 all listed companies have to disclose their carbon footprint; transition plans - under COP 26 these are required for financial institutions and listed companies by the end of 2023. The CBI participates in the UK Green Finance advisory task force, but Flora’s most powerful point was that the market is going to influence this as much as any regulation. It has already started to do so. Even if something is not mandated, increasingly throughout the supply chain there will be pressure to conform to best practice or lose your position in the supply chain whether as a supplier or indeed as a customer.

Victoria Hoskins, Investment Director at Rathbone Greenbank Investments, looked at the LCAG from the point of view of stewardship which has been a key factor throughout livery company history and is particularly relevant as we consider Climate Action. From an investment management point of view, it is always important to consider risk. Nothing is much more important than climate risk which could be from drought or from flooding. As we consider the supply chains those companies in which we invest need to look at the cost of insurance against some of these risks and indeed the cost of business disruption. There is the issue of stranded assets, the most obvious example being oil, but we should not simply withdraw our investment from oil companies only to see that the oil is still there, and the pollution continues. Instead, we need to engage with such companies and encourage them to switch their sources of energy to renewable ones while at the same time not selling on the oil but leaving it in the ground. One Danish company, which was heavily based in both oil and coal, has very successfully transformed its business to almost entirely renewable sources while at the same time closing down those fossil fuel assets rather than selling them on. An investor may also develop reputation risk if it is seen that you are investing in the wrong kinds of business unless you can demonstrate your engagement with such companies in seeking change. Climate Action 100 is now becoming much more influential and, for example, has started to link executive pay to climate factors.

Derek Farrell is a Liveryman of the Constructors’ company and has over 30 years’ experience in construction, including significant specialist knowledge in listed and heritage buildings through his work with a number of Oxford colleges. He recommends that livery companies with physical buildings set a target of decarbonising their estate by a specific date. You should start by knowing your buildings, monitoring their energy use, identifying any hotspots and producing a building transition plan. You need to consider how you measure your energy and its sources, your water and your levels of waste. There are resources available to help you with these processes but if you are responsible for a historic building that is traditionally built and may be listed then you would do well to hire a specialist to produce a heritage statement. Derek strongly recommends heat pump technology and says that for one kilowatt of energy that you put in you take out four kilowatts. When asked if this makes sense in terms of return on investment, he says it’s the wrong question. We have to be doing the right things to reduce our carbon footprint. It may actually be quite expensive to install a heat pump, but it will significantly reduce your carbon emissions. You should plan within your constraints of budget and permissions; you should develop a clear timeline and you should identify the big pieces of the jigsaw.

You need to plan preventative maintenance with controls, pumps and lighting upgrades but do not suffer from action paralysis. Your team should consist of a project manager, heritage consultant, planning expert, quantity surveyor and an engineer.

As I said, while the content of much of the conference was specific to the situations facing livery companies, I think there is plenty in what was discussed that is actually generic for whatever organisation you belong to and indeed your own household. It’s clear that the politicians say one thing and do another. It’s clear that many of their policies are really not thought through but that is not an excuse for us not to take action within those areas of life for which we are directly responsible.

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