The day was always going to arrive when the UK government announced that it would become mandatory for companies in Britain to produce a strategy to reduce their carbon emissions or face fines. That day is today, and we’ve been warning of it for some time.
The Chancellor has announced at COP26 that firms, investors and banks will be forced to detail how they will move towards net zero, an initiative that will be policed by a task force under the control of the Financial Conduct Authority, preventing businesses from “greenwashing” and making pledges that cannot be proved.
And whilst for now this is only focussed on listed companies, it is inevitable that very soon this will be compulsory for all organisations of every scale. This is highlighted by the likes of DeVere Group and Fidelity International’s recent commitment to positioning assets under advisement into environmental, social and governance (ESG) investments, and in the case of Fidelity, divesting from companies that do not show progress towards net zero. Essentially, the impact will ultimately be felt by institutions, funds, landlords and business owners alike.
So once again, it’s time for businesses to not just think about environmental schemes, but as HMTQ said, actually do something about it. Given that there are 250,000 hectares of south facing commercial buildings (predominantly manufacturing, logistics, storage, campus business and industrial parks) in the UK and only 5% are covered in solar – why not start there?
Think about it: solar provides cheap energy and reduces costs; it uses valuable spaces that are otherwise unused; the technology is cheaper and more effective than ever before, such that the unpredictable British weather is no longer an issue; with battery storage, solar helps provide critical secure energy; it can even create a revenue stream; and if it’s funded, then everyone is happy – the landlord, who has no capex nor opex to worry about, and the investor, who funds an honest and compliant green project.
And whilst the government will enforce moves to net zero, it has also taken the decision in the budget last week to exempt on-site solar and battery storage assets from business rates, where the electricity is primarily consumed onsite.
Finally, in the US there is a move for new build commercial properties and tall residential projects to include solar power and battery storage as part of the development infrastructure. Ok so that’s the US, but as we are now seeing at COP26, robust reforms and actions are in play globally, so this type of solar initiative could pave the way for other countries to follow suit with policies that reduce real estate’s reliance on fossil fuels.
It’s time for businesses with commercial premises and space to look above them and around them and realise the capacity of solar as a viable, powerful and cost effective natural source for energising their organisations, fulfilling their obligations to the environment – and inevitably the regulators. Remember, the sun always shines on the righteous.