On 21 September, the Q3 Yorkshire Climate Action Coalition (YCAC) virtual meeting took place.
A key theme of the breakout discussion section of the meeting was how businesses should approach credible energy transition plans.
In this article we explain what credible energy transition plans are and the key takeaways from the discussion.
A climate transition plan outlines how an organisation will move its existing assets, operations and business model to align with the transition to a net zero carbon economy. It is a vital tool to demonstrate to markets, investors and other stakeholders that a business is committed to net zero and climate action
Every business is unique and for a transition plan to be credible, it should reflect where that organisation can make the most impact. Taking inspiration from other businesses can be very powerful, but it is also important to not just “follow the crowd” on carbon reduction steps otherwise significant opportunities will be missed.
Scope 3 emissions measurement can be challenging and driving action on scope 3 emissions is even harder. This is especially true where supply chain members are SMEs who lack the capabilities, data, and resources to meet the demands of larger businesses or public bodies. However, larger businesses should not underestimate the influence that their transition plans and activities can have on key stakeholders such as customers, consumers and their supply chain. Collaboration throughout the supply chain is therefore crucial to delivering credible outcomes.
Expert assistance can help create a holistic transition plan and the specific measures within it. This will prioritise impactful, practical measures that align with long-term goals in the short and medium terms. As an example, experts can help with assessing the business case for rooftop solar or where to place solar panels, but also determining how this might fit into a broader transition plan in conjunction with (or compared to) other measures.
Businesses must build flexibility into their transition plans from the outset so that they can adapt to challenges such as:
The most effective transition plans will regularly evolve in response to changes in the business, technology and regulatory environment.
Businesses would be more likely to commit to credible transition plans if key public policy and regulations were clear, stable, and long-term. Even the most flexible transition plans cannot cope well with substantial policy changes. With stable policy, lenders would gain confidence and capital could be unlocked, resulting in a positive cycle of change.
The bottom line is that while most businesses want to do the right thing, they must make a business case for implementing measures. Fortunately, an energy transition plan does not need to exist out of altruism or as a token gesture. Whilst they may be costly in the short term, the investment is often essential to ensuring business resilience, sustainability, and long term profitability in the future.
The Yorkshire Climate Action Coalition (YCAC) is a group of businesses in and around Yorkshire who collaborate to help one another become more sustainable and have a positive impact in the region and beyond.
Chaired by Walker Morris and Deloitte, YCAC boasts over 100 members from across a range of commercial and industrial sectors, from household names to regional businesses, from manufacturing and heavy industry to financial services and energy specialists.
Membership is open to all businesses looking to proactively engage with the sustainability agenda and be at the forefront of the transition to a green economy; businesses wishing to collaborate with peers in the region to drive climate action and achieve their own and shared goals in sustainability.
Want to know more about the Yorkshire Climate Action Coalition (YCAC) and even get involved? Click here to find out more and explore our YCAC hub.