GC Business Growth Hub’s resource efficiency lead Kevin Lambert, and green tech and services lead Katherine Burden, explain the role Greater Manchester SMEs can play in tackling the climate emergency, and how the Hub can help.
It’s a new year, and everywhere you turn climate change is the primary topic of conversation. The 2020s has already been dubbed the “climate decade” – you don’t need a crystal ball to predict a huge ramping up of action to tackle climate change from governments, businesses and society at large.
The UK has enshrined in law a target to become carbon neutral by 2050, but in the business world and elsewhere, ambition is likely to move even faster. Here in Greater Manchester, the city region has set its own target of 2038 – making it one of the most ambitious cities in the UK and across the world. Greater Manchester Combined Authority (GMCA) is working closely with a range of partners to put an initial Five Year Plan into action, including councils, universities and major employers, as well as national government. However, SMEs have just as important a role to play in delivering on the plan’s objectives.
There are over 100,000 SMEs in Greater Manchester, compared to around 400 non-SMEs. In other words, SMEs are responsible for the lion’s share of the city region’s carbon emissions from business. Whereas the non-SMEs are governed by a suite of regulations and rules that obligate them to take action and report their progress, SMEs rarely have the in-house resources to do the same. Nevertheless, the same pressure to act is filtering through, whether it’s from buyers, suppliers, consumers and activists, or even from your own employees and prospective employees. There is no avoiding the drive to carbon neutrality – those that take action will reap the rewards, and those that sit still will be hit by it whether they like it or not.
Our role at GC Business Growth Hub is to help you to understand your own individual carbon reduction journey through independent, expert Resource Efficiency support. We also provide specialist support to SMEs offering solutions to the decarbonisation challenge, through our Green Technologies and Services sector programme. These two services work side-by-side in helping SMEs to drive Greater Manchester’s transition to carbon neutrality.
Here are some of the key challenges and opportunities SMEs should be looking out for:
Decarbonising the electricity grid
Katherine Burden (KB): In GM only a very small percentage of our energy is produced by renewable sources located within the city-region, so expect to see a push to increase this over the next few years. Models suggest that at least half of all households in Greater Manchester will need solar panels installed for the city region to get close to the 2038 target, along with a further 5.5km2 of solar on commercial sites. There are also lots of emerging opportunities for green tech suppliers that can use smart technologies and local storage to help balance the grid and reduce the demand in peak loads. Existing clients such as Qbots and Urban Chain are great examples of how Blockchain, AI and IoT can help to unlock the true value of our energy systems and we look forward to working with more innovative businesses this year.
Kevin Lambert (KL): Along with solar PV, battery storage is fast becoming more affordable for SMEs and will become more important as the electricity grid decarbonises. We are already working with companies that are using batteries to manage their energy demand and even sell capacity back to the grid. The key thing to remember, however, is that the greenest and cheapest form of energy you’ll ever buy is the energy you don’t use. Since 2016, we’ve helped SMEs in Greater Manchester to identify around £5 million in annual energy savings, and our Energy Efficiency Grant has so far provided over £200,000 to SMEs investing in energy efficiency measures such as LED lighting and manufacturing equipment upgrades.
KL: To reach carbon neutrality, we have to address the issue of gas heating. Whereas decarbonising the electricity grid is relatively straightforward in practical terms, decarbonising heat is a major challenge. This will rely heavily on electrification through technologies like heat pumps, infrared heating and process heat recovery, which we are seeing more and more interest in from SMEs. The government is already taking action to incentivise the shift by gradually increasing the Climate Change Levy rate for gas that is added to business energy bills.
KB: Transitioning away from gas boilers towards low carbon heating technologies such as heat networks and heat pumps presents a major opportunity for our local businesses. At the Business Growth Hub we’ve commissioned research to help us understand the scope and scale of these opportunities and will continue to work with the supply chain to ensure that as the market develops, development opportunities are realised. Wider retrofit measures to reduce the need for heating are also going to be vital. Around 60,000 homes will need to undergo ‘deep retrofitting’ in Greater Manchester every year to hit the 2038 target – this includes insulation to walls, roofs, floors, windows and doors, as well as heating upgrades. The national policies may not be there yet to drive this transformation, but GMCA is actively looking at ways to stimulate the local market and the team are working with partners such as Carbon Co-op and Retrofit Works to drive this agenda forward.
Electric vehicles (EVs)
KL: EVs are certainly something all businesses with a fleet need to be looking at. There are fantastic calculator tools out there that can already help you to investigate whether or not an EV is right for you, such as LoCity and Go Ultra Low. The market for commercial goods vehicles is still in its infancy, but over the next few years will begin to catch up. Expect a step-change in uptake once Clean Air Zones (CAZs) begin to be rolled out in major towns and cities.
KB: Greater Manchester’s Clean Air Plan, coupled with the significant investments being made in the city region’s charging network, make EVs a huge opportunity for green tech suppliers. Many of our clients are looking at charging infrastructure as a viable diversification opportunity for them and we are actively looking at ways to match the local supply chain with market opportunities, including through our Low Carbon Network.
Waste and the circular economy
KL: Carbon neutrality is not just about energy. One way manufacturers can make major carbon and cost savings is by understanding the ‘true cost’ of their waste. This means seeing waste as not just what’s in your skip at the end of your process, but all the added value that went into producing it. We’ve developed a ‘true cost of waste’ calculator to help manufacturers do just that.
Looking earlier in the product design process, choosing materials has also become a key priority for demonstrating high environmental performance. The more progressive businesses are those that are jumping ahead with alternative or recycled materials to offer a lower impact product to their customers. This is just one part of the circular economy – a term you’ll be hearing plenty more of in the coming years.
KB: Natural capital is an emerging sector of the green economy that is set to become one of Greater Manchester’s particular specialities. Natural capital is our stock of ‘environmental assets’ – the services provided to us by nature such as clean air and protection from flooding. Local projects such as Ignition – which is developing financing solutions for investing in natural capital – are creating new market opportunities for green roofs and walls, street trees and other green spaces.
KL: Over the course of this year, expect to be hearing more and more about Social Value. This includes aligning your business objectives with the UN’s Sustainable Development Goals (SDGs), which is becoming the language of sustainability in the corporate world.
Companies that can demonstrate high environmental and social impact will be more likely to secure contracts with public sector bodies and other anchor institutions. These organisations are increasingly looking to support their suppliers in this area, including the University of Manchester – who we are working with to engage their supply chain across the city region.
Posted under General Interest on 22 January 2020