The impacts of climate change are clear (flood risk, overheating risk, food and water security). Forthcoming regulations [1] will require organisations to evaluate and mitigate the risks that climate change presents to their operations. However, the regulations will also require organisations to examine the potential opportunities. At the moment the regulations are for larger organisation, but it’s just as well for other size businesses to do the same. Here are opportunities we’ve seen, in order of magnitude of opportunity:
1. For-profit business – increased sales revenue. There is a growing demand for “ethical” products and service and businesses like Unilever and Ikea have seen increases sales as a result of having a sustainability ethos. Increased sales far outweigh the financial benefits of simply saving energy.
2. For social landlords the equivalent to sales revenue is increased rent through reduced voids and rent arrears. There are also experimental business models that may allow you to gain income from homes that are more energy efficient. Generating and supplying your own power to residents is also a potential opportunity.
3. Attracting ESG investment is already being seen in the UK social housing sector and will impact other sectors all around the world. Investors around the world are keen to show the non-financial benefits of their investments. At the moment some investors are offering favourable rates of interest. But the outlook seems to be that organisations won’t get investment at all unless they demonstrate some kind of value for society, which includes mitigating and adapting to climate change. Re-financed loans or investment in new ventures generates huge incomes for organisations.
4. Staff recruitment and retention – there is increasing evidence that existing staff are more likely to stay with an organisation if the company has a good sustainability ethos. Recruiting good quality employees is also easier for ethically good companies. When you start adding up recruiting time and time for new people to learn their job, this can quickly add up to a lot of money savings.
5. Operational savings – by examining your business through the prism of a good environmental report [2] all sorts of unexpected opportunities spring up. Here’s a few our clients have reported:
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- Reduced maintenance costs for energy efficient homes [3]
- Avoided “malicious car damage claims” through vehicle tracking of your fleet
- Reduced flood risk insurance premiums
- Efficient communal heating design prevents overspend on systems that are “too big” and avoids the correctional costs of dealing with overheating
- Water pipe leak detection
- Remote inspection of fire systems [4]
6. Lastly, reduced energy costs to the business. Unless your business is a huge energy consumer (think steel works), then your energy costs are likely to be a small part of your overall costs, but hey, a saving is a saving! And with rising energy costs, these are now more likely to be significant.
Whether you are a social landlord or a for-profit business, have a chat with us to explore the opportunities open to you, explore environmental and/or TCFD reporting. [email protected]
[2] https://shiftenvironment.co.uk/news/6-things-you-need-for-good-environmental-reporting/
[3] Download “Touching the Voids” from here: https://shiftenvironment.co.uk/publications/
[4] https://shiftenvironment.co.uk/news/using-iot-to-step-up-your-carbon-reduction-efforts/