Covid knocks net zero plans, but firms warned to take action

More than one in two (58%) small and medium-sized hospitality companies say covid has forced them to delay plans to reduce their impact on the environment. The findings are not surprising: imminent priorities lie elsewhere.

Indeed, a report just published by Footprint also shows that three-quarters of foodservice professionals feel sustainability has been side-lined as a result of the pandemic.

What is perhaps surprising is that 59% of those in the SME survey do have a carbon reduction plan in place. This compares favourably to both retail (50%) and manufacturing (57%). Still, 24% of restaurants, cafés and the like have no strategy to reduce their emissions and don’t intend to introduce one.

“We are still coming across so many businesses [that] simply aren’t ready for net zero,” said Therese Gjerde, senior director of global sustainability at World Kinect Energy Services, which commissioned the poll by Yougov.

This was a small survey – 1,021 SMEs, with just 88 from hospitality – but the role these businesses will play in the country’s net zero targets cannot be underestimated. Large firms in the sector are also likely to be grappling with net zero plans. Very few have shown their carbon cutting cards but many are well aware that emissions, as well as modern slavery, responsible sourcing and waste, remain high profile issues for clients, consumers, politicians and investors alike.

BlackRock, the world’s largest asset manager, this week warned that companies that are not quickly preparing for the “net zero transition” will see “their businesses and valuations suffer, as these same stakeholders lose confidence that those companies can adapt their business models to the dramatic changes that are coming”.

In an annual letter to business leaders, chief executive Larry Fink wrote: “… we are asking companies to disclose a plan for how their business model will be compatible with a net zero economy – that is, one where global warming is limited to well below 2°C, consistent with a global aspiration of net zero greenhouse gas emissions by 2050. We are asking you to disclose how this plan is incorporated into your long-term strategy and reviewed by your board of directors.”

In a further letter, BlackRock warned those not sufficiently prepared thatwe will not only use our vote against management for our index portfolio-held shares, we will also flag these holdings for potential exit in our discretionary active portfolios because we believe they would present a risk to our clients’ returns. Conversely, we believe companies that distinguish themselves in terms of their emissions trajectory, transition preparedness and governance will often represent an opportunity for our clients”.

The company predicted a “tectonic shift” as capital was reallocated to sustainable assets. Foodservice and hospitality businesses should take note.

Paul Scully, the parliamentary under-secretary at the Department for Business, Energy and Industrial Strategy (BEIS), said recently that although this a challenging time, he wants “to see the creativity that helps define the hospitality sector put to good use in helping to tackle climate change, by developing and utilising new technologies and processes to minimise emissions and, importantly, waste”.

But UKHospitality’s energy has been sapped by the pandemic (and will be for many months to come). So where will the leadership come from as we head towards the COP26 talks set to be hosted in Glasgow?

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