The Friday Digest: Cost hikes and COP outs

It’s hard to put a positive gloss on this week’s digest so forgive us if we don’t even try.

Two events have dominated the news agenda: the ongoing negotiations at COP27 in Egypt and, closer to home, the chancellor’s autumn statement. Both have been heavy on the misery and rather lighter on the hope.

Beginning in Westminster, Jeremy Hunt struck a sombre tone as he warned of economic headwinds that will force taxes up and government spending down for the foreseeable future. There was some respite for the hospitality sector with a headline £14bn cut in business rates over the next five years which will benefit pubs and restaurants, plus the promise of targeted energy support after April. But it remains to be seen how – if at all – these small crumbs of comfort will compensate for the wider economic pain facing the UK. The Office for Budget Responsibility estimates that real household disposable income will fall more than 7% over the next two years – the biggest fall on record and bad news for businesses that rely on discretionary spending. It is against this backdrop, along with the lack of a broader growth plan, that sector leaders delivered a largely gloomy verdict. “There is nothing to give firms confidence, let alone invest, and we need to see an urgent plan for economic growth and how business will be at the centre of that,” said UKHospitality chief executive Kate Nicholls.

Like Nicholls, British Beer and Pub Association chief executive Emma McClarkin welcomed the business rates relief (although both called for root and branch reform of the system) but warned that “pubs and brewers are still facing a hurricane of costs leaving nothing but destruction in its wake”. A 9.7% increase in the national living wage from April 2023, although welcome for workers, is another cost for businesses to absorb while there was nothing of note from the government to address the labour and skills shortages that are crippling businesses along the food and drink supply chain.

The mood from civil society groups was similarly sober. WWF welcomed “small steps” being taken on the environment in areas like energy efficiency but said “urgent action” was needed to deliver on net zero and nature promises.

The Food Foundation, meanwhile, was heavily critical of the chancellor’s decision to “overlook the wealth of compelling evidence and groundswell of support to extend free school meals” in England which it described as “extraordinarily short-sighted” and lacking “compassion”.

And so to Sharm el-Sheikh where the stakes are arguably even higher. COP27 officially ends today (Friday) but at the time of writing there was little optimism over a positive outcome for the planet as experts saw the prospect of keeping the rise in global temperature to 1.5C slipping away. A draft agreement published on Thursday did not call for a phase-down of all fossil fuels, nor did it include details for launching a fund for loss and damage to compensate the most climate vulnerable countries.

The food system has once again been largely on the periphery of the discussion, much to the frustration of campaigners. A dedicated agriculture day on Saturday delivered some piecemeal commitments, notably the launch of the COP27 FAST (food for agriculture and sustainable transformation) initiative, which aims to increase climate finance contributions for agriculture and food systems by targeting the most vulnerable countries.

Wrap, meanwhile, published a report that highlighted “wild inconsistencies” in circular economy pledges made by individual nations that fail to take serious action on consumption-based emissions and risk undermining climate efforts. Globally, only 79 countries have directly committed to adopting a circular economy through their nationally determined contributions (NDCs) of which 27 are part of the European Union.

As ever with COP, there has been no shortage of nudging and cajoling of businesses to go further and faster to address the climate crisis. The Champions 12.3 coalition launched a new ‘123 Pledge’ to accelerate action to reduce food loss and waste worldwide. The pledge challenges governments, businesses, chefs and other important food system actors to commit to concrete steps that will make reducing food loss and waste a part of their action agendas on greenhouse gas emissions.

Elsewhere, a coalition of 38 leading UK food companies including retailers and foodservice operators marked the first anniversary of the UK soya manifesto by announcing a new set of actions for ensuring all soya used in animal feed in the UK is deforestation free by 2025. These included a commitment to produce a quarterly soya deforestation risk register for UK imports.

Such “landmark” agreements (their word not ours) succeed in grabbing headlines for a few hours but as the clock ticks down towards the end of another climate summit it’s hard to escape the conclusion that the fate of the planet lies in the hands of a small coterie of world leaders. Pick the positives out of that if you can.

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