Providing principles to help achieve net zero

Mike Cherry

Chair, Federation of Small Businesses

The UK Government has made a legal commitment to transition to net zero carbon emissions by 2050. In 2018/19, businesses were responsible for around 18% of the UK’s carbon emissions.

Now, with the UK chairing COP26 in 2021, all eyes are on UK businesses and industries to play a key role. Business owners want to go green; they don’t want to be left behind. To ensure this, government needs to introduce environmental policies in a way that views businesses as part of the solution, not the problem. Measured, proportionate and timely policy interventions will give businesses a fair chance to adapt and thrive in a low carbon economy.

Implementing The Fairness Principles to help achieve net zero

The Fairness Principles were created to emphasise the need for a just transition to net zero that is fair and empowering for businesses, no matter their size. We are calling for government to take a principles-led approach when developing net zero aligned policy, based around several tests of fairness:

1. Fairness of Ambition: Climate change policies must be aligned to the latest scientific evidence and demonstrate ambition that matches the reality of the challenge, both in its timescales and extent.
2. Fairness of Accountability: Government, alongside regulators, should provide coherent and accountable governance and ensure that climate change policies are coordinated.
3. Fairness of Delivery: Government should, where possible, support, empower and incentivise businesses to find their own ways to net zero, acknowledging that a one-size-fits-all approach to policy delivery may not work in all cases.
4. Fairness of Opportunity: Government must provide a level playing field, ensuring businesses of all sizes, in all sectors, throughout the UK, can contribute to a net zero economy through their innovations, investments, and markets.
5. Fairness of Cost: Climate change policies must be affordable and achievable. Government must ensure that the costs of transition to net zero are distributed equitably among businesses, workers, and consumers, based on their environmental impact, ability to pay, ability to adapt and potential for gain.

These tests provide a robust framework for policy development, allowing the UK to maintain its current domestic and global ambitions while being accountable, credible and fair. They empower businesses to be part of the solution. They provide an opportunity for government and business to form a powerful partnership for good, working together to deliver viable, long-term measures to encourage sustainability, protect society and grow a resilient economy.