This Green Business: A Call to Arms

Nicholas Doyle is an old friend of SE², and we're thrilled to see him embark on his journey from Places for People, to his new role as Director at Adecoe.  He's never been one to sit on the fence, so we were delighted when he agreed to share his views on the state of the green industry as our guest blogger. 

I think Nicholas' is a refreshing voice.  Enough with faffing round the edges.  If we want to make a real change - really make a difference to climate change - we have to mean business: "We need to create a new industry, one that is dynamic, innovative, generates its own investment and finds as many customers as possible."  Hear hear!! Ask not what what the people can do for the environment, but what the environment can do for them!

It may have been a Chinese curse to live in interesting times, but right now I think we have arrived at an interesting moment for the green agenda and retrofit in particular. We are, if we believe the growing consensus, now post-recession. Some may argue that we are now also post Green Deal and may also be in post Supplier Obligation. If we lift our heads to view around us, there is lots to see and ponder. So what does this new landscape look like?

Looking back, we can see that only a few years ago the green agenda was still a marginal activity and what was happening either relied on public expenditure or personal motivation. It was the preserve of specialists and it carried an air of being an exclusive activity that was not to be tackled by regular folk doing a regular job. As a subject it had its own language, its own narrative and this often reinforced its own position at the margins as a result. And then something happened. Or more precisely quite a few things happened.

First off, we gained a political consensus on climate change. It was happening and we had to do something about it. We had won our environmental argument. Then the increasing price of oil started a growing awareness of the limited resources we actually had. Whether that was - or is - a peak or not matters less than the fact we gained an economic argument for action: we had demand – where were we going to get the supply from?

In the UK something else happened. We began the debate around zero carbon for new homes. Ironically, where this had the greatest impact was on retrofit as people recognised that we couldn’t and shouldn’t just tackle new homes; it was in our existing homes that by far the biggest challenge lay. Our old leaky homes connected directly with people. And there we had our social argument. All of a sudden we were marching forward, this rag tag bunch of pilot projects, technocrats, social housing, retrofit pioneers, contractors and quangos all marching to the future of large scale retrofit.

And then in the middle of the night on September 15^th 2008 something happened that would send economic shock waves powering across the globe. Lehman Brothers, one of the most successful investment banks in the world, filed for bankruptcy. And the rest, as they will come to say, is history. The impacts were huge and complex but the fundamentals were obvious: the world was plunged into one of the deepest recessions it has ever seen and all bets were off.

And like everything else, the environmental world did not go untouched. But I would argue that it has gained the most from the recession and has emerged in a much better place, if not quite shape, than it was before the recession. Why? Leading up to and through the recession all of the ground work for retrofitting was being put in place. The input of organisations such as the Technology Strategy Board and the extensive work done by social housing providers and those pioneers who improved their own homes, means we know what to do, we know what works. I know there will be those who say we don’t, but I am working on the 80/20 principle – in 80% of cases we know what works and what doesn.t I will leave others to argue endlessly about the remaining 20%.

We are also unburdened by public expenditure. We had become addicted to hand outs and programmes funded by government until we got to the stage when we seemed to have funding looking for a project. People were generating more opinions than action.  It was never sustainable: if this was going to work, it has to stand on its own two feet.

We have also seen mainstream business wake up to the potential of the green agenda. The personal motivation, while useful, was being replaced by the opportunity to generate a return. This has brought in new money, new investors, entrepreneurs and - more importantly - new ideas concerned with delivering what customers wanted and were willing to pay for. And the reason for this is that the fundamentals remain sound. And they are fundamentals that can generate value for investment.

Before I outline this, I would argue that climate change, while now, accepted has no value here. It’s important - in fact THE most important issue - but it doesn’t have the currency or value to help move us forward. What does is the price of energy. It doesn’t matter what anyone says, the price of energy is going up. And fast. The global realities are that there will be increasing demand for energy and the cheap sources we have all enjoyed cannot meet this demand. We will have to look to off-shore sources, shale gas and renewables to meet that demand. And here in the UK we have a massive energy infrastructure cost that is ticking up in the background. The simple truth is that energy is going to get very expensive.

Increasing energy prices will for the first time make large scale investment in energy saving and energy generation possible. Anything that saves energy or generates energy will increase in value. For years the marginal return on energy saving and generation in the domestic sector was simply too low. With increased margins new money, new approaches, new ideas and new entrants will flood in to the market. They are already. We can look forward to a future where ‘green business’ is just ‘business’.

Surely it can’t all be this straight forward. Of course it’s not and there are problems we need to address. While we have been released from the shackles of government expenditure, government still has a key role to play. Government needs to give the framework for business to operate in and above all it needs to give certainty so that business will invest. Whether that’s in new building regulations, housing standards, energy regulation or policies to support the market, we always want government to make the right decision, but more than that we need government to make the decision and stick to it and stick to it for preferably two Parliaments, but certainly one.

We also have a hang-over from before the collapse. The green agenda still has an air of mystery about it. Whether that is a perceived lack of technical knowledge or a fear of not being personally or morally motivated to take action, too many people fear making mistakes. I guarantee you one thing, and this is certainly true of retrofit, people will make mistakes but it’s far more important that people do something rather than listen to the doomsayers, the naysayers, the ’I-wouldn’t-do-it like-that’ sayers! There are too many people who want retrofitting to be perfect. It never will be. It involves two things – homes and people - and they are never perfect. The only way people will gain the confidence to do more is to give it a go and then learn. And we need to do more. Much much more.

And to do this we have to mean business. We need to create a new industry, one that is dynamic, innovative, generates its own investment and finds as many customers as possible. If we do this we will deliver real change and real carbon savings and yes we may stand a chance of tackling the thing that is the most important – climate change. But in some senses that must now become the by-product of this, not the raison d’etre.

So let’s roll our sleeves up and start building this new industry and maybe have some fun along the way. How are we going to make the environment pay? Any new business should start with a business plan and the business plan needs some key elements – so here’s my starter for 10:

 Vision: What is our future position, our direction, our aspiration?

• We want to make the environment the most exciting and dynamic sector in the UK in five years, attracting more new investment than any other sector.

 Mission: Why are we doing this? How are we going to create the value and who are our customers?

• To make the maximum impact and the maximum return
• To reach as many new customers as possible
• To generate new products and services that deliver

 Values: What are the principle that guide our actions?  How do we operate or aspire to operate?

• Don’t ask what can people do for the environment but what the environment can do for them
• The environment is most important issue facing human kind. We must ignore it to deliver it.
• Only delivering what our customers want can deliver real change.

And so we could go on and create and develop our strategy, goals and plans and the resources.  OK I don’t expect many to agree with what I have outlined but that’s great – let’s all work up our own vision for this new industry. It doesn’t need consensus, it just needs people getting out there and doing things and making a good return for doing so.

But the point is this – we have to think of the environment in a different way than we have before. We need to think of the environment as something that we are going to deliver as we would other products and services. We have to think how we are going to deliver them to as many people as possible. We are going to have to think of the new ideas and approaches that will help people get what they want and they need in their lives.

And that is no more true that in retrofit. We have done the research, we are building a supply chain, we pretty much know what works and what doesn’t. What we need to do now is make this pay for business and its customers. We have to create this green business. It is the only way we are going to truly break out of the margins - the philosophical and the moral - and make this a mainstream activity that delivers the large scale change that we so desperately need.

This article first appeared in issue 28 of The Environment Industry Magazine (2013)