Stantec UK outlines a development and infrastructure perspective, in response to the UK Government’s Net Zero Strategy

Two weeks before the hosting of COP26, the UK Government has unveiled Net Zero Strategy: Build Back Greener. 

Over a year behind schedule the Strategy draws together three years of segmented sector decarbonisation strategies—as The Road to Zero (July 2018), the Energy White Paper: Powering our Net Zero Future (December 2020) and the Industrial Decarbonisation Strategy (March 2021), and Decarbonising Transport (July 2021)—into a single plan.

Whilst the overarching rhetoric of the UK’s Net Zero Strategy: Build Back Greener relates to major investments into new energy infrastructure, there are a number of hidden messages that directly affect those involved in all development and infrastructure sectors over the next five years, requiring action immediately.

In consolidating the narrative, the Strategy attempts to show how Government will tackle the cross-cutting themes of delivering a net zero economy. The Strategy elevates the need for Systems Thinking to unlock a) the complexities of reinventing an economy backed by fossil fuels, and b) £90bn of private sector investment requirements to create 400,000 new jobs by 2030.

The Strategy itself primarily focuses on what technology Government believes can deliver various pathways to net zero and how that might be funded. The pathways include use of hydrogen, nuclear, electric vehicles, smart power systems and carbon capture technology. These are explored through the different angles of innovation, investment, and capacity to reduce emissions.

All these net zero pathways will affect the future delivery of development and infrastructure in their own way. However, it is easy to be distracted by the mix of messages within the 368 pages and the headlines which seem far beyond most businesses’ sphere of influence. 

Five messages for the planning, design and delivery of development and infrastructure sectors

Hidden in the 368 pages there are some key drivers and principles that will directly affect community development and infrastructure investment strategy over the next five years. Here we explore five particular aspects of the Net Zero Strategy that require immediate consideration:

1)    Government has reiterated its plans for zero carbon development in 2025.

Government has reiterated the delivery of new zero carbon ready building standards in 2025 that will enable buildings to become zero carbon when the power grid achieves zero carbon supply in 2035 (as defined in the Strategy). 

Whilst many local authorities are looking for new development to be zero carbon at the point of construction, Government has now made it very clear that its requirements for new buildings means being net zero ready.

2)    Fiscal measures will drive up costs for carbon intensive materials and suppliers, requiring businesses to understand their supply chain risks now.

The Net Zero Strategy works off a simple ‘polluter pays’ principle. Whether through incorporation into existing carbon market pricing such as the UK Emission Trading Scheme or the Energy Intensive Industry Compensation Scheme, the cost of high carbon materials and businesses will increase—thus creating incentives for the use of low carbon solutions and suppliers. 

As these fiscal measures are introduced over the next five years, understanding and managing supply chain risk now will be critical to manage these supply chain liabilities. 

3)    Financial disclosures on climate change will become mandatory to avoid greenwashing.

This will require publicly quoted companies, large private companies and large limited liability companies to mandatorily report climate related financial disclosures through the Task Force on Climate-related Financial Disclosures (TCFD) methodology. 

Alongside this will be a new Green Taxonomy that will set legal definitions to sustainability activities and investments. This is a move in the right direction to prevent greenwashing.   

4)    Funding will be available for innovation in net zero delivery.

Over £1.5bn of innovation funding will provide businesses with opportunities to de-risk approaches to net zero. Organisations with an innovation strategy—whether relating to approaches to construction, infrastructure investment models, or supply chain management—will be able to apply for support from Government. Alongside the UK Innovation Strategy, it is clear that a systems approach to innovation, covering technology, procurement approaches and business models, is essential to delivering the climate goals over the next decade.

5)    Green collar skills training is a priority for Government, especially in building, plumbing and electrical services to Build Back Greener.

Government intends to invest in education and re-training 6.3 million people into the green economy. Whilst labour availability is often cited in the construction sector as a major economic risk, developing a skills and labour strategy that leverages Government’s net zero training investments would secure resilience in delivering net zero growth.

About Stantec
At Stantec, we use our cross sectoral knowledge to support our clients’ net zero transition. Stantec’s strategic advisory services offer broader business support including skills development, funding and business case creation, corporate governance, advisory and development strategy. 

Please contact our advisory team to find out more:

• Environmental, Social, and Governance Advisory – Jenny Hughes
• Funding innovation and technical skills – Liz Chapman
• Innovation – Andy Porter

Stantec Media Contact                                               
Alicia De Haldevang
Stantec Media Relations
Alicia.DeHaldevang@stantec.com