Sustainable Living - Q1 2022

Q1 2022 | A promotional supplement distributed on behalf of Mediaplanet, which takes sole responsibility for its content

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Sustainable Living

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“Technology has the power to transform efficiency, create new business models and boost productivity.”

Julian David, CEO, techUK

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“Critical minerals and metals will play an essential role in achieving the green energy transition.”

Sheila Aggarwal-Khan, Director, Economy Division, UN Environment Programme (UNEP)

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IN THIS ISSUE

“If we are to meet our climate ambitions, we must invest in making buildings greener and more efficient.”

Atsuhito Oshima Senior Policy Analyst, The Organisation for Economic Co-operation and Development (OECD)

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Conscious consumerism:

The role of tech for sustainably minded consumers Technology has the power to transform efficiency, create new business models and boost productivity. Recent innovative trends are influencing the transition to a more socially and environmentally conscious form of consumerism.

“A lack of common criteria defining what constitutes a sustainable investment has been a challenge.”

James Alexander CEO, UK Sustainable Investing and Finance Association (UKSIF)

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“Circular business models are expected to continue growing as people increasingly adopt new ways of accessing fashion.”

Marilyn Martinez Project Manager, Ellen MacArthur Foundation

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echnology and innovation have been cited consistently as the solution to the climate crisis.

However, there has been some scepticism over its ability to deliver on its potential, with critics citing greenwashing, the energy needed to crunch massive amounts of data and the linear model of consumption.

While techUK recognises that serious reductions in emissions and a more circular model for supply chains is required urgently, we are pleased that tech is making significant steps to influence the consumer side of the equation.

Rise of second-hand markets One such example is the emergence of second-hand markets, a step towards a circular model for devices. The reselling, refurbishing and repurposing of tech has a multitude of benefits, including reduced shipping and ‘embodied emissions’ associated with manufacturing, keeping resources in the ground and reducing e-waste.

Socially, circularity gives lower-income consumers access to high-spec devices and creates a buffer in the face of supply chain shocks. However, there are challenges to overcome.

Consumer research from Material Focus shows data privacy is the main concern and, while the sector has reliable processes for data wiping, it is still an issue.

The data around the size, type and scale of used tech is lacking with numerous online platforms, informal passing on of devices and traditional retail all adding up to a large, but unknown, number of devices being sold.

Socially, circularity gives lower-income consumers access to high-spec devices and creates a buffer in the face of supply chain shocks. has increased, meaning people are keeping their tech for longer. This is made possible by the invention of over the air updates, more modularity, innovation in repair and higher quality manufacturing in the first instance.

Put simply, devices are being designed and built better, with circularity and durability built-in, coinciding with the ability of manufacturers to maintain and improve the performance of devices in the hands of consumers.

The transformation of consumer tech markets is just one important facet of the activities that the tech sector is undertaking to fight the climate crisis. techUK is encouraging members to sign up to the Race to Zero campaign, advocating for industry-led action to change behaviour in consumers and other sectors.

WRITTEN BY Julian David CEO, techUK

Slowing rate of consumption The tech itself has also overseen a slowing of the rate of consumption and an increase in remote service improvements. The average replacement rate for devices

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AWS is committed to building a sustainable business for our customers and the planet.

A new tool to help monitor your carbon footprint Global businesses are turning to the cloud to embed sustainability into their core strategies in order to build their brand identity and help their customers make sustainable choices.

S INTERVIEW WITH Christopher Wellise Director of Sustainability, Amazon Web Services WRITTEN BY Mark Nicholls

Paid for by Amazon Web Services

ustainability is no longer simply an admirable attribute of a company’s profile - it is an essential part of a successful company’s strategy and identity.

Customers, suppliers and governments increasingly expect businesses of all sizes to embrace sustainability into their philosophy, protocols and policies. Organisations are increasingly turning to digital technologies like cloud services to help them achieve their goals.

A demand for data Data, technology, IT infrastructure and people are critical to support both a digital and sustainable transformation, explains Director of Sustainability at Amazon Web Services (AWS), Christopher Wellise. As organisations - whether small firms, large enterprises, or governments - embrace digitalisation, they are “embedding sustainability into their operations, and digital services,” he says.

“Once they figure out what they can do operationally to improve sustainability for their own organisation, they begin to look across the entire value chain of their operations.”

This trend has reached an inflection point in the last two years, he adds, where customers want more data to drive sustainability decisions. Data that allows them to map out and measure their impact and take the actions needed to reduce their environmental footprint.

Embedding sustainability into strategy Wellise, who has spent his career helping organisations to become more sustainable, says that as a cloud provider, AWS offers a range of services and tools that help its customers innovate as well as meet their sustainability goals and those of their own customers.

“We integrate sustainability into our strategy; from the way we purchase and consume energy, the way we design our architecture, the way our data centres are built, how we improve utilisation rates within our infrastructure, to the way we limit our use of energy, water and other resources,” he says.

Studies by 451 Research, part of S&P Global Market Intelligence, estimated that running business applications on AWS Cloud, rather than on-premises enterprise data centres in Europe, could reduce associated energy usage by nearly

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80% and carbon emissions by up to 96% for many businesses when AWS purchases 100% of its energy from renewable sources.

“We have achieved this through higher server utilisation rates but also through innovation, such as our Graviton processors, serverless compute, and designing cooling systems that reduce energy and water use, and using real-time sensor data to adapt to changing weather conditions.

“Amazon is already the world’s and the UK’s largest corporate purchaser of renewable energy and AWS is on a path to powering its operations with 100% renewable energy by 2025, five years ahead of our original 2030 target” says Wellise.

New carbon footprint tool Now, with the recent launch of the customer carbon footprint tool, organisations can use a dashboard to visualise their carbon footprint in relation to their usage. The data and insights it delivers allows them to make more sustainable choices and is already being used by tens of thousands of customers including Salesforce, Pinterest and Veolia.

The tool complements the six pillars of AWS’s Well-Architected Design Framework, which includes sustainability.

The Framework contains design principles, operational guidance, architectural and software patterns, allowing customers to understand their impact and adopt more efficient hardware and software offerings and reduce downstream impacts of cloud workloads.

Saving water While carbon and climate is top of everyones mind, increasingly water is becoming and important and scarce resource - so wherever possible, the company use efficient evaporative cooling technologies to keep their data centres cool. For example, this means, for more than 95% of the year, AWS uses no water to cool their data centres in Ireland. For the few hot days Ireland does see, they use a minimal amount of water to cool the air that removes heat from their servers.

“We know there is increased demand for sustainability-related services from our customers because it is important to their customers,” he says.

“We are committed to building a sustainable business for our customers and the planet.”

Scan the QR code to access the customer carbon footprint tool

Find out more at aws.amazon.com

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public buildings, 61% require higher energy efficiency than those demanded nationally and 27% call for net zero emissions. Many cities like Geneva and Vienna have started to require higher energy performance in public buildings and subsidised housing.

Investing in better buildings is key to achieving net zero Nearly 40% of global CO2 emissions come from our buildings. In large cities they account for nearly 70%. Our buildings may hold the key to achieving net zero.

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urope’s buildings contain more than 30,000km2 of floor space - an area comparable in size to Belgium. Much of it is old: about 65% of Europe’s residential buildings were constructed before the 1980s. Yet while we treasure the look and feel of many of our historic buildings, they could be costing the earth.

If we are to meet our climate ambitions, we must invest in making buildings greener and more efficient.

Europe’s surging energy prices remind us that there are other reasons to do so. In the UK, regulated fuel prices will rise by 50%, stretching the budgets of vulnerable households and raising the threat of fuel poverty.

Local leadership can make the difference Our cities and regional leaders have an important role in greening our buildings. Subnational governments are familiar with local building stock, hold regeneration funds and enforce building and zoning regulations. Of the cities and regions that responded to the OECD Survey, 86% already have plans to improve energy efficiency in buildings.

Setting the pace Subnational governments directly own and manage many buildings – accounting for 20-30% of all nonresidential building stock in countries such as France or Japan. Encouragingly, 95% of surveyed cities and regions have energy efficiency policies for their

Collaboration is key Yet there is a need for greater ambition.

Only 65% of those surveyed apply building energy codes to existing buildings. Tackling the existing building stock will require all to act. Of surveyed cities and regions, 76% are working to engage citizens in the effort and more than half engage a variety of stakeholders including utilities, construction and architecture firms, academic institutions and non-profit organisations.

In the Netherlands, the national government has taken a multilevel governance approach to transform 1.5 million homes from gas to low-carbon heating by 2030. Municipalities are in charge of planning and coordination of pilot projects at the district level, while national and regional governments support them through knowledge sharing, financial support and regulations.

Greening the huge building stock is a daunting but necessary task. To succeed, we will need local leaders and governments to mobilise governments, citizens and firms. We need to start now.

WRITTEN BY Atsuhito Oshima Policy Senior Analyst The Organisation for Economic Co-operation and Development (OECD)

It is time for stronger environmental regulation in the mining sector Against the backdrop of a rapidly expanding mining sector, environmental due diligence and responsible sourcing will be key to make the global green energy transition sustainable.

S WRITTEN BY Sheila Aggarwal-Khan Director, Economy Division, UN Environment Programme (UNEP)

lowly but steadily, the transition to green energy is gathering pace. Despite COVID lockdowns, the share of renewables in global electricity generation jumped to 29% in 2020. The market for electric vehicles is growing even faster. Over six million electric cars were purchased in 2021.

However, to reach the goals of the Paris Agreement and limit the global temperature rise to 1.5°C, decarbonisation and electrification of the global economy need to accelerate exponentially. Critical minerals and metals will play an essential role in achieving the green energy transition.

Material requirements of the global energy transition Whilst recycling and circular design can partially reduce the material needs, an exponential increase in global mineral and metal production will be vital. The International Energy Agency (IEA) estimates that in order to meet the Paris Agreement goals, a quadrupling of mineral requirements for clean energy technologies by 2040 will be necessary.

Mining projects are historically complex, with long lead times from discovery of a deposit to production. Faced with declining quality of ore bodies and in a rush to meet market demand, it is easy to see how financial calculations can override environmental concerns and ignore the true costs of mining.

The expected expansion of the mining sector will

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have inevitable impacts on the environment, including deforestation, pollution, damage to and loss of biodiversity.

These costs, the so-called ‘externalities’, will be borne by ecosystems, landscapes and societies for generations to come.

A spotlight on environmental due diligence Whilst some degree of corporate human rights due diligence has become standard practice in the sector, the same does not hold true for environmental due diligence. For example, lithium, a critical ingredient for electric car batteries, is extracted in some of the world’s driest places such as the Atacama Desert in South America.

The evaporation techniques used require vast amounts of water with estimates ranging from 500,000 to two million litres per ton. However, no global standard exists to regulate lithium supply chains.

Despite a proliferation of mining industry standards, there is no comprehensive environmental standard.

Unless environmental due diligence takes centre stage, manufacturers of renewable energy technologies or electric vehicles will be hard pressed to market their products as sustainable.

We need governments, industry, investors, consumers and civil society to work together and agree on harmonised and strengthened principles for mining and the environment to ensure that our green transition can be truly sustainable.

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If we don’t understand how our buildings are performing, we’ll never successfully decarbonise.

Image provided by IES

The climate tech that is helping to decarbonise built environments By using cutting-edge climate technology, businesses, cities and governments can formulate a detailed decarbonisation roadmap and set themselves on course to reach their zero carbon goals.

INTERVIEW WITH Ruth Kerrigan Chief Operating Officer, IES

WRITTEN BY Tony Greenway

Paid for by IES

W

hen it comes to decarbonising our built environment, we need a little less conversation and a lot more action, says Ruth Kerrigan, Chief Operating Officer of IES, a leading provider of digital twin technology and building performance expertise. It’s good to have sustainability ambitions and targets, but these are useless unless steps are taken to realise them.

Raising awareness and taking action On one hand, Kerrigan is hopeful that high-level sustainability goals can be achieved. “People are definitely paying more attention now,” she says. “Look at the difference between COP21 and COP26. COP21 barely caused a ripple, but COP26 attracted attention from all over the world. Five or 10 years ago many people didn’t know what energy efficiency was. Now they do.”

On the other hand, she insists, a big issue needs addressing. Take the example of building owners and managers, they know they must improve how their buildings perform because the built environment accounts for almost 40% of global emissions. “The trouble is they don’t know exactly what to do or how to go about it,” admits Kerrigan. “That’s a barrier to change.”

Digital technologies to reach decarbonisation goals Thankfully, digital technologies can help formulate detailed

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decarbonisation roadmaps. For example, a performance digital twin is a real-time virtual replica of a building in operation, visualised as an elaborate 3D graphic and as data on a dashboard. A digital twin mirrors the behaviour and dynamics of its real-world counterpart to measure and verify performance, supporting decision-making by simulating the impact of energy and carbon saving interventions over time. It can also make predictions so strategies can be adapted to unforeseen challenges as they arise.

“The fact is, people don’t use buildings as the designer intended,” she explains. “For instance, a room may have been designed to operate at a constant temperature of 21 degrees — but there’s nothing to stop someone turning the thermostat up to 24. A digital twin can measure and verify energy, carbon, costs and other metrics to show owners or occupants how the building is operating against a baseline of how it should be performing — and help them see what they can do to improve matters.

Measurement and verification is critical, if we don’t understand how our buildings are performing, we’ll never successfully decarbonise.”

Digital twins are not restricted to optimising performance of individual buildings. Today’s technology means it’s possible to virtually replicate groups of buildings — even entire cities. “We’ve created a digital twin of the city of Limerick,” reveals Kerrigan.

“This is part of a decarbonisation

roadmap to show the authorities the actions they need to take by 2050 to become carbon neutral.”

Taking a holistic view of sustainable investing Kerrigan believes other examples of smart infrastructure and userfriendly engagement tools can make it easier for people to get involved in decarbonisation activities.

However, she feels a mindset shift is necessary too.

“At the moment there are too many ‘one-off’ measures being taken, like changing your gas boiler to a heat pump, adding photo-voltaic panels or buying an electric car.

These are all positive moves that will help us on the journey towards decarbonisation and sustainability; but to do it properly requires a more holistic view of sustainable technology investment. For instance, if you switch from a gas boiler to a heat pump but don’t increase the effectiveness of your insulation, your heat pump won’t work. We require greater understanding of the issues we face.”

Ultimately, Kerrigan says the answer is better data and using the technology to translate that data into actions.

“Stop talking about high-level goals and start understanding how your buildings are performing and what can be done to reduce their energy consumption. If we take that approach, we’ll reach our decarbonisation targets more quickly and cost-effectively.”

Find out more at iesve.com

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Can our financial investments promote a more sustainable future?

Consumers increasingly wish to see their values meaningfully reflected in their pensions and investments and are aware of the powerful potential this can have in driving progress towards a greener future.

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ow has the way we view our investments changed in recent years?

The conviction among consumers is reflected in UKSIF, by a poll carried out annually to mark our ‘Good Money Week’ campaign. This raises awareness of how we tackle the barriers between public engagement and sustainable investments. A clear trend has emerged: savers ‘only or mostly’ interested in whether their investments are making financial returns has steadily declined.

Challenges in comparing funds This trend has encouraged momentum among investors to more comprehensively consider environmental, social and governance (ESG) factors. However, a lack of common criteria defining what constitutes a sustainable investment has been a challenge, making it

extremely hard for savers to compare different funds in the market and assess how these might align with their values.

The Financial Conduct Authority’s recent work on an investment labels system aims to help consumers navigate the diverse range of sustainable investments. It will ensure firms are held to account for their sustainability claims and hopefully combat ‘greenwashing.’ There are a number of actions our sector can take while this work progresses and by which consumers should question their financial providers.

Communication with consumers Firms should seek ways to communicate more innovatively with consumers, making greater use of digital solutions and recognising a key barrier to sustainable investing can often be the language they use.

Public education needs to be a priority – including tackling the misconception that savers need to accept lower returns when making investments that align with their environmental principles.

Carefully explaining to consumers the multi-faceted nature of sustainability is vital, for example a sustainable fund may not necessarily focus on the climate crisis alone, but may also consider other environmental issues such as biodiversity.

WRITTEN BY James Alexander CEO, UK Sustainable Investment and Finance Association (UKSIF)

All generations care about sustainability We should not assume all groups have limited understanding of sustainability issues or do not wish to make a positive impact with their investments. There has been a prevailing view that the younger generation cares the most about sustainability, but research published during UKSIF’s ‘Good Money Week’ last year showed this desire is not confined to a particular generation, with the 60+ demographic caring the most about sustainable finance options.

The rising interest on ESG investing has placed an enormous responsibility on financial services. We are hopeful the sector can rise to the challenge and facilitate more sustainable investing in the coming years.

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How sustainable investing can deliver both profits and a positive impact performance, working conditions or diversity,” he says.

Public market investors can vote at annual shareholder meetings but tend to have smaller stakes in a business and therefore less of an influence over, say, its net zero strategy.

“However, together with other investors, they can collaboratively push for change,” explains ConstableMaxwell. “This stewardship approach can be hugely effective and applies to businesses in every sector.”

People increasingly understand that having a sustainable investment portfolio isn’t simply good for people and the planet, but it can also generate sound financial returns.

INTERVIEW WITH Ben Constable-Maxwell Head of Impact Investing, M&G

WRITTEN BY Tony Greenway

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ustainable investing is on the increase and has now gone “mainstream”, according to the World Economic Forum. So, when and why did it become so popular?

“The ratification of the UN Sustainable Development Goals in 2015 didn’t exactly open the floodgates to sustainable investing,” says Ben Constable-Maxwell, Head of Impact Investing, M&G. “But it did get policymakers, businesses and investors - speaking the same language about the goals that society needs to address.

“And rightly so, because the scale of the challenges we face, whether climate change, biodiversity loss, poor health or social exclusion, requires a systemic response. These are becoming dominant issues for governments globally, as well as being increasingly front and centre for sustainable investors. Progress has been made, but there is much still to do.”

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The simple way to explain sustainable investing is “investing for the long-term in businesses that are aligned with society’s objectives and supporting the sustainability agenda,” notes Constable-Maxwell.

“That can mean avoiding investment in bad actors that are harming people and the planet, or aligning portfolios with businesses that promote fair pay and decent work, or even Investing to drive real-world positive change.”

Influencing company policy There is, however, a more nuanced take on how to effect that change, with ‘shareholder engagement’ at one end of the scale and ‘investment in solutions’ at the other.

On the ‘engagement’ side, Constable-Maxwell gives the example of private market investors who hold a controlling stake in a business. “Their influence can set the right standards and practices that help the business deliver more responsible, sustainable outcomes, such as improving environmental

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Delivering sustainable outcomes The ‘solutions’ side, meanwhile, involves allocating capital to businesses that are intentionally tackling major problems, such as sustainable packaging to reduce plastic waste, technologies to help high-carbon sectors decarbonise or mobile banking to enable economic empowerment for vulnerable groups. Even though it is part of the sustainable investing spectrum, Constable-Maxwell notes that this is, technically, “impact investing.”

Often, ‘social’ and ‘environmental’ impact areas are thought of as distinct and separate. Yet Constable-Maxwell stresses that to make a real difference, investors must take a holistic view of sustainability. “Inter-connected problems can’t be treated on their own,” he says. “It’s myopic to invest in climate solutions without considering how the energy transition might affect vulnerable communities in parts of the world.”

Good returns in the long-term Sustainable investing clearly has a positive role to play, but can it offer sound returns too? Work to understand the link between sustainability and financial performance is still ongoing, admits Constable-Maxwell. “Yet academic evidence suggests that sustainable companies are able to borrow at lower rates and generate higher returns on their investment. They also tend to avoid reputationally damaging controversies. In time, we believe irresponsible or polluting businesses will have to pay for the social damage they cause.

“Now, whether all of that translates into good financial performance in a given time period will be subject to economic and market dynamics.

But we believe that over the longterm, sustainable businesses will be more successful because regulators, customers, employees and investors will all reward them.”

Find out more at mandg.com

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Addressing fashion sustainability issues with new circular business models Circular business models for fashion could decrease greenhouse gas emissions by providing consumers with alternatives to fast fashion.

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ince 2019, despite the COVID-19 pandemic, seven rental and resale platforms for clothing have reached unicorn status. Valued at more than USD 1 billion, they aim to provide people with access to fashion without countless new products needing to be made. If this is achieved, businesses like these can play a key role in tackling global challenges including pollution and the climate crisis.

Collectively termed ‘circular business models’, this opportunity is being realised by businesses including Hack Your Closet – which offers a personalised clothing subscription service of used or overstock items – and GANNI, which remakes and rents garments to keep their designs at the highest value.

WRITTEN BY Marilyn Martinez Project Manager, Ellen MacArthur Foundation

Reducing use of carbon emissions Resale, rental, repair and remaking models alone have the potential to provide a third of the emission reductions necessary to put the fashion industry on a 1.5-degree pathway if they can capture 23% of the global fashion market. This would amount to a reduction of around 340 million tonnes of CO2e annually by 2030, more than the annual GHG emissions of Thailand or France.

But this potential can only be realised if circular business models become mainstream, thereby achieving a fashion industry where waste and pollution are eliminated, products and materials are circulated and nature is regenerated, by design.

Changing performance indicators of success Yet, today, success is based on ‘linear’ performance indicators – defined by an increase in sales of products made from finite virgin materials. This discourages the uptake of circular business models and limits their ability to displace production of new products.

Shifting performance indicators to measure revenue generated per product, for example, could incentivise businesses to develop multiple revenue streams and encourage users to opt for its circular offerings.

Product design is also crucial. Not all products on the market have currently been designed to be used more and for longer. This means that delivering them via business models that extend their use is currently not economically or environmentally viable.

Improving fashion supply chains How supply chains are set up also matters. Currently, fashion is built for a one directional flow of products – reverse logistics infrastructure does not exist at scale in local geographies where these products are being sold.

While there are challenges to overcome, circular business models are expected to continue growing as people increasingly adopt new ways of accessing fashion. This shift represents an opportunity for new and better growth if fashion businesses fully embrace circular business models at their heart.

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