ADD2200 Commercial Sector action on climate change in London

Type of decision: 
Assistant Director's decision
Code: 
ADD2200
Date signed: 
14 February 2018
Decision by: 
Patrick Feehily, Assistant Director, Environment

Executive summary

Commercial buildings are currently responsible for 32 per cent of London’s carbon emissions. The draft London Environment Strategy recognises that to achieve the Mayor’s zero carbon ambition by 2050, the emissions footprint of London’s workplaces will need to fall by circa 90%. To achieve this approximately 15,000 workplaces will need to install energy efficiency measures and renewable technologies each year to 2050. The Environment strategy also states the Mayor will work to help SMEs, which comprise over 90% of businesses in London, to use less energy and other resources to save them money and making them more competitive. 
To support the GLA in developing and targeting interventions to meet the above goals, the GLA plans to commission research to strengthen the evidence base on the commercial sector in London. This will provide an improved understanding of the carbon emissions by sector and organisational type in London as well as examples of work already underway that can be replicated and recommendations on action that can be led by the GLA to achieve the desired outcomes. It will seek to disaggregate the SME sector to ensure that future GLA programmes help the SMEs in most need of support. 
Procured and managed by the GLA, the research will be fully funded by the GLA’s budget earmarked for     the development of a new commercial energy programme. It will directly guide the development of the GLA’s policies and programmes in this area, as well as contribute to existing initiatives underway such as the Carbon Disclosure Project (CDP)/C40 Business Programme of which London is the pilot city.
 

Decision

That the Assistant Director of Environment approves expenditure of up to £50,000 for the procurement and appointment of consultants to undertake research on the characteristics and opportunities for the GLA to work with the commercial sector on climate action.

Part 1: Non-confidential facts and advice

Introduction and background

1.1.    The draft London Environment Strategy recognises that the commercial sector will play a key role in meeting the Mayor’s zero carbon ambition by 2050. For example, as part of the trajectory to zero carbon, it is estimated that emissions footprint of London’s workplaces will need to reduce from 16.6 MtCO2e to 1.6 MtCO2e by 2050. This equates to around 15,000 workplaces being retrofitted with energy efficiency improvements and renewable technologies each year to 2050.

1.2.     The Greater London Authority (GLA) is looking to develop a new overarching programming with the commercial sector as part of its efforts to work with businesses to help make London zero carbon by 2050.

1.3.     Further research and analysis is needed to develop an effective work programme to tackle carbon emission in the commercial sector. This is both due to the need for an updated picture of the commercial sector in London and its carbon footprint, and the changing national policy context and the subsequent potential for action in London. There is also a need to fully map existing activities across the city as anecdotal evidence suggests there are a large number of existing programmes underway in London (e.g. at Local Authority level) that could be scaled up and rolled out more widely by the GLA.

1.4.     As a result, research is needed by the GLA, on the following aspects.
•    Review of the existing relevant regulations driving action in this area 
•    Market segmentation of the business sector, identifying the different ways in which the sector can be disaggregated – e.g. by size, sector, location, turnover etc – and which approaches to segmentation are the most appropriate to draw upon.
•    Collating and analysing information on business energy consumption and other GHG emissions and wider environmental activity data by organisation, segment(s) and sectors
•    Identify the business support services which currently exist and how they operate. This will then enable a gap analysis of existing provision of business support.
•    Drawing together a list of existing business activities and engagement on this issue, working with existing partners’ data bases such as Carbon Disclosure Project (CDP)
•    Researching business attitudes towards this agenda: identifying barriers, drivers and opportunities
•    Detailed analysis of the SME sector considering factors such as the socio-economic group of owners and employees, energy bills as a proportion of turn-over, and efficiency of building stock.
•    Stakeholder mapping to identify the business support services that currently exist and how they operate. This will then enable a gap analysis of existing provision of business support.
•    Desk review of regional, national and international best practice, including a review and evaluation of the GLA’s previous Business Energy Challenge.
 

Objectives and expected outcomes

The research will
2.1.    Provide greater understanding of the existing regulatory landscape enabling a better understanding of what businesses currently have to do.
2.2.    Assess current energy usage across the business sector in London and associated financial cost.
2.3.    Enable an improved mapping and segmentation of the business sector in London and understanding of current business engagement on this issue. 
2.4.    Map existing business support and business activities to identify gaps and opportunities in London.
2.5.    Research best practice, drawing together local, regional, national and international examples of business engagement and support on environmental and climate change issues.
2.6.    Prioritise group of sectors and organisations to engage with from both the business and support sides, including an analysis of the SMEs most in need of support. 

This will enable the GLA to develop new evidence based policy initiatives to improve energy,
environmental and climate performance in London’s business sector.
 

Equality comments

3.1.    The evaluation process will be conducted to ensure that submissions are evaluated fairly to select the offer that provides the relevant experience and offers value for money.
3.2.    The analysis will consider how greater support could be provided to SMEs that provide local employment in areas of social deprivation.  
 

Other considerations

a)    High level risks

Risk description

Mitigation actions

Lack of robust evidence base to draw meaningful conclusions.

Existing in house desk based analysis and research through other GLA programmes (e.g. CDP/WMB programme, 1.5 degree action plan) will complement this research to enable a comprehensive and varied evidence base

Development of commercial energy programme is slowed by delivery of research

Elements of GLA’s new commercial energy programme (eg CDP/WMB leaders programme, Commercial boiler scheme) are not dependent on research findings and have already been initiated

Conclusions of the assessment do not align with Mayoral priorities and existing

Impact of no action will be quantified to set all proposed programme costs in context.

 

b) This research links to the Mayor’s draft Environment Strategy and a zero carbon London by 2050
ambition.
 

Financial comments

5.1.    Assistant Director’s approval is sought for expenditure up to £50,000 for the procurement and appointment of consultants to undertake research on the characteristics and opportunities for the GLA to work with the commercial sector on climate action. This is to be funded from Environment’s 2017-18 Commercial Programme budget. The work is expected to be completed in 2017-18.

 

Planned delivery approach and next steps

Activity

Timeline

Procurement of contract

February 2017

Contract awarded

Mid February 2018

Delivery End Date

31s March 2018