Net zero: business models for a just transition

People stacking hands together in the park

Meeting our net zero obligations is our once in a generation opportunity to do the right thing and build a fairer, more equitable society.

The urgent need to address climate change by dramatically cutting global carbon emissions is now universally recognised. Many nations are enshrining the carbon reductions in law. The UK being one of the first, and most ambitious of them.

In part, the UK also recognises that there is an enormous opportunity in showing leadership. Giving clear signals to the UK economy and to domestic innovators that they will be supported in developing and deploying radical new solutions that meet people’s needs in sustainable new ways.

And by building demonstration cases and successful markets here, the UK will also be much better placed to deploy those proven solutions and expertise globally as well.

Wide ranging solutions

To enable us to meet our own targets, we need to be developing net zero solutions that are both applicable, and desirable, to the many and not the few. It will also provide us with the greatest possible global export opportunities.

If we don’t, we will fail to get the scale of uptake needed to achieve our legal requirements. But we will also develop solutions for which there is only a limited market.

More importantly, we will also be failing in our moral and political duties of transforming the economy in a way that doesn’t increase inequality and leave vast swathes of society behind.

User adoption is imperative

Many of the changes we need to implement are as much to do with social and behavioural shifts as they are with new technology. In fact, we arguably have most of the technology we already need, and the bigger problem is one of adoption.

This adoption only happens voluntarily when the solution proposed meets people’s needs in a better way than before, whether it’s by:

  • being cheaper
  • more convenient, or
  • delivering other co-benefits.

So, it is critical to first understand the primary needs driving decision making, and then create solutions that meet them in a net zero way. Simply pushing technology at people without tethering it to real needs is doomed to failure.

Slum and downtown area of Rio de Janeiro

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Why a just transition?

The idea of a just transition is that everyone experiences it equally, without there being some who are disproportionally advantaged or disadvantaged. Not only is this the socially just route, it also properly delivers on the levelling up agenda across the UK.

Plus, as discussed above, it is the only route that delivers net zero solutions with the greatest potential for widespread change and adoption. All the more so when you consider global markets.

There has been some movement in this direction, but for huge social, environmental, and economic reasons, we think there needs to be a lot more.

Report findings

To that end we commissioned Vivid Economics to explore how net zero business models overlap with business models aimed at providing solutions to marginalised UK communities. The results allow us to see how the two could be brought closer together in a just transition.

Vegetable garden on a rooftop

Credit: AerialPerspective Works, Getty Images

The net zero business models for a just transition report shares its findings. It explores the characteristics that net zero business solutions should adopt if they want to vastly expand their reach into critical new markets.

What is clear from the results is that the private sector will not deliver unless it understands a lot more about how its activities can:

  • increase social capital
  • support thriving communities.

In the process it can help deliver a sustainable and equitable society commensurate with the scale of change we need to see, and which is built on enthusiastic demand.

Your thoughts and ideas

We would be interested in your thoughts and ideas:

  • where do you see successful solutions being built that deliver on both net zero and a just transition?
  • how can we help net zero businesses better understand real social challenges and reorient their business models to deliver on them?
  • what is the role of places and local government in identifying and driving net zero solutions that work for all?

Building a sustainable and thriving economy

This report is a collaboration between:

  • Innovate UK
  • Local Trust
  • Friends of the Earth.

All three organisations are concerned with how the UK can build a sustainable and thriving economy that best meets the needs of all. Pooling our collective experience ensures that we take a properly balanced view of the challenges, and develop solutions that deliver socially, environmentally, and economically.

Further information

You can connect with James Goodman on LinkedIn

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You can go to the Local Trust website

You can go to the new Innovate UK website

You can go to the Innovate UK EDGE website

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This is the integrated website of the seven research councils, Research England and Innovate UK.
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