Paul Ellis, Hugo Spowers, Trewin Restorick, Angela Terry and Professor Ken Peattie.

Q74 The Chair: Good morning, colleagues, our witnesses and, indeed, people in the gallery. It is lovely to see you all here today to participate in this round table with representatives from business organisations and academics as part of our inquiry looking at how behaviour change can have a role in achieving the Government's net-zero goals. It is a slightly different format for our inquiry today. It is called a round table, even though you are all in a straight line, and because it is a slightly larger panel, I will start the session by asking each of you to say a few words about yourself, your organisations or your businesses, which will frame our subsequent discussions. Paul, given that you are first alphabetically and you are on my left, perhaps you could start and then we will work down the line. Thank you.

Paul Ellis: I am the chief executive officer of the Ecology Building Society, a position I have held for 26 years now, based on my personal commitment to sustainability. We have an explicit mission to build a greener society by mobilising the personal capital of our savers to support environmental lending. We do that by specialising in providing mortgages for properties and projects that have a positive environmental and social impact. We believe in rewarding our borrowers who play their part in reducing carbon emissions, which we achieve largely through our unique pricing model. This year, we were the first building society to report on the carbon impact of our lending, taking into account the scope 3 emissions that arise from our products. We are a member of a number of coalitions, both in the UK and internationally, that support these concepts of lending. We are a member of the Global Alliance for Banking on Values, which is an international group of values-based regulated banking organisations.

Hugo Spowers: I speak for Riversimple. We are developing hydrogen fuel cell cars. I speak very much as a start-up business, although we are a 20-year-old pre-revenue start-up. We believe that we are facing step changes in the transport sector. We cannot look at it independently of the energy sector. We take a whole-system design view and explicitly address three levels of design: not just the product but the design of the system; the business model, which hugely influences the design of the product; and design at the level of purpose, so that is governance and sustainability hardwired into the structure of the business.

In our articles of association we have a purpose statement, which is: “to pursue systematically the elimination of environmental impact of personal transport”. It is a huge responsibility of the board, and it sounds ambitious but reduction is an inadequate goal because being less unsustainable is still not sustainable. Also, we are not going to get there overnight so the other key word is systematically. We have to make sure that every investment we make is taking us towards that end goal rather than a dead end. It is all too easy to go for the low-hanging fruit and invest in something that can never be sustainable. Then you have to write off the investment you have made in getting to the wrong place and start all over again, and people are very unlikely to write off investments. We believe backcasting is a terribly important principle to adopt at the moment rather than forecasting because it gets us into even more trouble.

Trewin Restorick: Good morning, everyone. About eight years ago I had a belated midlife crisis and set up an environment charity called Hubbub. We have about 50 staff and our aim is to take environmental messages and behaviour change to a large-scale audience by being positive, practical, co-operating with large businesses, and measuring everything we do. We are honest about mistakes as well as celebrating successes and then give away the results so that others can copy what we have achieved. We were Charity of the Year last year, and we work with major companies such as IKEA, Starbucks, the Co-op and Virgin Media O2, helping them translate their sustainability ambitions into campaigns which their customers and employees understand.

Angela Terry: Hello, everyone. Thank you for inviting me here today. I am an environmental scientist. I have worked for 20 years in forestry and renewable energy projects, including community-owned farms [1] and solar schemes. In 2018 I launched One Home as a one-stop shop for climate action for citizens so that they can reduce their carbon footprint, know how to do it, and adapt to the extreme weather events that are only getting worse, such as how to protect their properties from flooding. We are in top Google searches for things such as how to insulate your home. We work closely with the media because, obviously, in terms of reaching citizens, the media already have such a big platform. In the last four years, we have reached over 483 million people. We are a not-for-profit social enterprise.

Professor Ken Peattie: Good morning, everyone. I am professor of marketing and strategy at Cardiff Business School. Cardiff Business School describes itself as a public value business school. We are very interested in tackling some of the grand global challenges through developing new knowledge and working with business. My own speciality over the years has been sustainability in business and sustainable marketing in particular.

Q75 The Chair: Thank you very much. Before we begin, I just remind Members that they should declare any relevant interests. Up until now I do not think there have been any, but for the sake of the record I need to say that. I am going to address the first question to Ken and then invite colleagues to join in. Do not feel you need to answer every single question if you do not have something particularly to add to that point, but, equally, chip in if you would like to. First, we would like to get a better sense of the motivations for businesses to facilitate the changes to meet environmental and climate goals. Is it that you are responding to consumer demand? Is it that you are stimulating a demand because you think you have seen a market opportunity? Or is it that you are being persuaded by the Government to go down that route? Can you say a few words about the motivations in this area, Ken?

Professor Ken Peattie: I think it varies. For example, household spending in the UK roughly doubled between 2010 and 2020 on goods and services that people are consuming on the basis of buying sustainable options. Within that, the big categories are things such as food and household products. A lot of that is relatively consumer-led. Obviously, the marketing purists would always tell you that companies never lead, they follow their customers and it is a question of customer demand. I am not sure I entirely believe that, but a large chunk of it is customer-led.

The other large sectors are things such as transport and energy, where it is much more determined by things such as infrastructure investments availability. There is much more room for policy push in those types of areas, but I think a lot of companies want to be on the right side of the argument. If you look at the world's biggest 250 companies, more than 90% of them report on their sustainability performance. More than two-thirds of those report against the sustainable development goals. They are really looking to develop strategies that are genuinely more sustainable, and in order to do that they need to bring their customers with them.

It was interesting that Unilever was one of the large companies to take a very proactive role in developing a whole-company strategy to try to improve its sustainability. When it analysed its business, it found about 68% of the carbon emissions related to how customers used the products in their home when it came to things like cooking, cleaning and personal care products, for example. It realised that to reduce its own carbon impact it had to work with its consumers and it had to bring them along. It tried to develop a really quite sophisticated approach to behavioural change. It literally had a behavioural change programme, doing things such as creating adverts advising people how to take showers: to switch off the water while you are lathering up and save energy and save water. In some ways a lot of people found that a strange proposition: businesses telling you how you should live your life and do things like take a shower.

We have seen some quite sophisticated attempts from companies to do things. Also, companies respond to the market. Increasingly, market research data tells you that consumers are interested in more sustainable products. The extent to which they follow through on that is subject to some discussion and debate, but increasingly the market research data tells us consumers are interested in these products and they are willing to pay more for them providing there is not too much of a trade-off, for example, in technical performance, so companies are responding to that change in the market.

Trewin Restorick: We work with a wide range of companies and their motivations vary. Customer choice is definitely one. We are definitely seeing that around food: the shift to more varied diets, more plant-based diets, has definitely made companies act. You see it around dairy products; the huge growth in non-dairy milk products, so they are reacting to that. They have also—thanks to the David Attenborough effect—really reacted to plastic. You have seen a massive shift on customer demand for plastic-free products.

Government legislation has worked in the areas where government has legislated or threatened to legislate. DEFRA has, through something called the extended producer responsibility, shifted a lot of the cost and the responsibility about what happens to packaging products to businesses, and businesses are reacting very quickly to that even though the legislation is constantly in consultation. They are all trying to stay one step ahead of the legislation.

For businesses, recruitment is really important in keeping talent. They know that the younger generation is really interested in these issues, so a lot of the sustainability stuff is driven by the need to recruit and retain the best employees. As has been said, businesses want to stay on the right side of the debate. Social media highlights bad practice very quickly, so they are very risk concerned. They are very concerned about supply chains at the moment and how they can build business resilience. Increasingly, the financial markets are shifting and questioning investments. It is a range of those four things and it varies from sector to sector and business to business.

Angela Terry: I would add in one more, which is that we are all human beings and there is now a very moral imperative on everyone, especially in leadership, to respond to the climate crisis because we have this trifecta going on at the moment of Putin's war in Ukraine, the cost-of-living crisis and the climate crisis. After the publication of the IPCC report last week the UN Secretary-General said, “Delay is death.” We are talking about human suffering and human death when we delay climate action. It is not a fiduciary duty yet, but there is increasing onus on leadership in this moral space to react to climate change.

Paul Ellis: From our perspective as the Ecology Building Society, a values-based organisation with sustainability written into our founding articles, we are very much representing a community who are already oriented in this direction. To some extent, we are responding to customer demand. What we do is put together a proposition that allows that demand to express itself via our ethical savings products, which means that we can mobilise the personal capital of our members towards sustainable lending and then designing mortgage products that allow individuals to make an impact in terms of energy efficiency and the condition of our housing stock and the impact of our housing stock on the environment. It is very much a values-based model and, in common with Hugo’s, the entire business model is effected and oriented towards achieving those solutions, the difference being that we are a reflection of a movement, as a mutual-owned organisation.

Hugo Spowers: As I said, it is in our purpose statement so the driver is internal to pursue these objectives. However, I do not believe that we will have any significant impact unless we are successful by the metric that everybody recognises, which is money. We are a business, a for-profit business, and key to this is to build a business that makes more money from doing the right thing than business as usual makes from doing the wrong thing. If you do so, there is every reason to believe that others will copy you, because that is what entrepreneurs do. I accept that we are speaking from a privileged position of being a start-up and we have a clean sheet of paper and no constraints.

The key to it seems to me to be alignment of interests, and that is a matter of business models. We have business models that have been developed over the last couple of hundred years that are fundamentally misaligned with the interests of society. The driver for us is, ultimately, better business. It is smart business; it is future-proofing our business. If we make more profit from being more sustainable than business as usual makes from being unsustainable, it keeps us ahead of regulations. There are two key principles that I think manufacturing industry has to adopt; they are not sufficient but they are a necessary condition for a sustainable industrial society. One is that the product has to stay on the same balance sheet from clean sheet of paper through to end of life. Secondly, all operating costs have to be internalised on that same P&L. If you do that, you will build a completely different product.

Pricing is driven not by the cost of making the product, but by the lifetime cost. Instead of being rewarded for maximising resource consumption, you are rewarded for maximising resource conservation. I, for one, do not see how we can ever have a sustainable industrial society based on rewarding industry for the opposite of what we are trying to achieve. That is a high-level, privileged position that I can adopt because we are a start-up, and I accept the fact that it is not easy for other businesses. It is much harder to change business models than to change technology, but I think it is necessary.

Angela Terry: I think what is good about the Unilever model that Ken mentioned is that it widely reports that the products it developed under the sustainable living plan are the better financial performing ones because it was resource efficient and so the fact that the business is doing well is not driven by the greenness but by the efficiency.

Baroness Boycott: Thank you all very much. Trewin, you mentioned that you worked for IKEA, which seems to me a very complicated business model in that the whole idea of it is that you buy furniture that does not last for very long. How do you square that, and what do you do because, as far as I can see, that is IKEA’s profit motive? Also, Hugo, I did not completely understand that. Are you saying that to get a product to last for a long time, you will make people pay more for that up front to ensure the profit motive? I was a bit struck by all of you, and this includes Unilever: you are not actually talking about making less product, it all seems to be product that is “better”. But, as I think you said, Trewin, you cannot be half-sustainable and surely to be genuinely sustainable we are going to have to buy a lot less stuff. I wondered how all of you responded to that notion. Can you start, Trewin, because IKEA has always been one that is a really tricky business model?

Trewin Restorick: It is a tricky business, and I think it would argue quite long and hard with you about what you referred to as the throwaway nature of their products. IKEA says that it has more sustainable products, and when we first started working with it we were like, “Well, what are they? Where are they? How do you justify them?” The first thing we did was to go round IKEA to identify which of its products we thought genuinely did have an environmental impact. It does a lot around energy efficiency; it does a lot around water efficiency. It has a range of products that we felt were a more positive form of consumption.

We then worked with its co-workers and customers, and we went out to about 150 stores and listened to the aspirations of its customers and what they wanted in their lives. From that understanding about what was driving their choices and their purchasing patterns and their lifestyle choices, we encouraged them to think about buying some more sustainable products when they were making those purchasing choices. We also encouraged them to think about everything they could do in their lives to save energy, to reduce water use, to reduce waste. By doing that, we created a community which IKEA called Lagom. It is a Swedish word meaning not too much, not too little, but living in balance. The Lagom campaign, which is measured by the University of Surrey, has helped all of those customers who participated to reduce their carbon emissions, to reduce waste, and to reduce water use. From IKEA’s perspective—and it is a commercial proposition—the sale of its greener products grew from a 2% planned growth up to a 28% planned growth.

Baroness Boycott: If I am correct, if you go into IKEA you can find a product that is labelled a sustainable product and a product that has got no label and it is cheaper.

Trewin Restorick: In many cases they are. I cannot make a sweeping statement on that, but if you go into its Greenwich store now you can see the Lagom. It is set up to encourage more sustainable purchasing. Pre Covid it was running events and workshops within store, which was about helping its customers think about reducing food waste and using energy more efficiently. They were some of the most popular events that IKEA held within store. I understand your basic premise that IKEA does what IKEA does, but what we have done with IKEA, and it is now its global campaign, is nudging and shifting its customers on to that path. We have just started working with IKEA to look at how you can get the furniture that people throw away, or are about to throw away, back into store to be repaired. That is a complicated jump in its business model and we are starting to try that with it.

Hugo Spowers: I am sorry to keep on talking about cars, but inevitably I will use that as the example as it is of generic relevance to all manufactured goods, really. To your question, we absolutely are not aiming to come to market at a premium. Fundamental to our proposition is to come to market with cars at an equivalent cost of ownership. Actually, we are benchmarking against the bottom of the range diesel Golf, not at the Tesla end of the market. In the car world any new zero-emission vehicle is a premium in the marketplace and people think that as volume increases the price will come down. It probably will not with battery cars because 80% of the cost of the battery is in the raw materials and when demand for commodities goes up, the price goes up, not down. Leaving that aside, volume is key in manufactured goods to getting prices down. The trouble is to get the prices down you need to get the volume up and to get the volume up you need to get the prices down, so it is a chicken and egg.

If, however, you sell the service, you can capitalise the cost of the product on your balance sheet and amortise it over a long time. It is akin to a property company with an office block portfolio. When we are building cars, we are not building products to sell, we are building revenue-generating assets for the balance sheet, and the longer we can make them last, the more profitable they are. The longer we can amortise them over, the cheaper they are for the customer. It fundamentally changes the design of the car because we know it is going to be ours at end of life when we are designing it at the beginning. We design it for maximum recovery of value, and that is not just raw materials but components that can be refurbished and used again. We design it to minimise the operating costs because we are internalising all the costs, including the fuel costs, on our P&L, so it is worth our while investing in efficiency. We design it to minimise all the maintenance because we are paying for the spare parts. The industry makes a 1,500% markup, on average. Furthermore, we are designing it to maximise the length of the revenue stream, whereas the industry's driver is obsolescence.

As we develop the technology in the cars, we gradually decouple our revenue from virgin resource consumption. More and more of it is coming through the cycle. We are not talking about recycling; that is, downcycling and all the permutations thereof. We are talking about completely closed-loop material flows. In terms of the mandate of today, we have a pretty dim view in the company of behaviour change. We think it is very, very difficult and what we believe is necessary is to offer something that is more appealing and more convenient, at the same price that people are used to paying.

Angela Terry: On consumer change, consumption has to decrease and during Covid, when everyone was stuck in the house, the biggest complaint from homeowners was lack of storage space. People's desire to buy things is reducing, which is why even brands such as Marks & Spencer are going into hiring clothing, instead of just purchasing and disposing. That is why things such as Freecycle and other websites where you can continue the life of goods are booming, so there is a shift as well. Also, we are seeing quite a lot of premium brands now offering very long lifetime warranties on their products, so you can get it repaired for free, and that is everything from high-end coats, lamps to vacuum cleaners. That is also a growing trend in the market. Basically, people are sick of the waste.

Professor Ken Peattie: If we are serious about getting to where the science tells us we need to be in relation to climate change, there are two big strands. One is making our economy much more materially efficient. We have a very inefficient system where we throw away a great deal of resource, a lot of resource sits doing nothing. Cars spend most of their lives sat on drives doing nothing; a lot of household goods spend most of their lives in cupboards. Moving towards an economy where we are getting more benefit from material by accessing it rather than owning it and keeping it and disposing of it, moving to a more product-as-service type of economy, gives us the chance of a real step change.

On the one hand, that move towards a more circular economy is vital and there is some really good work being done by the likes of the Ellen MacArthur Foundation and companies such as Arup. If you look at China, for example, the Chinese Government are taking circular economy initiatives as a core part of their economic and development strategy because they know with the growth in their middle-class consumption demand there is no way they can service that and not destroy the planet without moving towards a much more resource-circulating, efficient system.

On the other hand is consumption reduction. I do not know if people saw the Take the JUMP report that was published on Monday, with the sustainable urban futures research behind it, which was really saying that there are six shifts that we need to do quite seriously. One is to reduce use of the private car. Another is to eat better in terms of a healthier diet, less meat and dairy, and not throwing away as much of the food as we do at the moment. In this country we throw away about £700 a year per family. Also, to fly less and to buy clothes to last rather than to be fashionable. In those relatively core parts of our lifestyles there will need to be some degree of consumption reduction if we are serious about hitting climate change targets.

Hugo Spowers: Picking up on the point of the question about it still sounds like we want to make more, we do not sell cars, we sell mileage. Our incentive is actually to sell that mileage with as few cars as possible. We need to offer the economic utility with the minimum possible resource consumption. It is absolutely not about selling more.

Paul Ellis: I think any green business needs to integrate sustainability into every single business decision it makes. That does mean that within your business model you have to issue certain sectors of the market certain lines of business. In our case, we have a lending policy that has a whole series of exclusions; for instance, we do not lend on second homes. It is very much related to how the housing market should operate and how we consume housing in a more efficient way. We will lend only in circumstances where we think the property has a good environmental outcome.

If we get a proposition in front of us with a very large building, it may have high levels of energy efficiency but it is way beyond the needs of the individuals, as far as we can see, we will not lend. We are quite happy to avoid lending that would be very profitable for us and would build our balance sheet but would not accord with our values. There is a feedback loop there for our savers because they can understand exactly where their money has gone. When we talk about green premium, our savers will accept a slightly reduced rate, within a certain range, because they know that part of the value they obtain from lending their money to us and trusting their money to us is that there will be environmental and social returns. The financial return is absolutely not the most important element for our members, our customers.

Lord Colgrain: Paul, can I just pick you up on that a little bit? The Government are putting in EPC standards, which I think are now D going up to C, and you can have a building where the owner of the building has done everything they can in terms of double glazing, insulating the roof, lightbulb changes, boiler changes, and so on, but it is still not going to get up above, let us say D. It cannot get up above D by nature of the materials with which the house itself was originally built. Would you lend against that or would you say that that is environmentally unacceptable and unsustainable?

Paul Ellis: We think if you are constructing a new building, you should aim for the highest standards possible; there is no argument about that. We particularly apply that to our developers. In terms of our retail customers and our sustainable homes product, we insist on an entry level EPC of B and an SAP rating of 88. We are trying to drive people up to A and A+ and to more rigorous standards such as Passivhaus, which we hope the Government will in time adopt as a route to achieving zero-carbon homes.

We make it very clear at the outset what the proposition is; for example, what rate you can expect if you have a particular project. You will get a lower rate for the more you do in reducing your energy consumption and improving the environmental impact. We look at a whole range of factors, including the whole life cycle of the property, what happens to all the construction materials and how easily you can deconstruct the property at the end. Round about 12% of our borrowers in that particular project will actually go further during their project and achieve a much better outcome in terms of the long-term costs they are going to be charged by us.

On the renovation side, which is where our real big problem is as a country with a poorly performing housing stock, we are concerned that a blanket approach of, “You must achieve C,” will create problems for a lot of people because they may well be trapped in properties where you cannot improve the rating further, and we need to think very carefully about that. We have taken the view that we start where people are and as long as they can improve the property we will support them in that process because it is the overall carbon reduction that is really important. What we want to avoid is a situation where we inadvertently encourage lenders to insulate their book against future regulation by green cherry-picking the best properties and not actually dealing with the state of our housing stock. For us, each transaction has to be transformative in that it must move from a poor condition to a much better condition in terms of carbon emissions.

The Chair: I know Baroness Young wants to come in, but just a point of information: Trewin, you said you thought that people from IKEA were here they would argue with Baroness Boycott about her perspective on its business model. Just for the record, we did invite IKEA to be a witness at this session.

Q76 Baroness Young of Old Scone: How important to all of you are regulatory standards and consistency across regulatory standards that drive both you and your competitors and the Great British public or wider in their choices? The stuff that you have been describing is great, but would better regulation help?

Angela Terry: Absolutely. Speaking for the energy industry in particular, we have shown where regulation is there and it is clear that industry responds. The clearest way we can see that is in the decarbonisation of our electricity, our power grid. We used to be almost entirely reliant on coal, which is the most polluting fossil fuel, and now 45% of our electricity each year on average comes from low-carbon renewable resources and nuclear. Our offshore windfarm industry, for example, is leading the world, basically. That is where there has been clear, consistent government policy. Where we have not got clear, consistent government policy is on things such as heating and on insulating our homes. What we have is a target, but we have no policies on which industry can implement these business models.

Basically, if there is the ability to act, the industry will react to it. Where we have this gap, we have the boom and bust of grant cycles that do not work very well. We have a target that all homes should be a C by 2035, but in our current position there is no way of getting there. We have no retrofit scheme for the UK, and what we have had is insulation schemes reduced in the past, and the consequence now is that people’s heating bills are soaring because we have the coldest, leakiest homes in Europe. That is a really clear example of how you do policy well versus how you do policy, standards and regulation poorly and, ultimately, the citizens, the bill payers, are the ones who suffer when it is done wrong.

Trewin Restorick: I think government does not really understand the power it has over business as direction of travel around a policy can force a company to react quite quickly because they want to be in the right place for when that legislation hits. I mentioned earlier the extended producer responsibility around packaging. That is an example of the Government’s intention and of businesses responding to it. If the Government were to speed up the EPR process into not just the packaging sector but into fashion and electronics, that would make a massive difference. The fashion industry, if you look at consumption and throwaway society, is a huge area. Also, in the electronics sector, the UK is the second biggest per capita producer of electronics waste.

In terms of the public perception, our recycling infrastructure in the UK is a catastrophe of confusion. The Government will say, “Oh, well, it’s the responsibility of the local authorities to create their own schemes”. More consistency there will make it easier for the consumer to do the right thing, and people do want to do the right thing. It will make it easier for businesses to communicate and it will actually reduce costs, so there is another example.

I could not agree more with what has been said around home energy efficiency. We have had a plethora of appalling schemes from different Governments. The green homes grant scheme was an absolute classic of the right intention appallingly delivered that did not achieve anything and then was cut. If ever there was a time when government should be saying, “Let's get the highest-quality standards around energy efficiency so that we’re less reliant on the energy that we’re currently consuming, so that it cuts consumer bills at a time when they are absolutely going to be hit”, it is now. It is just, to me, an open goal of policy ambition and numerous Governments have just flunked it.

Baroness Young of Old Scone: Why do you think that is? What are Governments running scared of?

Trewin Restorick: I have been involved in quite a few of those schemes. I do not think Governments put enough resource into creating the policy. I do not think they listen enough to business and consumers about what they actually need. They do not make a long-term commitment, and they are afraid of the upfront cost of the implementation, so they do not look at the broader impact of that investment in terms of carbon, cutting bills and cutting energy to make us more energy independent. The schemes are very short-term. They have been really poorly developed, with very limited resources, both intellectually and financially to create a really proper home energy-efficiency scheme.

Angela Terry: Lady Young, coming back to your question, there has been an awful lot of lobbying as well. If we take new builds, for example, there was something called the zero-carbon home. That was removed under pressure from housing developers. We do not have a replacement until 2025. The future energy standard is not as good and we have had a 10-year gap where houses have been built. Some of the big housing developers have built them to an EPC rating of C for up to 40% of their new homes, which means that they will need to be retrofitted in 10 years' time. Retrofitting is far more expensive than when the developers are onsite, so there are added costs. There is lobbying work in the short term and then, again, I keep coming back to it, it is the bill payers, it is the people who have bought those homes who are paying for more expensive utilities now. Between fossil fuel lobbying and other lobbying, there is a lot of maintaining the status quo and not stepping up to meet the needs that we all have to address going forward.

Paul Ellis: Going further, Lady Young, in that particular area, we can talk about the fact that the green homes grant scheme was a failure. It was put in place too quickly. We were involved with some of the key delivery partners and the announcement was a complete shock and surprise to us because things were not ready, so you have to ask why it was delivered in that way. If you look at building regs, we have seen incremental improvements over the years. There are some particular issues around the current set, which are problematic, but there have been incremental improvements over time, particularly in energy-efficiency standards. However, there is virtually no monitoring to ensure that those regulations are adhered to, and so they are meaningless in that respect. Performance of as-built properties just does not match what you would expect to achieve if you followed those regulations properly, which is why we are putting money behind projects to actually bring that monitoring forward to create a standard for monitoring. In terms of behavioural change, we are considering integrating a commitment to having your property monitored into our mortgage pricing.

Professor Ken Peattie: From our point of view, it is not widely recognised just how profoundly our whole regulatory environment is shaped by a linear industrial model. It has evolved over a very long period, and I can name regulatory infrastructure barriers, trade descriptions, accounting standards; the environment is riddled with these barriers. Unfortunately, of course, we think that changing one thing at a time is the prudent thing to do. We argue very strongly that facing step changes, not just in technology but in the entire external environment in which business operates, is what shapes businesses. We are facing a step change because the key constraints—carbon emissions, energy security, and so on—were not on the radar in the last couple of centuries. As Lloyd George said, “You cannot cross a chasm in two leaps”.

In facing such a step change, actually changing multiple things simultaneously lowers risks and lowers barriers. But, unfortunately, change is constrained largely by all those bodies that are not keen on change—nobody is, but business especially. The lobbying voice of mature businesses is much stronger than the lobbying voice for change. In the example I was talking about with cars, we cannot actually refurbish an electric motor and put it in a new car, and it can be just as good as it was when it was new in the first car, but we cannot provide that car as a new car, because it has refurbished components. We would have to melt it down to raw aluminium and make a new motor to be able to provide a new car.

Accounting standards do not allow businesses to retain assets on their balance sheet where other businesses have the use of that asset. On working capital, the circular economy has huge finance requirements and obviously it is a very appealing opportunity for the financial community, but it does not fit into the way in which working capital is structured in the financial world. These are very profound barriers. Having said that, we accept that we have to build a business in the existing environment and expect to see change driven as a result of demonstrating that this is a more profitable and more resilient business framework to adopt. All those barriers I am talking about will, I hope, gradually be shifted in the right direction.

Incidentally, from the point of view of buildings, we also believe very strongly that while regulatory mandates are good news in the circumstances, they are not a very good way of achieving the objectives we are after. We have a 95 grammes per kilometre CO2 limit for European cars, which gives a driver to comply at best, or to cheat, as we have seen. It does not gives a driver to excel and to produce a car that is 90, 70 or 40 grammes per kilometre. If we are going to achieve net zero, or absolute zero, we have to build into businesses absolute drivers to excel on the metrics we are trying to achieve, rather than having regulatory thresholds which business fights against, delays, waters down and cheats on. In a building sense, if developers were responsible for the energy costs for the first 25 years of a new building, overnight you would have different buildings made—there would be no incentive to paper over substandard practices, which routinely happens, as I am sure we are all aware.

Trewin Restorick: Very briefly, regulation is a very important piece of the jigsaw puzzle, but another one is the potential of public procurement. Public sector spending is a massive potential lever. If procurement standards could be oriented towards encouraging circular economy initiatives, encouraging pro-sustainable behaviours against any stakeholders, that could also have a massive impact.

Lord Whitty: You have moved on a bit, but just going back to buildings and lending on buildings, I agree with all the comments about the inadequacy, inconsistency and short-termism of all the energy-efficiency programmes we have had. Some of them achieved something, but a lot of them were dropped before they started. But the difference between buildings and everything else is where, if you are going to change your diet you can change it tomorrow; everybody changes their car every four or five years; but we are talking about the bulk of our housing stock being decades old. The remark that Paul made at the beginning, that he will only lend if you can get at least as far as B, when we know that a large amount of that housing stock cannot actually get beyond C or thereabouts, however much you spend on it, then you will remain a niche part of the lending market because everybody else will need to get money from somewhere else to exchange their house. The only other alternative for the owner or the landlord is to knock it down and build again, which is not a very environmentally sustainable solution in most cases, certainly in the short term. I cannot conceive of a lending market which could adopt your criteria, because the housing market would just not exist in those circumstances.

Angela Terry: Many of the high street banks—NatWest, Lloyds, et cetera—have got 2035 targets, including scope 3, which is the carbon footprint of the homes that they put the mortgages on. Quite a few of the largest lenders on the high street are going down this route, although not to the same standards of the Ecological Building Society. But it is well known that if you are saving money on energy bills, you are more likely to pay back your mortgage because you have more money, basically. There is a financial reason to do it, and another key thing is shareholder pressure.

Lord Whitty: That is if you can, but if we are talking about a 100 year-old building you probably cannot.

Angela Terry: The only real restraint is if you are in a conservation listed building, but internal insulation is possible for most homes. There is a way around it—it is more expensive than cavity wall insulation, but it is absolutely doable. The same applies to loft and floor insulation, and there is also secondary glazing you can put behind single. Obviously, this building is a prime example of a property that is difficult to insulate, but there are ways round it, definitely.

Paul Ellis: We need to increase the rate of replacement of our existing housing stock. But there are the hard-to-treat properties. One way of moving from where we are now is to instigate a national retrofit programme and start treating properties on a street-by-street basis, for instance, which means that you can bring down the unit cost of the programme for those properties, which will move us along further. We have to accept that there will be a point at which some properties need to be taken out of the housing market, one way or another, because they are just not able to be addressed.

We are seeing a shift at the moment, which is actually partly driven by a regulatory initiative—the Bank of England’s insistence on climate risk reporting. This is beginning to start a debate within our financial sector about bringing forward products that will reward good standards of housing. But mostly what we are seeing from the mainstream lenders at the moment are products which are financing lending they would do anyway, with a minimal reduction in price. It does not create a nudge to move the overall housing stock along from where we are. I am worried about the kind of green cherry-picking, that you just insulate your portfolio against future regulation.

Trewin Restorick: On this point, can I just go back to the theme of the committee, which is businesses’ climate change behaviour? As we know through Covid, there has been a huge shift to working from home. A lot of businesses are saying, “Well, whose responsibility is the carbon impact of that shift of responsibility?” Under their scope 3 obligations, are they responsible for the added emissions that might be created by large numbers of people working in inefficient homes, rather than perhaps travelling on public transport to a very well-insulated and maybe renewable energy-powered central office? This is a live debate that we are seeing at the moment.

There is a new carbon calculator, which is an open-source carbon calculator. This has been developed to enable any business to get its employees to find out what their carbon emissions are. We are starting to see some businesses now thinking about whether they should be providing incentives, advice or even investment into people's homes to cut the carbon emissions being created when they are working from home. Organisations such as NatWest are leading on that conversation. In terms of the role of business—behaviour change, carbon emissions—it is quite an interesting side-effect of what has happened with Covid. Encouraging businesses to follow that good behaviour, start to measure those emissions, start to help their employees to make changes at home, is quite an interesting shift.

Q77 Lord Grantchester: I am interested in your interactions with companies, and the companies themselves. In terms of your interactions, do you feel that you are engaging, or the company is engaging with you, at the right level of authority? Do you feel that that has an effect? Do companies see you as the means rather than the end, and when you are working with one, do you feel that the company itself changes?

Trewin Restorick: That is a really brilliant question. I am quite long in the tooth on this, and 10 or 15 years ago it would have been the sustainability team within a company. That would probably have had great ambitions but a limited budget and limited influence—the projects that came about were like a toe in the water, not really systemic change. What I have seen in the last two or three years, as concern about climate has grown, as public concern has become more visible and as businesses started worrying about their resilience and reputation, that conversation has now ramped up. As a small example, Starbucks voluntarily introduced an additional charge on its disposable cups, which immediately doubled the take-up of reusables. That is quite a decision for that company; none of its major competitors did it. We worked with Just Eat on food waste, finding that chips are the most wasted takeaway food. We persuaded Just Eat to think about “waste less” portion sizes, because it was portion size that was creating waste. These are small changes, but for a company they are quite a significant change in its business model.

Similarly with the Co-op and John Lewis—I can name lots—I am starting to see those tentative footsteps start to go into a bigger shift of the business model. But the fundamental challenge all businesses have, particularly in the fashion industry, is the fashion industry is based on fast fashion, throwaway society, that is how it makes its money. None of those companies can see the alternative business model that makes the degree of profit they are seeking, or need to seek, that is circular; they are tied into the linear model. There are steps that the Government could take to shift that.

I do not want to hog the conversation, but we are working with a brilliant B Corp Scottish company that can repair, wash, and get the circular economy going. It cannot make the economics work, but it said that if you took the VAT off that repair/reward cycle, that 20%, it would be able to compete; you would grow more jobs in the UK, you would have a more circular economy. But unless you can shift that fundamental economic model, and certainly the fashion industry and some others are just stuck on that track, no matter what they are saying around the periphery, it will not work.

The Chair: Thank you for that. The focus on the fashion industry reflects some conversations we were having last night about how hard it is to address that particular business model. Lady Young.

Q78 Baroness Young of Old Scone: We have talked about the fact that in some instances consumers are driving the changes that happen, along with a whole load of other reasons, but how can businesses help consumers to get into a place where they actually want more sustainable products or services? Can you create the market as opposed to the consumers creating the market? Is one of the big tools in the hands of retailers and manufacturers their own staff group? Because we all work somewhere, except for us—well, I suppose we work here. Tell me about how the consumer market, including the employee market, can be influenced.

Trewin Restorick: We have worked with a lot of businesses on this model—the best campaigns involve employees and customers together. We worked with Tesco employees and customers around food waste. People relate and have a strong relationship with businesses that they go to and use a lot; businesses have almost a trusted voice in this, more than people probably suspect. When Tesco says to its customers, “We are going to help you reduce food waste in a really practical way. Our co-workers and our colleagues are doing that as well”, and provides them with a really structured, properly run behaviour change campaign, customers will respond. We cut Tesco customer bills on food waste by £18 a week and now Tesco is about to take that to a much larger scale across its customer base. There are certain areas where a business and a customer working together can achieve things.

We did something similar with BT around technology—how can technology help you reduce your carbon emissions? We found sweet spots with all its different customer segments about where it could use technology to help them reduce energy use. We did a scheme with Marks & Spencer around sustainable eating, showing that the business can play a very proactive and successful role in shifting people’s diets so that they are cheaper, healthier and less meat and dairy based—again, the results were quite significant. But businesses have to be bold, take that lead, take risks and engage with their customers and their co-workers around such topics. I am constantly aware that you are taking the things that work for the business and work for the customer. To the point about consumption levels, that is where those models just do not work, because it is not in the business’s interest to ask the thorny question about, “Well, do you need this in the first instance?”

Angela Terry: The other issue for consumers is convenience. If businesses want to push the greener products, putting them in a predominant place and making it easier for consumers to choose, rather than have to dig to find a specialist, do the right thing, that instantly shifts it into a default option, rather than another obligation on shoppers.

The other thing businesses can do is use their massive marketing capacity. The public are now adamant that they want to do something to protect the planet, but there is a perception problem—they do not know exactly what they should be doing. There used to be a government campaign called ACT ON CO2, which was lost quite a while ago actually. There is a gap—everyone knows there is a climate crisis, but the citizens are not quite sure what to do about it. They obsess about their recycling, because that is the thing that is visible, but it has probably one of the lowest impacts in terms of climate actions of what people can do themselves. What businesses can help people do is take them on that journey to make the good decisions and make those products and services that help the most the default.

Baroness Young of Old Scone: Rosie was having kittens yesterday, if you will pardon the expression, about Sainsbury’s having introduced a sustainability aisle. Is that a good thing or a bad thing, in terms of what you were saying about making it easy for customers? Is it good?

Angela Terry: Yes.

Baroness Young of Old Scone: Or do you just get the greenies going up the sustainability aisle, and everybody else shopping?

Angela Terry: The biggest way to create change is to make it normalised, basically. If everyone else is doing it, then other people do it; it is what your friends and family are doing. Having a green aisle means that it has gone from one or two products to a whole aisle, which must be a good thing. It would be great if every section of the supermarket had clear labelling of what a good carbon footprint was; similar to food labelling, but consistently—not each industry choosing its own style. Palm oil is a really good example—people do not want palm oil, but if you try to figure out how to avoid palm oil, it is so confusing. It is about making it easy, not difficult, for the customer to choose the green option.

Professor Ken Peattie: If you look at the research, both in terms of consumers responding to initiatives and employees responding to in-company initiatives, a big factor is confidence in what you are doing, and this idea of perceived consumer effectiveness: “I know what I'm doing will make a difference”. Some research done by Kantar, published back in September, asked people: “What do you think could make a big difference?” Apart from recycling, all the things that people felt would make a big difference were very much at the governmental level: energy infrastructure, preventing deforestation, changing agriculture policy. They gave much less emphasis to things they could do, such as flying less or using the car less or eating less meat, or even attending to home energy; those kinds of factors were given a relatively low level of importance. The key thing that companies can do is really build confidence in the consumers, and have messages that say: “In doing this you will make a big difference, you will contribute”. With that confidence and making it easy, making things available, that is when you start to see real progress.

Angela Terry: Just on how to engage employees, it is adding it to their performance reviews and having it as a clear KPI. Some of the major oil companies have put carbon into the performance bonuses of their directors. If the fossil fuel companies can do it, then why cannot everyone else? Less carbon, I should say!

Q79 Lord Bishop of Oxford: One of the things I noticed in the written material that you provided, which was really helpful and inspiring, was the emphasis you place on really granular data, and also the emphasis you place on very good clear communication, often diagrammatically. That has come across in some of the examples you have given. Can you see ways in which those practices could be extended across business and also extended into government? When I compare what you provided with what government departments have provided us with recently, they are light years apart in the quality of information and presentation.

Angela Terry: The UK has a world-leading advertising industry. Most of the people in there are quite young and they get this problem, and they are desperate to get involved and help communicate to the public climate change and how it works. One of the best examples is transport. For example, currently when you buy a car there is, like there is on your fridge, an energy certificate from A to E. But people are still buying bigger and bigger SUVs because of the marketing of the car industry. Three-quarters of SUVs are in urban areas such as Kensington and Chelsea, and Westminster. I have been in rooms where we have had conversations about how those labels should have children wearing masks on or asthma inhalers, to actually start to show the damage, both in terms of toxic air and climate change. Some of those cars are 350 grammes of CO2 per kilometre. Whereas if you then look at alternatives, electric bikes, light powered vehicles such as scooters, they are still illegal in this country unless you are renting them through a council scheme, but they are quite low-cost to buy, so why would you rent one? In terms of getting rid of the petrol crisis and how expensive petrol and oil are, that is a really easy way to fix.

This industry is full of jargon, numbers, statistics and acronyms. There need to be really clear, simple visualisations that show people where the big issues are that they can make a difference to, and how easy it is to make a difference. I am giving this only as an example and people can improve on it, as I have been told not to do this because it encourages alcohol consumption. But if you do loft insulation, you pay back that money within less than a year, but for some reason, people are not; even the people who are able to pay do not have the motivation to do it. What I said was, it is the equivalent of six bottles of Prosecco being dropped at your door for free every month for 40 years—will you please sign up to get your loft insulated? It is about how you communicate this and how you explain the benefits to people. Visual is so much better so we need to get rid of the jargon and things like that.

Lord Browne of Ladyton: Can I pick up on this assertion that you made, that we have a world-leading marketing and advertising industry? I think that is true, but that it is substantially motivated, or could be, by the desire of the young people that work within it, to make it more consistent with this programme that we are talking about here. I have to say that that is not my observation. Baroness Boycott made an incredibly powerful speech in the House the other day, a very short speech in a debate about the damage to health that certain foodstuffs were causing. The assertion was being made in the debate on behalf of the advertising industry that it was not to blame for it because its advertising was ineffective; that was essentially the point. Baroness Boycott just said that this is a very strange business that tries to persuade us that we should continue to do this, because what it is doing does not work, which of course we know is not right.

I am a big football fan, and I cannot bear to watch football on television because of the amount of betting advertising that there is around it—all driven by very clever young people who know exactly how to appear to be encouraging people not to harm themselves, but still to continue to bet, which is the real message. If that is true and we can, by our recommendations, unleash the potential of that, that would be an amazing plus for us to achieve.

This is a very long question, I apologise for it, but I think it is only fair to ask you, so what I am going to ask you is: where will I find the data that convinces me that there is this untapped resource in our advertising industry that we could help unleash on the country to make a much more sustainable environment that we are working in? Where is the data, please?

Angela Terry: I have given a talk to the advertising sector, which has set up something called Ad Net Zero. I have had companies promise to help me do this if we can, as government and as business, deliver this message to the public. There are quite a lot of them doing alternative, Banksy-style things. The ones that come straight to mind involved swear words, which I will not repeat, but currently there is a lot of harm being caused by advertising. For example, ads will always feature those cars that I mentioned in woods or in beautiful rural areas, and they are the areas that are being harmed most by climate change. At the moment, marketing is seen as convincing people to buy things they do not need and cannot afford, that is causing huge harm to the environment—that is one way you could explain what marketing is doing. But you use all that potential to do the opposite.

The best example was the Covid campaign that the Government did for people to stay home, stay safe and protect the NHS. We absolutely can do public communications really well when we want and need to. This is the best example of where we have to change the whole of society. It is rapid, far-reaching, urgent transformation across every sector, every family, every community—that is what we have to achieve in the next 10 years. We have not even really started getting that message out there, and that is what we really need to do.

Trewin Restorick: Can I just say quickly, advertisers are paid to do things, that is how they work. We have spoken to so many advertising agencies with very well-known companies which have superb sets of sustainability credentials. Then, when you go and talk to the marketing agency selling the deodorant or whatever brand it is underneath that overarching thing, that sustainability target is nowhere near their to-do list. It is like “You have to get this on the shelf, you have to get the sales, you have to get in front of people”. They might be very bright people, but they are not being asked to do the things that we are talking about here; they are being asked to sell more product and make it desirable, and appeal to whatever audience there is.

There is a huge disconnection between what businesses are saying at the top level. I could probably name about 20 businesses where I have spoken to their CEO and he has said, “Oh, we're committed to this”, and then I have spoken to their ad agency, and what that CEO has said is nowhere near the brief that the ad agency has been given on the particular product line that they are selling. Until you break that massive disconnection, the ad agencies will do what the ad agencies are paid to do.

Lord Browne of Ladyton: That is pretty much my impression of what goes on in the world, but if there is this massive untapped resource of young people and there is a way into this, it would be helpful if we were directed to who these people are.

Angela Terry: Yes, Ad Net Zero is the umbrella group within the advertising industry. Is there another one?

Trewin Restorick: That is the formal one. Informally, there are two or three groups of big businesses now talking about how they change their advertising. If the committee is interested, I could forward their details.

Lord Browne of Ladyton: We are interested.

Trewin Restorick: But they are less in the public domain, shall we say.

The Chair: We certainly would be interested; we have a session coming up on communications and we have received written evidence from the ASA—it is certainly something we would like to have a balance on.

Trewin Restorick: The ASA is starting to ramp up on this. It is calling out the greenwashing a lot more, which I think is incredibly positive.

Q80 Lord Lucas: A lot of my question has been asked already, but I will ask it anyway and then put a gloss on it, which I think goes to some of the points that have already been raised. My question is: what barriers do businesses face when developing, producing and marketing green products and services? To what extent do lack of infrastructure, incentives or regulation act as barriers? To what extent do consumer trust and the consistency of sustainability information act as barriers?

Something that the professor and Angela noted, and we saw yesterday in the Climate Assembly, was how much consumers are not focusing on things that they could easily do, which would actually save them money. Dropping the heating a couple of degrees, for instance, or travelling less, did not seem to be on their menu at all. What can the Government do to help change that? Would awards to retailers for really promoting green products help? Can the Government affect reputation in that sort of way? Could we subsidise Which? and One Home to give a really effective and easy source of information as to exactly how providers of products were responding? It seems to me a fundamental problem if people just will not save the planet by saving themselves money and changing their lifestyle. It is really hard to see how government gets at that.

Angela Terry: As the founder of One Home, I would say yes to that, obviously. The key thing is that it is not that they are not willing to do it—it is they just do not know how much money they will save. I watched Martin Lewis’s show yesterday where he was talking about energy bills and he never once mentioned insulation; he just talked about taking meter readings and things like that. How are the public supposed to know all this? A lot of the information is in niche, sector-specific silos, basically, and you have to navigate all that. Which? is behind a paywall, obviously, and One Home is a very small organisation, so there is a lack of public information for sure. Insulation and even electric car charging is another really good example where there is a gap in government policy.

The Climate Change Committee has very clearly mapped out the pathways that are needed to reach net zero. There are huge policy gaps, huge valleys where there is no implementation process at all, and that is where industry cannot respond. The best thing government could do is bring in the policies that get us to net zero—UK plc will benefit hugely from that economically with jobs. It is cheaper to go green generally, and it also tackles all the other problems that we know, such as the burden on the NHS from cold homes and people getting sick from not being able to afford heating, and air pollution. Here in London, Sadiq Khan announced another proposal yesterday to try to prevent the 4,000 Londoners dying prematurely every year from toxic air, so there are loads of co-benefits as well.

The key thing is we need that consistent long-term government policy to tackle things such as heating, insulation and transport emissions. I mentioned electric car infrastructure charging, because at the moment it is very random and ad hoc—you need lots of different apps on your phone—so we need different ways. When new technology comes in, we need new standards that meet the new technology to ensure that customers are protected, it is fair, and it is not as confusing as it sometimes currently is.

Paul Ellis: Certainly, in the housing sector, if we had a more integrated supply chain and better information, you would see the take-up of renovation and retrofits more clearly. At the moment we tend to be working with pioneer borrowers who have assembled the information for themselves, which is clearly not possible for a lot of people out there because they are too busy and/or they do not know what products are appropriate. If we can put together packages for delivery, where you would have a project manager who was trained in delivery of retrofit in hard-to-treat houses, you could get a proper energy survey done, you could have a project programme set up to allow you to undertake that retrofit programme over time, making sure that each step you take does not preclude the next step, which can then be aligned to your personal family budget. If this were done in a concentrated way with skilled contractors, we would make a lot of progress.

Some of those elements were considered within the green homes grant, but they were not brought to fruition so we have taken a step back. Every time one of these programmes fails, confidence is reduced, which is a big problem.

Lord Lucas: Who would you get to put together such a programme—who do you think could do it and would be trusted?

Paul Ellis: There are organisations out there such as TrustMark, which deals with certification of contractors in various elements of the supply chain. There are companies out there already that are producing proper energy programmes for individual buildings. There have been certain programmes delivered by government looking at the supply chain issue. The problem tends to be that those programmes end early. The budgets are set over a number of years and then they are removed, leading to a stop/start approach which does nobody any good. It means that businesses are not incentivised to invest in the delivery.

Lord Lucas: But when you get a government programme—say, putting solar panels on your roof—you still cannot trust the Government to be giving you support in the decision you take. They will happily push you to take on solar panels which have a payback of twice their expected life, but you need somebody who you can really be sure is going to give you the right information as to what to do in your particular circumstances, rather than the right information to fit in with some government scheme for which the KPI is “How many square metres of this can we install?” It seems that we lack a body in which to place our trust for some of these things.

Paul Ellis: There are companies out there—I can name names outside of this meeting—but, yes, there are providers out there providing reliable information and enabling you to create programmes that can be passed over from one owner to the next, to allow that whole proposition to be taken forward.

Lord Lucas: Looking at other aspects; one of the difficulties in transferring from bad to good is that the good is seen as a premium product. Oat milk costs 50% more than cow’s milk. What is going on? How do we tackle that sort of aspect of industry and start to say, “We want to move towards green, and therefore we will make sure the price structure is right for that”, rather than saying, “Oh, there are some well-off people who want to go green, we can exploit that by pushing the price up”?

Angela Terry: There are two aspects to that. First, generally green is cheaper. I mentioned transport—walking, cycling and public transport are cheaper than buying a massive car that guzzles petrol which is increasingly expensive. There is a perception that it is more expensive to go green, but I would say it is a perception. If you insulate your home, you get that money back in the first year. If you are doing loft insulation, it is a fit and forget technology—it should be there for 40 years and it adds £13,000 to your home value because the EPC rating goes up. It is a no-brainer in terms of financial cost-benefit analysis.

For the things that are more expensive, though, that is where government policy has to come in, because at the moment polluters are not paying. There is not a carbon tax that goes across all the sectors that addresses the fundamental unfairness that climate change impacts the poorest the most, and that the people with the biggest carbon footprint are the wealthiest people. It is only when we have a fair system, where polluters are taxed and that money is recycled, with the public knowing it is recycled, into the expensive upfront capital costs that are needed for something like heat pumps—until we have that carbon tax the polluters will keep getting away with causing this huge problem, and then saying that they cannot make their business work to go green.

One really simple example is recycled plastic. Those nurdles are more expensive than buying raw fossil fuel, oil, plastic, and so if a company wants to do recycled material it is more expensive; whereas if there was a simple regulation that said 50% of all plastic has to be recycled, that would happen automatically. There is legislation, and then there is tax—it is all the carrots and sticks that the Government have to play with—to make it fairer for the people doing the right thing to get on and do it, and not be at a disadvantage to those who are free-riding on everyone else to keep the profits in their company, which is an unsustainable business model.

Professor Ken Peattie: I would follow that by saying that there is a big body of research on willingness to pay, which basically asks consumers: “How much more would you be willing to pay for a more sustainable product?” But it is actually a very loaded question, because that assumes that whatever you are paying now is the correct price and that the more sustainable option is somehow a luxury or premium product. You can ask the same question by saying: “Would you like to carry on buying products that are artificially cheap, because other people or the environment are meeting the costs of unsustainable production?” We need to move to a stage where we are looking to bring those external costs into the prices that consumers pay and that companies are charging.

It has to be a mixture of a lot of the things we have been discussing: less meat and dairy, more walking and cycling, using public transport, making electronic products and clothes last longer. All those things we can do can save money, but then, yes, we are going to have to pay higher prices on those products that are currently artificially cheap because somebody else is paying the cost.

The Chair: Thank you. We need to keep things moving along as I have four members who want to come in. I have Baroness Young, Baroness Boycott, Lord Grantchester and the Duke of Wellington.

Q81 Baroness Young of Old Scone: We have not really talked about carbon labelling; where do you all stand on that? Is it in the too difficult box?

Trewin Restorick: There was a great story about somebody trying to carbon-label a packet of crisps. It was their first step on this, and it took them bloody ages, even though it was just a packet of crisps—

The Chair: Do not swear, you are live on TV.

Trewin Restorick: Sorry, it took them an incredibly long time. Then they produced this packet that says, “This has produced this much carbon”, and had no impact on the consumer at all, because they were like, “What do I compare this with? What do I do with it?” From what I have seen, to get a true carbon measurement on any product—and that was just a packet of crisps—is incredibly complicated because you look at the whole life-cycle analysis and it gets really detailed. I am a bit sceptical about it. If you did all that work and took all that time, I wonder whether it would actually make a difference in terms of what the consumer buys. It goes back to the previous question, that people are still not really getting to grips with what carbon is and what climate change is. Is it enough for them to make changes in purchasing decisions? We are not there at the moment. The research we have done shows that people do not understand what net zero is. The technical language we are currently using does not lend itself to a shift in consumption choices. In all honesty, I am sceptical about it.

Baroness Young of Old Scone: We had a lovely one yesterday from the Climate Assembly, where somebody had done the maths of the comparative carbon impact of having a dog, or was it a cat?

The Chair: It was pets generally.

Baroness Young of Old Scone: Indeed, and driving a car, and it is a bigger carbon impact to have a dog.

Trewin Restorick: The biggest carbon impact is from having a child and getting married. You look at these things and think, “Hmm, this could be quite difficult messaging we have here”.

Baroness Young of Old Scone: Is everybody agreed that trying to find the holy grail of labelling is off the agenda?

Angela Terry: Sometimes we show on TV the difference between rice and potatoes, or the difference between a beef burger and a plant burger, or a latte and an Americano. That information is fascinating, because there is actually quite a huge difference between those three products that I mentioned, which people just do not know about. How do we take the information that researchers gather and disseminate it? That is where I go back to my point that companies have that opportunity to encourage people to make the lower-carbon choices—they are probably best able to decide how. I go back to the traffic light system for the food industry: it has resisted quite strongly a uniform way of doing that. There is always a way to present data that is needed. I wanted emojis, including the face mask, on cars. You do not have to give the grammes of CO2 per kilometre because that does not mean anything to anyone, but if you show a happy child with healthy lungs and a child in hospital with asthma, or however you do it—and I am not an expert in that—you can pictorially explain to someone how this fits in terms of carbon footprint.

Professor Ken Peattie: The research tells us that people do respond positively to labels, but they tend to respond most often to words and symbols and sometimes colours they are familiar with. They are quite easily distracted, so if it is on a pack label, for example, a special offer of buy one get one free will often take their attention away from the sustainability label. Often it is difficult to get complex information into simple symbols that people will respond to. I was involved in a study where we were showing people different types of labels and trying to get them to say what they thought they meant. When we showed the aeroplane label on food to show that it had a high carbon footprint because it is been flown in, some respondents said, “Oh that means it’s lovely and fresh because it has been delivered by air”, so people do not necessarily have the response you are expecting from them with these things.

Also, there is a lot of proliferation of labels. You are getting dietary information and ethical information about avoidance of child labour or fair trade, all these other things, and you might have labels to do with environmental protection, rainforest protection, and so on. There can be so many labels that people start to become a bit confused between them.

Hugo Spowers: I am no expert in labelling, but I absolutely buy that if the price was equivalent, it would have an influence. I do feel that we ought to come back to carbon pricing as being a much greater, more persuasive and more effective driver than relying on people being wealthy enough to make a decision based on labelling if the price is against it. We are riddled by market failures all around us, and if a bad is cheaper than a good, there cannot be a clearer demonstration of market failure than that, so carbon pricing is terribly important, I feel. With junk food and all the externalisation of health costs, that is clearly a market failure. I know there is all sorts of arguments about government intervention, but carbon pricing is such a profound one at the moment that it deserves more attention.

Angela Terry: Tobacco is a really good example where warnings have been put on things. If you think what harm some products and services can do, warnings about climate risk and impacts seem appropriate given what is at stake.

Paul Ellis: If you are going to have labelling, you must ensure that the methodology behind it is robust and kept up to date. Energy performance certificates, for instance, do not really account for the value you get from a heat pump at the present time. We have had extreme examples of properties where the energy bills are probably less than £100 a year—well, they were—but they would get an EPC of G as they do not fit the model because it is too simplified.

Q82 Baroness Boycott: You have partly answered Lady Young’s question, but I just wanted to bring up the subject of health, and certainly where clean air is concerned the argument has become strong through health. It seems impossible with the food companies to get them to have any, as you said, red and green labels or have any clarity. It is true that on the whole, the lower-carbon product is also the healthier product. You would feel that you had a winner on your hands, but actually it is almost out of the system of low-margin returns, sell more product and sell more bad product, so what is the way around that advertising?

The speech that Lord Browne referred to was about a government amendment to ban junk food advertising during children’s television hours. In fact, a number of members of the Conservative Party were fighting against this on the grounds that it would be very deleterious to ITV, I cannot speculate what their reasons were, but the lobbying that goes on within this space, such as putting things in different things, having different colours, doing a buy one get one free against something useful, is all to confuse you. If you could snap your fingers, how would you do it? How could you actually get the right information and start to straighten up? Also, there are the hidden costs, although they are not that hidden because children end up obese and ill. They are not hidden at all, really. Who wants to start? Angela?

Angela Terry: First, I would not worry about ITV’s revenue. I work with a lot of print and broadcast media and when they are offering green days and such, the businesses are climbing over themselves to support them and have their advertising space recognised.

Baroness Boycott: That is a very good bit of information.

Angela Terry: So, their revenues generally go up if they are seen to be doing green programming or print. In terms of your question, it is about taking it back: what motivates people is cost and convenience. Basically, the ONS does the household budget and in terms of food shopping meat makes up a disproportionate amount of people’s shopping. It is about what motivates and benefits people. Like you say, if we go down the green route, we have happier, healthier, cheaper products and services and that is ultimately what we need to do. How we get there is with government policies, both regulation and carbon tax, and we have to do this communication piece. It is the missing piece of the jigsaw. Over 50% of policies require behaviour change to reach net zero so we will not get there unless there is government regulation and policies in place to make it happen.

I always say this, because I go on the radio quite often to talk about gas boilers and heat pumps: no one is in love with their gas boiler. No one is at home showing their friends their gas boiler. They want warm, cosy homes. I talk to my friends, and they have thermostat wars with their husbands about what temperature they have it set at. There is a new campaign called “Flick Off Putin”, I do not know whether you have seen it, to turn the thermostat down by one degree. There are so many funny ways you can communicate how we can do this, and we have the potential, we have great creative people, we can take what we know are facts, and turn them into a wonderful campaign. But it would not happen in the timescales we need with the transition that we need, which is across all sectors, without government regulation and policies.

Baroness Boycott: Which would be consistent across the industry?

Angela Terry: Yes.

Trewin Restorick: Food is a bit complicated, though. We have done a lot of research around food and, yes, cost and convenience are there, but there are also many other things that lead to people's food choices, such as the skills they have to cook different things. In particular with meat, meat and masculinity is a really strong connector and there is a perception that if you eat meat, you are stronger. It is driven into the perception of a lot of people, and it is why it is so difficult to use rational arguments to get people to shift their diet. There are cultural aspects and different societies, and this is where the advertising industry comes in. We have done research with regular gym users where we shifted them away from a less meat-intensive diet and they were actually fitter and healthier—a different sort of level of fitness in certain ways, so you can do it, but that is not the common perception. You can stick a label on it, but you have to realise that there are a lot more cultural and emotional underlying issues, as in most behaviours, which are leading people to make certain choices.

Q83 Lord Grantchester: Excuse me a little bit, Chair, in terms of understanding whether we are going through questions logically; we all seem to be a little jumbled in our questions, so I apologise if this is slightly out of context.

Picking up the phrase I heard about five or 10 minutes ago about free riders and obviously on the recommendations to government and government policy, and all my thinking around that in terms of the challenge of pricing, the choices the Government make and historical background, and how they then interact between the consumer paying or the taxpayer paying. The prime example of this is obviously road pricing in terms of the motorist feeling that he or she is very heavily laden on tax and when he or she decides whether to take the car or train to Bristol because of the costs involved and how they compare. I am interested in that sort of barrier or thinking, and what government can or cannot do in how the structure of policies can or has been changed. Have you been engaged in any of that sort of thinking and what are your thoughts on the difference between the taxpayer and the consumer in your activities?

Angela Terry: Road transport is a really fascinating one because £27 billion is currently allocated from the Treasury for road improvement schemes. The president of the AA came out and said, “That is not a good use of taxpayers’ money, given that since Covid we are all working from home more and we are all using remote screens and these sorts of things”. Compare that £27 billion on roads with how much goes into trains, excepting HS2, and particularly buses, because buses are used four or five times more than trains, and then how much is on active transport.

Walking across here, I saw a big Jeep knock down a man on a bicycle. The way to get people to cycle is to have separate, segregated cycle lanes. That is proven. You can do all the campaigns you want, all the incentives, but unless you build the infrastructure, people will not shift behaviour if it is not safe to do so. So, in terms of roads, and transport is our biggest source of greenhouse gas emissions in the UK, there is a real issue with how much government money still goes to road building compared with other alternatives.

Lord Grantchester: That is probably the one that has had the least change by government.

Angela Terry: Yes, it has had the least change. Again, that is because of lack of policy. The 2030 ban on petrol and diesel cars is fantastic because what happens then is industry responds. Most new cars are bought by fleet operators, so it is businesses responding to how they can save money because electric cars are cheaper. With the pollution problems put out to local authorities, all the different schemes in towns around the country, are different. So, if you are a company looking to have a fleet of cars, you have to have all electric cars. It is the only way to navigate what is now a very jumbled environment.

When there is legislation such the 2030 ban on petrol and diesel cars, the industry will respond but the problem is that the car industry makes the most profit from SUVs. It has been marketing SUVs, so that is where our air pollution problem lies. The IEA, for example, says that all the savings we have from the modal switch from electric cars has been outdone by the increase in emissions from SUVs, so it really is a case of how we tackle transport and how we disincentivise buying big cars and using them when you do not need to. That has to be providing a safe, affordable alternative and therefore the money.

Regarding your point about tax versus consumers, ultimately, it all comes back to: but what is the fairest way to do that? Generally, the tax system is fairer. There are two things. One is that the Treasury has not really looked at the cost of climate change properly. Nicholas Stern did something 15 years ago where he said, “For every pound invested, you save £5”. It is actually far more than that, so that piece of work has not been done. In terms of levies on electricity bills, everyone appreciates why we need to pump-prime new industries such as the windfarm industry and the solar industry. As they have become more mainstream, those costs have come down rapidly. It is at least 50% cheaper to have wind turbines power our grid than gas-fired CCGT plants. Taking that electricity levy and putting it into taxation would make it fairer on the consumer. Until the Treasury really takes seriously the costs of climate change, we will not start to see the investment in the pathways that we need.

Hugo Spowers: On this point about the taxation, the language used is terribly important. I remember, probably 30 years ago, seeing Ben Elton in a stand-up routine talking about whenever any money goes into the road system it is an investment, but when any money goes into public transport it is a subsidy; what is the difference? Terminology is terribly important. I am completely with the idea that although we make cars, we are probably the only car company in the world that thinks there are far too many cars on the planet, but the answer is not to have no cars.

The one associated issue that government could do something about is honouring technology neutrality, which is touted. We currently have a single-minded drive towards battery electric vehicles. We absolutely believe there is a very important role for battery electric vehicles. Even though petrol and diesel are not very different, we found different applications for both of those. Battery electric vehicles and hydrogen electric vehicles are so different that we need them both but for different applications. We are told about technology neutrality all the time. Over £1 billion has gone towards the battery electric vehicle industry and, to my knowledge, £23 million towards hydrogen.

Furthermore, battery electric vehicles are a mature technology; we have had them for as long as we have had petrol cars. The land speed record was held by battery car in 1899. Really, we are subsidising something that the industry has known about and should have done something about for a very long time. Unfortunately, it has not done anything about hydrogen, and now that it has to make zero emission cars, it is making battery cars because it is the only thing it has in the cupboard. So, we do think that this technology neutrality is a terribly important message that we hear all the time, but it is not being delivered on.

Duke of Wellington: I have found this discussion incredibly interesting, but I wanted to come back to something that was mentioned by Professor Peattie right at the beginning, which was the Take the JUMP campaign. I had read about this in the Guardian on Monday, and I took a screenshot of the six shifts that everyone is asked to subscribe to. I will just take two as an example and would be very interested in the comments of you all as to how you achieve that. For example, it says, “Buy no more than three new items of clothing per year”. Now, how on earth do you achieve that? There are different types of clothing: clothing made of natural fibres and clothing made of synthetic fibres, and it seems to me there is a huge difference between the two. Should you, for example, have different VAT rates on different types of clothing?

Another of the six points is, “Take no more than one short haul flight every three years”. Well, how do you achieve that? It is the aspiration of many families, whatever their income level, to have a foreign holiday once a year. That is quite a natural thing that people want to do. Are you going to put a higher tax on aeroplane flights? If you did, that would, of course, very much hurt the lower-paid because the well-off and the businessman can afford the extra tax. These are the sorts of things that I would be very interested to have your comments on.

Professor Ken Peattie: In terms of the clothing expenditure, I hate buying clothes so the idea of buying only three items of clothing a year quite appeals to me. But what we can say is the UK buys 60% more clothing than we did in 2000. The average garment is worn only 14 times. We have moved to thinking of clothing not as something we invest in but as something that is just a disposable purchase that we buy for a use and throw away again. That is just not a sustainable model. Moving towards clothes that we feel will last and that we can use for many years, reducing the need for new clothes purchases, is one of the inevitable things we need to do. The clothing industry accounts for 10% of industrial carbon emissions and it has a wide range of impacts. Again, yes, it is going to change the way we consume and live, but it does need to be part of the solution if we are serious about this.

It is interesting about flying and this idea of almost democratising consumption—that we should all be able to enjoy the good things in life that some people get to enjoy—but we already have the situation where it is a minority of people that fly. The emissions associated with air travel belong to a minority of the population, so it is already unfair. You can say, “Well, it’s a shame that more people cannot fly more” but when budget airlines were introduced, one of the rationales of that was saying it will democratise air travel—more people will be able to travel than ever before. Actually, a far greater effect was it allowed the people who were already flying to fly even more. The idea that we can allow air travel to become an aspirational thing, that we all increase the amount we do, is not realistic or sustainable.

Moving towards the idea of frequent flyers paying more—having a more realistic cost in terms of aviation fuel by factoring in the carbon costs, for example—would raise the price, yes, and would perhaps push air travel out of the reach of some, but also maybe moving towards using train services, for example, to get to Europe rather than a flight. It is currently cheaper and more convenient to jump on a plane to hop from many places in the UK to Europe than it is to get on the train, even though the train infrastructure is there. There is the potential to move people more towards that sort of mode of transport, but also maybe to encourage people to enjoy short-haul trips in terms of using land-based transport to enjoy parts of the UK more.

It is one of those things. People want to be well travelled and it is seen as a good thing to be. People do enjoy foreign holidays but we should think of it this way: if you had a friend who you knew was financially living beyond their means to a point where they were facing disaster, you would be asking them to cut back on their expenditure. In many ways, we are in a similar situation now in terms of material consumption. The science tells us we are living beyond our means materially and we have to cut back on some of these key things, such as meat and dairy, fast fashion, air travel and going through electronic devices every 18 months rather than waiting until they actually die. These are things that we do need to change.

Duke of Wellington: I am very interested in your comments, but what worries me in all of this is the extent that behaviour is changed through taxation or whatever other means: it is always going to be the lower-paid people who will be deprived of whatever it is that they would like to spend their money on because it becomes more expensive.

Professor Ken Peattie: You have to think of it as not just about this one part of the system, but our whole social system and think of it in terms of things like taxation and welfare. We know during the first six months of the pandemic, the world's billionaires got 27.5% wealthier and their wealth got up to £10 trillion. There is money there which could be redistributed in order to make the production and consumption agenda more equitable. We have to think of these things as a total system and not just one part of it.

Trewin Restorick: Can I respond on the clothing one? We have done a lot of work on this and the figures are right: we are buying more clothes, we throw them away quicker, we wear them less. We have really delved into this and it gives an indication of the difficulties around behaviour change and such. What we found is that young people, quite often, if they are tagged on social media in a certain outfit, will not wear that outfit again because they have been seen in it. The pressure on social media in terms of how people want to be seen is huge. During Covid we have seen people buying more clothing online, and they tend to buy three or four items, pick out the one they want and return the rest. The carbon footprint of that process is absolutely crazy—think of the congestion on our roads. We are pretty certain that a lot of that clothing will not go back on sale again so what happens to it? Are there things that government can do there about working with companies to stop this multiple buying of stuff?

You are seeing poorer people being hit hardest. There are more and more schemes which are encouraging young people to buy now, pay later. So, you are seeing a real incentive for people who are probably struggling financially to buy more because they are under social pressures to buy more. They may not be feeling confident in their body or their looks and their image, and there is all this pressure to buy stuff, or get stuff, which they do not have to pay for until later. We are building a younger generation which is going to be heavily in debt, and driving this consumer society and driving fast fashion. When you look at what is behind that figure, it is fantastic that Take the JUMP has made that statement, but to shift it, there are probably four or five policy items that the Government need to think about to change that.

Duke of Wellington: If I may just ask again, do you make in your own mind any distinction between natural fibres and synthetic fibres?

Trewin Restorick: It is incredibly difficult to do that. I will give fur as a really extreme example. “I am not going to buy fur; I am going to buy fake fur.” Fake fur is plastics. It has microfibres. We know the massive impact of microplastics in clothes when you wash them, so you get into a really complex debate about: is a plastic product better than wool product or is it better than a leather product? The debate around different types of fabric is really complicated. The parliamentary Select Committee suggested having the equivalent of the plastic bag charge on every item of fast fashion clothing. So you add a 5p charge, but that money goes back into promoting a more circular fashion industry. A simpler solution such as that, which gives a really stark message, might be quite a good way of at least raising the debate and avoiding some of the huge technicalities on issues.

Angela Terry: If I could go back to the issue of the poorest people because that is fundamentally a key driver about climate change. Some 50% of people in the UK take no flights in a year and 15% take 70% of the flights. If you fly first class or to faraway destinations such as Australia, you are basically emitting an average person's annual carbon footprint. Flying is very much a wealthy luxury; it is not an essential.

When it comes to the impacts of climate change, let us take flooding as an example. If you are in a low-income household, you are far more likely not to have insurance because you cannot afford it. One in five properties in England is at high risk of flooding and if your home is flooded you are going to be out of your home for up to a year. You do not have friends with big houses so you have nowhere to stay, and you will have to be in temporary accommodation. Then you cannot afford to repair your home and put back furniture and all the things that you have lost. In terms of where the pollution is coming from, it is generally wealthy people, but the people who are suffering most from climate change, both in the UK and around the world, are the poorest.

Duke of Wellington: Therefore, would you recommend increasing the taxation on air travel?

Angela Terry: Well, the Chancellor just halved it.

Duke of Wellington: That was for domestic, was not it?

Angela Terry: Yes, just before Cop 26. One thing I saw a lot on Twitter was everyone trying to get to Glasgow being outraged at how much the train cost and how cheap it was to jump on a plane. That is where we have everything wrong.

Lord Browne of Ladyton: I do that journey every week, back and forward. I can do it for £26 on an aircraft and it costs me four times that on the train.

Hugo Spowers: This conversation highlights one other language question and that is use of the term “consumer”. It implies and suggests that progress and well-being are driven by consumption. We all know that actually they are driven by conserving rather than consumption. It would be a terribly easy term to abandon and we really should do so very swiftly.

The Chair: Thank you. I have four members who want to come in but I am afraid I am going to say no to all of you because we need to ask the last question.

Q84 Lord Bishop of Oxford: That falls to me, thank you. We have to make recommendations to the Government at the end of this inquiry on behaviour change, so could I ask each of you what one or two recommendations you would make to the Government in terms of their responsibilities on encouraging behaviour change? Let us begin with Paul.

Paul Ellis: My big ask would be to remove VAT from energy-efficiency products because this will give a massive boost and incentive to retrofit and renovate our housing stock, which is one of the worst in Europe and, as my colleague has mentioned, plays to the fact that there is a lot of fuel poverty in this country.

Hugo Spowers: I mentioned technology neutrality, I would put in a plea for government to encourage multiple solutions and the step changes are the ones that I believe we really need now. They are the ones that look most risky through the lens of incrementalism and nothing is more risky than trying to incrementally navigate our way forwards. They are also the ones that are the cheapest to support. Step-change solutions are much cheaper supports than trying to optimise mature any things—technologies, processes or systems. It does mean supporting braver—as it is perceived—solutions that are not being pushed by industry, which is really driven by very narrow bands of what it can implement in its models because they are models are set up to do what we have been doing in the past.

Trewin Restorick: We are operating in a sea of confusion among citizens; they have no idea what is going on. I would say to the Government—and this is a bit cheeky because I have three—first of all to be totally honest about the impact it is having on households in terms of flooding and their lifestyles. Be consistent: so not doing things such as dropping the charges on air travel because that immediately makes the public think it is not serious. Finally, being brave in terms of the legislation they put in place that can drive better change. We know what that is, but I do not see the Government being brave on it.

Angela Terry: Being brave is fundamental. We have never been in this position before, and what we do in the next 10 years is irreversible and essential for keeping the planet going as it is. There are two things; one is to implement the policies recommended by the CCC to get us on the pathway to net zero. Without the policies it will not happen, it is all hot air and speeches and targets. Secondly, we need a public information campaign. That is missing piece of the jigsaw. The public are ready, we are pushing at an open door, and things such as insulation and the national retrofit scheme will not work unless the public know the benefits because there is a level of disruption and cost. So we need that public information campaign with clear targets and number one has to be insulation because we are in a cost-of-living crisis.

Professor Ken Peattie: We have mentioned a lot of the big-picture things, including energy pricing, public procurement, and regulation tax, all those big things we could do. It is also very important for there to be local and visible action now rather than targets for 20 years’ time, which Governments have often favoured: “We’re going to do X in 20 years’ time” rather than, “Okay, let us do this now”. So doing very tangible things people can see in their own communities is important. Investment in safe cycling infrastructure instead of conventional road investment, and often supporting community schemes. A lot of the things we have been talking about today where people’s carbon impacts fall is to do with the food they eat, the homes they live in, their transport to and from their place of work; there are a lot of good things going on in local communities at a practical level that, again, could be supported, and allow people to really see the changes that could be made and boost their confidence in being a part of that change.

The Chair: Thank you. Given that you have been so brief, we can probably fit in one quick last question. Lord Browne was the first of the four members, if you wanted to ask your question?

Lord Browne of Ladyton: I just want to ask a very general question. This particular project that we are on at the moment is driven by the advice from the Climate Change Committee that 62% of what we are seeking to achieve by 2050 has to be delivered by behaviour change. The scale of the challenge is phenomenal. All of you, and I thank you for it, have helped us understand how people’s behaviour can change and some of you have examples of success. But, with respect to all of you, they are all on a pretty small scale. The challenge is: how do we achieve the sort of step change in behaviour?

The persistent campaigning and government policy in the anti-smoking environment has significantly reduced smoking in this country since 1970. When we convinced people that they should stop doing it in public places, it led to a massive step change. What is the equivalent in this very complicated and changing environment to that kind of campaign? That is the sort of thing we are going to have to do in a very complex and changing environment. Does anyone have any magic words for us as to how we scale up what people can all do at a level? Angela, you have 483 million people connected to your website, you are the person we really need to talk to.

Angela Terry: I piggyback on everyone else's platforms, that is how I do it. Normalising it is the ultimate thing. It is that society licence. People brag about going abroad and they put pictures on the internet and think it is something to be proud of. They are bragging about going to ski resorts that do not have snow because of global warming. It is turning it into something desirable and normal. I cannot leave here without mentioning the Greggs’ vegan sausage roll, because if you give people the opportunity, they will buy it. They will make that shift. It is about making it normal, and the only people who can really deliver this are the Government setting the framework, but then businesses delivering it to the consumer, to the citizens. Businesses have such a role to play.

Hugo Spowers: I love the question because, clearly, we have to get to scale but it is a big, brave shift we have to see. One dictum that our business lives by is that there is never enough time to do the job properly, but there is always enough time to do it twice. I know we cannot regulate businesses’ business models, but until businesses’ interests are aligned with those of society, I do not think we have any hope of achieving that scale.

Last week I was being interviewed by Hogan Lovells, which is working with the IoD on a better business Act and there were some very radical things on the table that we were talking about that would not conceivably get through. But one thing I do think could go in is that all businesses should have a purpose in their articles of association, and that purpose should be aligned with the interests of society. It is a feasible change to make, and it is a perfectly reasonable request in return for the privilege of limited liability.

Trewin Restorick: Can I just answer this? I have been an environmental campaigner for 35 years—and I have failed, and I know that. But what has been frustrating me is that I always feel like I am fighting against government rather than with government. I have seen time and time again from the Government: “I will if you will”, setting up the Energy Saving Trust, for example, doing these things, and you think, “Oh, thank goodness, at last”, and then it gets dismantled. Actually, we have done more dismantling in the last three to five years than any time that I have seen. You feel like you are a brave soul fighting against the stream because government is not on your side, and when you look at the scale of the climate impact, you think, “Why are you not helping? Why are you not enabling society to see that we are on an unsustainable path?” I just do not understand it. I could list initiative after initiative that consecutive Governments have started; they have started to work, and then they have gone. I can see no desire in central government to truly make this happen.

Paul Ellis: A big contribution could be made by businesses actually working together. We have an example in the Green Finance Institute, where financial organisations and others are coming together to demand change—a stronger voice to ask for policy change, but also in terms of getting power behind improved consumer offerings. We are now starting to see green mortgage products become more widely available. We have been a lone player for many years. Many of those do not have the impact they should have at the moment, but it is beginning to come, and it is about exchange of ideas. It is why we participate in organisations such as the Global Alliance for Banking on Values. It is why we are a member of the organisation Bankers for NetZero. There is massive power in terms of shifting payable change if we can just share ideas and move forward together.

The Chair: Thank you. I am glad we had time for those final reflections. Did you want to add anything? Super. Thank you. It has been a really fascinating session. Thank you so much for the contributions you have made. We really, really appreciate it. I now, a couple of minutes late, formally close the meeting. Thank you very much indeed.

[1] Angela later clarified that she was referring to wind farms in this statement.