Cost of living isn’t an excuse to sacrifice investment into saving the environment

The UK economy is in a worrying position. Inflation reached 10.1% in September, cost of living (exacerbated by the energy crisis) has put many businesses on the edge as they face soaring bills. On top of this, climate change has brought more severe weather conditions; most recently demonstrated by the record setting heatwave over the summer and disastrous flooding events around the world.

However, the economic issues have taken hold and are putting huge pressure on utility companies to find ways to cut costs for consumers, whilst also fixing the inefficiencies that come from relying on decades old equipment. The Government temporarily reversed its ban on new fracking sites and companies are being forced to cut back on ESG initiatives to focus on revenue generation.

Unfortunately, by focusing solely on the short-term crises in this way, we are jeopardising the UK’s long-term net-zero goals. Being able to respond to the current crisis without ignoring environmental goals is therefore going to be crucial.

Resist the pressure for quick cost cutting

The UK’s purchasing manager’s Index found that many businesses have been delaying investment decisions. Understandable given the current economic environment, but it is important they consider what will help drive growth; the answer doesn’t just lie in sales and product development. Sadly, many investors and CEOs don’t yet recognise this, meaning many are beginning to once again overlook ESG credentials as it slips further down the priorities list. Business leaders should not forget the benefits positive social and environmental governance can bring.

For example, young, highly skilled workers now place a greater premium on working for companies that demonstrate they have purpose, compared to their older colleagues. So, by not including ESG in core planning, firms are putting themselves at risk of losing the best talent to competitors that are able to reflect the values of younger generations.

Don’t fall back into bad habits

The utility industry plays one of the most important roles when it comes to protecting our environment. From providing energy to power our homes, to water, these companies are a critical part of the economy; they are also at the forefront of ensuring we have renewable and sustainable supplies. However, it is no secret that many utility firms still rely on outdated equipment and technology. For instance, it is estimated that water companies lost 1tn litres via leaky pipes in 2021 , and office buildings lose ￡60m in wasted energy every year. Currently though the country is looking in the wrong place to fix these issues. Instead of looking to controversial sources for more supply, like fracking, Government and utility companies need to find ways to reduce waste in the sector. This is where digitising becomes crucial.

Smart meters and IoT sensors can help households and businesses identify where waste might be happening, so that steps can be taken to correct it, whether that’s leaky pipes, or rooms being unnecessarily heated in office blocks. Engineers can also use drones to inspect remote sites, instead of travelling out themselves. Not only does this improve health and safety, with no need for engineers to take part in risky activities like climbing pylons, but it helps increase the speed of monitoring and repairs and means workers can cover more ground than before.

Don’t let the short-term blur long-term vision

While there will have to be trade-offs over the next few months, taking these measures to ensure long-term investment doesn’t come to a halt will enable the UK to stay on track as we head toward our net-zero goals. It will also ensure our utility industry is more robust in the future, reducing wastage and increasing efficiency across the board. Only focusing on the short-term will leave us in a sticky situation when our current crises are resolved.?