Labour must work with business to deliver net zero
Labour was founded as the party of the workers – and continues to reflect that today. In recent years, it has campaigned against universal credit cuts and regressive taxation; stood with trade unions to campaign for a real living wage; and outlined a fresh approach to workers’ rights for the gig economy.
The Party recognises that the transition to net zero must be a just one: committing £28 billion per year until 2030 to tackling the climate crisis while delivering secure, green jobs and supporting the most vulnerable.
During the current energy bills crisis, Shadow Secretary of State for Climate Change and Net Zero Ed Miliband has outlined plans to shift towards cheaper, renewable energy sources in the long-term, while taxing North Sea gas and oil producers to help limit the expected rise in bills, particularly for those on low incomes.
Labour rightly identifies that tackling the climate crisis and improving living standards are not competing interests, but inseparable from one another. By 2050, we simply won’t have achieved one without also achieving the other.
There is a second, false dichotomy that Labour must continue to tackle in parallel: that the success of forward-looking, responsible businesses is either not linked, or even in opposition to, building this greener, fairer world.
Increasingly, consumers believe that businesses must deliver a social purpose. From the Black Lives Matter movement, to working conditions, to climate targets, companies are under greater pressure than ever to demonstrate their contribution to wider society.
The pandemic has underlined this: businesses large and small relied on the taxpayer to stay afloat, while many made vital contributions to the national effort, from food supply chains to vaccine development and deployment.
While certain companies remain intent on social and environmental exploitation, which Labour should address, it is no surprise that organisations such as the Confederation of British Industry enthusiastically acknowledge their members’ role in building back better.
As we rebuild from the COVID-19 – in a greener and more just manner – the next Labour government has a unique opportunity to harness this momentum.
Under Keir Starmer, Labour has already made important progress. Shadow Chancellor Rachel Reeves recently set out a "pro-business" plan for the UK economy while Ed Miliband has astutely highlighted the impact of rising energy bills on small businesses as well as households.
But there is more to do. Pension schemes, for example, should – and are increasingly willing to – invest in projects and companies with environmental and social impact, without sacrificing financial return. Further guidance and support from a future Labour government could accelerate this.
Many businesses are seeking to develop their environmental and social purpose, but often such claims are unquantifiable and incomparable. The next Labour government, working closely with businesses, trade unions, climate experts and community voices, should support the development of such standards.
Social enterprises and charities play a valuable role in the country’s social fabric, particularly in more deprived areas. Labour’s approach to ‘levelling up’ should consider how to further assist such organisations access long-term, sustainable finance.
Labour rightly understands the need to deliver a just transition to net zero. Communicating and coordinating effectively with the private sector, alongside the trade union movement and wider civil society, could determine how successful it will be.
Joe Dharampal-Hornby
Impact Investing Institute