Putting Net Zero at the heart of corporate strategy

Adam Borrie recently joined the ARK team as a Senior Consultant, we asked him for his thoughts on the challenges of meeting Net Zero.

Sir David Attenborough said in a speech at the recent G7 summit, “Climate change is a threat to global security that can only be dealt with by unparalleled levels of global co-operation.  It will compel us to question our economic models and where we place value… And through global co-operation, we may achieve far more than tackling climate change”.

Granted, Sir David was speaking to global leaders, but the problem of climate change, and the need to reduce carbon emissions is a global problem that needs to be applied, nationally, geographically, and ultimately locally.

His short message contained two themes that should resonate with leaders within the social housing sector:  the need for wider co-operation and the need to challenge existing economic models.  And therein lies the problem.  Developing Net Zero asset portfolios will require a fundamental culture shift and I am not sure whether organisations within the sector have grasped this yet.

Committing to, planning for, and delivering Net Zero homes will require a whole organisational response.  It will require CEO’s to initiate, or galvanise commitment to, the goal; for asset teams to work with finance teams to help calculate, identify, and ring-fence the required funds; asset teams to then prepare complex investment programmes and work with delivery teams to undertake largescale works covering a multitude of building components in unison; for neighbourhood teams to include customers from the outset; and for data and intelligence teams to monitor whether the theory and in-use metrics are aligned.

The strategic business plans of social housing providers (councils, ALMO’s and housing associations) all follow common themes, and this is unsurprising given they provide services to customers and localities that also share common traits: the need for new housing, the aim to create thriving communities in run down and low-income areas, the recognition that their customers should have a voice and influence, and an acknowledgement that services could be delivered better or more efficiently.   The purpose of these providers is to correct market failure and to help mitigate the new social risks resulting from income and service gaps in post-industrial labour markets.  Their purpose is a noble one and let us be honest; they are the only ones trying at the scale required.  So, we do not criticise them for what they do, we are helping them to achieve.

What is striking about these corporate plans, is that they often reflect the operational silo’s that exist in most, if not all, organisations.  Their business plans tend to provide purpose and direction for specific departments and services areas rather than attempt to unify the business around solving what are complex social problems.  Many of the plans cite the desire to create a prosperous and thriving community where people feel safe, secure and happy.  None provide the blueprint for how this will be achieved.  Instead, there is the hope or belief that investing in the existing stock, or building new homes, or providing training or employment opportunities, or investing in the social infrastructure within communities, will move them a little closer to achieving this goal.  In reality though, this activity is pepper-potted all over the place.  It tends to lack co-ordination or be concentrated in areas, without an on-going commitment that assesses whether a change has occurred and is sustainable.

Social problems do not respect organisational silos.  We know this from the previous attempts of the sector to tackle homelessness.  This required and still requires a wholistic response that involves the provision of low cost, secure and safe accommodation, often funds to then furnish these homes, the application, processing and receipt of state benefits, on-going tenancy support, tackling any mental health or drug or alcohol dependency issues, and ultimately the transition into paid work.  Homelessness is still a major issue because significant and large gaps exist between what services housing providers provide, what social services can cope with, and who co-ordinates the other support services that might be required – if they are available at all.

For those organisations that have tried to find a solution to homelessness in the past, the lessons are there for the learning.  The same could be said for anti-social behaviour, affordable social care, poverty, or unemployment.  These lessons need to be acknowledged and considered in helping organisations meet their net zero carbon requirement.  It starts with a narrowing of the goals that unify service areas around what is fundamentally a single problem, but one that requires a multi-dimensional response.  This will create the right environment for co-ordination and co-operation.  It will also give asset teams and finance teams the green light to develop the right economic models because they will not have to compete with other business plan objectives that, however noble, fall outside of the legal requirement.

As Sir David said, in tackling climate change “we may finally create a stable, healthy world where resources are equally shared and where we thrive in balance with the rest of the natural world.  We may, for the first time in the entire history of humanity, come to know what it feels like to be secure.”  If we substitute “world” for “community”, then the business plans of social housing providers up and down the country, will have been fulfilled.

Adam has provided a thought-provoking response to our challenge. It is a challenge to ARK as well as the sector and like you we are responding as best as we can and helping our clients work through the issues to design and now implement their Net Zero plans.

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If you would like to know about the work we are involved in or to talk through your approach with Adam at aborrie@arkconsultancy.co.uk or Kieran Colgan at kcolgan@arkconsultancy.co.uk