Miranda Barker: The business case for sustainability

Miranda Barker OBE, Chief Executive of East Lancashire Chamber of Commerce

In the third of our thought leadership interviews, UK Business Climate Hub talked to Miranda Barker OBE, Chief Executive of East Lancashire Chamber of Commerce.

The East Lancashire Chamber, is recognised within the UK and overseas as a leading regional Chamber that specialises in providing low carbon business support.

The East Lancs Chamber does this through two complementary hubs:

Chamber Low Carbon which provides free support to Lancashire SMEs who are transitioning to net zero
RedCAT (Lancashire Centre for Alternative Technologies), a business support ecosystem that helps entrepreneurs take green innovation through to full commercialisation, manufacturing and out to world markets

As well as being East Lancs Chamber CEO and Chair at RedCAT, Miranda Barker has been the owner of an SME, a director within a PLC, and an environmental consultant for 30 years.

As an SME expert, we asked Miranda about the business case for sustainability for SMEs, and how government policies, RedCAT and COP29 can help accelerate the net zero transition.

Why should sustainability be a priority for SME?

The message we’re saying is sustainability is no longer a nice-to-have. It’s now a business essential.

There’s a change in supply chain practices. The NHS is leading the charge in public procurement processes. Any supplier into the NHS now has to have a Carbon Reduction Plan (CRP) that meets government specifications from April 1st 2024.

For any NHS supplier a CRP is essential, whether you’re selling muffins in their shops, painting the front of the building, or supplying bedpans and bandages.

The rest of the public sector will go the same way and that will affect nearly 80% of all UK small and medium-sized businesses – the very businesses who don’t yet think net zero supply chain pressures necessarily apply to them.

Every contract tender you go for now has a social value statement section which is scored based on all the detail you provide and evidence of yearly improvement.

Any larger business is also monitoring its scope 3 emissions and choosing who to work with based on what their supply chain means for their own scope 3 emissions. Businesses have to get on top of sustainability otherwise they won’t win the tenders.

Bank and insurance companies also want to see you are on top of your carbon footprint to make sure your business is going to survive. Not being on top of net zero is a threat to their investment. Customers and employees are also making choices based on your environmental capabilities.

The other side of the story is energy bills. Energy bills are a much higher percentage of standard business spend than they have been and you’ve got to be on top of your costs.

Your business has to be alive to be able to decide to be green or not, and your energy bills are a huge part of deciding whether your business is going to survive or not.

How should SMEs start on the path to net zero?

Just start.

Start by looking at behavioural change and understanding your energy bills. What’s on overnight, what can you turn off? The UK Business Climate Hub gives you information on basic things that don’t cost you anything.

The Carbon Reduction Plan is a good basis for this. It helps you map the things you need to report. You can do this from year one, the methodology is on the website and it costs you nothing.

What are the barriers for SMEs?

The first barrier is either money or time for an SME. Time shortages mean SMEs carefully prioritising what to focus on first.

The government can help SMEs with financial support that combines grants, subsidies and loans.

Grants go a long way to just helping people decide to start to act.

Subsidies encourage people to try new climate-related products or services before they become mainstream. Case studies that showcase the benefits of these products of services can help influence the majority.

Government-backed loans also take the worry away from SMEs that schemes might fold.

What steps can the government take to accelerate the net zero transition?

There is so much the government can do to propel the take up of low carbon technologies, and help our businesses survive and thrive and deliver a low-carbon future for the UK economy.

There are four policy changes government can make:

Get all public sector procurement on the same footing as the NHS: from local authorities to public education have to have a CRP and make plans to improve it.
Put stringent planning regulations in place across the UK for any new build, or any refit or licensed premise like an HMO – whether residential or commercial
Increase landfill tax to deter businesses from the end of pipe solution.
Take subsidy off fossil fuels and let market conditions come into play.

These policies will make government money or don’t cost anything, and will push the take up of carbon technologies forward.

It’s great to see the brakes coming off on onshore wind, and the launch of GB Energy, led by Jurgen Maier. He is someone who really knows the North West’s leading position in low carbon tech, with its focus on government investing in partnership with the private sector to lever in inward investment.

I echo Ed Miliband’s speech at the Innovation Net Zero conference in May 2024, about it being time to end picking a favourite technology and only backing that one. There’s a clear message coming out now that this commitment to a pro-climate policy is a whole government position right to the top.

How can low carbon innovation be something the UK can lead on?

The UK can really lead here. We are expert at making and designing things and innovating. This is a huge global economic opportunity.

We must make sure that the UK is left standing flat-footed on the starting line, with China and the US leaving us behind. We mustn’t the mistakes we made with hovercrafts and jet engines, which were innovated in the UK but the manufacturing, money and jobs are generated in the rest of the world.

Putting the investment into low carbon innovation translates into solid multiples of:

much more investment coming into businesses
jobs being created
products being sold to the world

That’s where RedCAT comes in. We’ve secured £2m of capital investment from the government and we’ve invested as grants into 9 new sustainable products. Those companies have now secured £11.5m of new investment and sales and created 300+ jobs, and that’s still going up.

This is the 3rd innovation support project I’ve run, and you always see a profit margin ratio of 1:5 over 2 to 3 years, after subtracting all of the direct and indirect costs involved. And it’s normally a lot more. You get products that are manufactured in the UK, sold internationally that also solve the climate problem.

What is RedCAT’s role as a business accelerator of low carbon technologies?

RedCAT role in accelerating the commercialisation of low carbon technologies includes:

assessment and demonstration of product capability and viability
advanced research and development (R&D) into technologies, materials, and manufacture
financial support for initial R&D costs and working to secure long-term funding and investment opportunities
support through the full commercialisation journey
locating appropriate sites for manufacturing products

Can you give an example of how RedCAT’s support helps projects?

A recent example was that some of the grant money we gave O-Hx Organic Heat Exchangers went to build a demonstrator.

Funding full-sized demonstrators is vital. Demonstrators bridge the gap, the so-called “Valley of Death”, between university early stage innovation support with a half-sized working prototype to commercialisation of UK inventions.

Demonstrators that are actually attached to a business that might become your first customer is the key – rather than being isolated on a pure research site. They provide open access for future customers to see a working example of your product and convince them to buy it. These first orders convince banks that you are viable. And it doesn’t have to be equity funding, you can get straightforward debt funding because you’ve got customers.

You’re participating in COP29 in November 2024 in Baku, Azerbaijan. How can COP29 help put green technology at the forefront of climate ambition?

This is the fourth time we’ve taken a delegation of low-carbon innovators to COP.

Businesses go for three reasons:

To meet potential customers, suppliers and trade partners; the Azerbaijani government has invested heavily in starting to build low-carbon technology for their own country and this is a great business opportunity for the UK.
To learn from others talking about climate and innovation.
To be in the mix with the negotiations and front and centre stage as solution providers with technologies that can help bring carbon-free industrial revolution to the global south.

The third reason is for me the most important one. Businesses are often not featured in this narrative. We are working with government departments in the run up to COP and informing negotiations to make sure business is present and part of the solution.

It’s all about output; helping companies really make the transition, creating jobs, achieving manufacturing and commercialisation and getting it all the way into the global south.

We haven’t finished if we’re not seeing our technologies help to make climate solutions in countries where this is needed right now. It’s an economic argument and a climate argument.

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