Insight 22 April 2020

Today is Earth Day

As the world, quite rightly, focuses on the health and economic crisis that is arising from COVID-19, Earth Day provides a vital reminder that we must not overlook the climate crisis. 

The environment we live in has not been forgotten during the last few weeks. Images of fish visible in canals in Venice, animals repopulating areas and even a visible reduction from space of the greenhouse gases in our atmosphere have been flooding social media. We are starting to see more clearly than ever before the impact we have on the planet, and how quickly it can start to recover. 

However, the reality is that once this crisis is under control, the focus will shift to economic recovery. How can we encourage businesses to keep climate and carbon reduction at the centre of their business strategy? 

We are currently seeing energy prices at the lowest they have been for some time and this is already influencing buyer behaviour. Energy prices are low due to a number of factors, such as: consecutive years of low demand due to mild winters, weak oil prices, and a significant decline in energy demand since the COVID-19 pandemic began. This has resulted in an oversupply of gas, coal and oil and therefore electricity prices have fallen sharply. 

What has become apparent is that the record low prices of Corporate Power Purchase Agreements (cPPAs) have attracted many organisations’ attention. cPPAs have a key role to play in our future energy transition, assisting businesses to decarbonise their energy mix and helping them to reach their net-zero targets – which will exist long after this crisis ends. Businesses can take the opportunity of these low energy prices to commit to a long-term deal that makes good business sense as well as meeting financial and sustainability objectives.  

Of course, some businesses might be unable or unwilling to enter into long-term energy agreements with so much uncertainty at this time. However we have successfully shown that putting energy at the forefront of business planning will help to reduce cost. Even now during this crisis we are saving clients 35% on their energy and carbon consumption by remotely optimising the energy consumed across sites which are closed. Going forwards, businesses that put Net-Zero targets at the core of their business strategy will reap the rewards. Innovative business models such as Carbon Performance Contracts through Mitie’s Plan Zero will enable customers to identify and target cost and carbon savings across their portfolio, supporting rather than hindering economic recovery. 

Earth Day 2020 may not be celebrated in the way we thought it would be when the year started. However, let’s not falter in our determination to tackle the climate crisis and make 2020 a year we remember for the positive resulting impact on our planet.

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