Seeking the green light for economic success

Is the UK’s self-image as a leader in the ‘green economy’ a comfortable fiction? If so, we need to up our game since despite the arguments of climate-change deniers, there’s growing evidence that ‘green’ is good for jobs, growth, and the future of the planet.

In terms of the UK’s ‘green’ report book the London School of Economics and various distinguished partners concluded in January 2024 that we must try harder. Overall, UK investment is described as “too little, too volatile and insufficiently forward-looking.”

On the other hand, the Energy and Climate Intelligence Unit (ECIU) and the CBI found that the UK’s ‘net zero’ economy grew by 9% last year in contrast to the 0.1% growth of the economy overall.

These verdicts can be reconciled by concluding that we should focus even harder on ‘green’ investment since it offers the potential of fast growth at a time when growth – sustainable growth – is desperately needed.

While looking to develop businesses of the future (often the focus of public funding, with sometimes misplaced optimism), we must not neglect the many existing successful businesses that can be greener and more sustainable, while also increasing their competitiveness and sustainability.

In a nutshell, we can’t depend on promises - the future has to start now.

To make this work required mutual support in developing successful, global sustainable business models.

Since AES Engineering (AESSEAL and AVT Reliability) have made sustainability and support for net zero a central part of our growth strategy, and we are supporting the Betterworld Solutions project, a partnership approach is a key part of our agenda.

With this in mind, I will be looking closely at options for how we can support a Knowledge Sharing event for interested businesses in South Yorkshire.

The prize is clear. Sustainable, well-paid jobs now, and for the future.

The LSE report provides some valuable insights. It argues that the competitive economy of the 21st century will be based on resource-efficient innovation requiring early investment in a range of future-proofed assets to substitute fossil fuel and resource use, and to reduce waste and pollution.

It concludes: “Digitisation and responsible use of artificial intelligence (AI) will be central to the transition to a sustainable and efficient economy, optimising systems through real-time monitoring and management and contributing to the speed, efficiency and effectiveness of the new economy”.

All this may seem rather general so it could be useful to compare this with AES Engineering’s experience where we have been systematically investing not only in our people but in the tools that will allow us to continue to succeed in global markets.

We are a net zero business in terms of our direct and indirect energy use and our supply chain (Scopes 1,2 and 3) and are investing £29 million ($40 million) by 2029 in the environment via energy-saving, solar panels, batteries and various other measures including solar farms, a tree walk, and most recently tree planting with a new Betterworld Forestry brand.

We are also using robotics and AI so that we can make our factories work round the clock and focus staff on satisfying high-value tasks. All this from our Factory for the Future in Rotherham (AES Engineering’s global headquarters) which brings total investment in the area to around £90 million.

Yet we sometimes face questions over whether this kind of investment is ‘too much’.

I am strongly of the opinion that, if anything, it is not enough.

It may help businesses who are wavering on the brink to understand the results of investing in technology, people and the environment. At AESSEAL plc we expect to have driven our UK productivity up by 35% by the end of this year, compared with when we started our latest drive during the Covid pandemic in 2020. We expect that our next profitability figures, out in May will comfortably prove the case that we are on the right path.

The ECIU report says that overall, in 2023 the UK’s ‘green’ sector was responsible for the production of £74bn in goods and services and 765,000 jobs, with hotspots across the country, rather than being concentrated in London and the south-east. At AES Engineering, we count ourselves as being part of the ‘green’ sector and as being an ‘advanced engineering’ company by any reasonable definition.

South Yorkshire is attempting to ride both these waves and, setting aside for the moment possible differences between businesses or practices that favour the green or net zero economy and the sustainable economy, this does seem a topic whose moment has arrived.

However, the current positivity on sustainability is constantly being questioned. The ‘green economy’ is like a small flame that needs to be carefully nourished. Investment is one key, but knowledge about what to invest in, is equally important.

Even in a traditional engineering environment the drive towards digitisation and AI cannot be ignored, and this is especially the case in a developed economy such as the UK’s where we certainly cannot compete in terms of wages.

Part of this drive is efficiency and profitability and part of it is ‘green’ but it takes both these factors to add up to ‘sustainability’ – both for the business and for the planet.