Businesses of all sizes, and particularly small and medium sized enterprises (SMEs), should be supported in their efforts to cut carbon emissions as this is good for their bottom line, as well as being of benefit to the environment.
Participants in the latest Scotsman Sustainable Scotland podcast, in partnership with Royal Bank of Scotland, explained how taking action now to reach net zero can give businesses a boost in several ways.
Judith Cruickshank, managing director of the commercial bank at Royal Bank of Scotland and the climate sponsor for the commercial bank across NatWest group, along with Dave Reay, professor of carbon management and education at the University of Edinburgh, and director of Edinburgh Climate Change Institute at the University of Edinburgh, discussed the ways in which businesses can be more sustainable.
Participants in the latest Scotsman Sustainable Scotland podcast, in partnership with Royal Bank of Scotland, explained how taking action now to reach net zero can give businesses a boost in several ways.
Judith Cruickshank, managing director of the commercial bank at Royal Bank of Scotland and the climate sponsor for the commercial bank across NatWest group, along with Dave Reay, professor of carbon management and education at the University of Edinburgh, and director of Edinburgh Climate Change Institute at the University of Edinburgh, discussed the ways in which businesses can be more sustainable.
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00:00 Hello, I'm Rosemary Gallagher and welcome to our Sustainable Scotland podcast, brought
00:07 to you by the Scotsman, Scotland's national newspaper since 1817, now bringing you fresh
00:12 and relevant content for the 21st century. Sustainable Scotland is how Scotland is doing
00:16 its efforts to be cleaner and greener for the next generation. And this episode is brought
00:20 to you in partnership with Royal Bank of Scotland. I'm joined by Judith Cruickshank, Managing
00:24 Director of the Commercial Bank at Royal Bank of Scotland and the climate sponsor, the Commercial
00:28 Bank across the NatWest Group. We're also joined by Dave Ray, Professor of Carbon Management
00:33 and Education at the University of Edinburgh. He's also Director of the Edinburgh Climate
00:36 Change Institute at the University. In our conversation, we're focusing on Climate Springboard,
00:41 a collaboration between Royal Bank and the Edinburgh Climate Change Institute, and looking
00:44 at its work to support small to medium sized businesses. And over to Judith and Professor
00:49 Ray to introduce themselves. Sure, thanks, Rosemary. So I'm Judith Cruickshank, and I'm
00:53 the Managing Director of the Commercial Bank at Royal Bank of Scotland and the climate
00:57 sponsor for the Commercial Bank across NatWest Group. Thank you, Judith. And Dave, would
01:01 you like to introduce yourself? Sure. My name's Dave Ray. I'm Professor of Carbon Management
01:07 and Education at the University of Edinburgh. Also direct Edinburgh Climate Change Institute
01:12 at the University of Edinburgh. Thank you both. And starting with you, Judith, could
01:17 you explain how Royal Bank is cutting its own carbon emissions and also helping customers,
01:22 especially small to medium sized businesses on their journeys to net zero? So there's
01:27 a number of things that we're doing. As you say, our first thing that we talked about
01:31 when we started talking about climate was the need to get our own house in order. So
01:35 one of the big areas I work on is actually helping customers transition. But it's really
01:38 important that we learn from doing ourselves and set examples. So we've taken a lot of
01:45 steps. We piloted some of our customers' products and propositions. We've also been looking
01:52 at what our policies on things like travel and how our colleagues are getting up and
01:59 down to London, for example, and really looking at just what are all of the areas that we
02:04 contribute to climate emissions and then working through those steadily in a plan to reduce
02:08 them. Thank you, Judith. And Professor Ray, what would you say about this? Because businesses
02:13 are under a lot of pressure when it comes to cost of living crisis as are consumers.
02:17 So how can they, in your view, become more energy efficient and more cost efficient at
02:22 the same time? Yeah, I mean, they go together. I mean, we know we've just seen particularly
02:27 over the last year how energy prices have got so high, but also that volatility, you
02:33 know, so they just eat into overheads. There's that kind of that worry about, you know, what
02:40 the future holds if they get higher and, you know, and tariffs go up. So actually, that
02:45 energy efficiency part, so understanding what where your energy is being used and reducing
02:53 that where it's possible to getting more efficient, that's going to save money. And at the moment,
02:57 it's saving us more money than ever if we can do it. So it's crucial, I guess, for the
03:04 long term sustainability of a lot of businesses, particularly SMEs. But as part of that, a
03:09 bonus feature is the less energy we use, the less carbon is emitted. So that is a crucial
03:14 part of addressing climate change at the same time.
03:19 And you get many businesses say, I don't have time to think about cutting carbon, what to
03:22 focus on my cost, my bottom line. Is that something you come across? And if so, to both
03:27 of you, what do you say to those businesses?
03:30 So we don't hear that per se, but we do hear businesses who are really struggling with
03:35 multiple competing pressures, particularly at the moment in the economic climate. So
03:39 there are businesses will say, I'm focusing on keeping the lights on today. I don't have
03:45 the headspace to think about how I'm keeping the lights on in five years time, 10 years
03:49 time. And so, as Dave said, we really started focusing on where are the win-wins? So where
03:55 can we help customers save money today and reduce their carbon impact? So often through
04:02 energy efficiency, but often that comes through things like being able to purchase the premises
04:07 that they've been renting, where they've not been able to make changes to make themselves
04:10 more efficient because they didn't own the building. And then moving to a place where
04:15 they own that building, they've then been able to make changes to it, which again has
04:19 dramatically reduced the amount of energy they're using and therefore their costs. But
04:23 also looking more broadly at that for other win-wins, so things like supply chain. So
04:29 we know that many of the larger corporate customers are obviously having to report their
04:33 carbon footprint. They're having to look at their scope three emissions, so the emissions
04:37 of their supply chain. And they're demanding of their suppliers to be able to report their
04:43 carbon footprint and be taking actions to reduce it. So again, we can help our customers
04:49 be more competitive and be able to get position in those supply chains.
04:53 Yeah, I mean, I think I would echo those comments and say, you know, everyone's really time
05:00 poor, right? And so having climate change is this extra thing that you're supposed to
05:05 know what to do. That's a real challenge for everyone, particularly SMEs in the current
05:11 environment. And so if you say, "Oh, we need a carbon footprint," you know, it's kind of,
05:15 "Well, how do I do that?" And I think so that the Climate Springboard program that one of
05:22 our teams in ECCI leads on from the university, I just love it because what it does is do
05:30 that hard work for the businesses. It does that, and often it's actually relatively straightforward
05:36 work, but there's just not that headroom in terms of time. And what they're able to do
05:39 is say, "We'll help you produce a carbon footprint, but not just know the numbers and not just
05:46 know the different scopes of emissions that we just talked about, but actually what you
05:50 can do about it and where in your business, you know, short term, medium, long term, you
05:55 can make changes which will save you money." So making it easy so that you can carry on
06:00 doing your day job and your night job, which is running the business, but actually doing
06:04 that in a way which is saving you money, like I say, cutting energy and cutting carbon.
06:09 And if I can just build on that, I mean, when we were setting up the partnership with the
06:13 climate change institute, that was our thinking. So we had launched Carbon Planner, which is
06:18 a digital tool to help businesses come up with their, understand their carbon footprint
06:22 and the actions to reduce it. And that's great if you know where you're going, you know where
06:27 you're starting. It's really, you know, user friendly, but some customers do want a bit
06:33 more handholding. They do want to talk things through. And that's where the program with
06:38 ECCI really has come into its own. So it's getting those customers into, you know, cohorts
06:44 of anywhere between 10 and 20 customers who are going through that journey together. And,
06:50 you know, the team at ECCI have been amazing at just helping them understand where do I
06:54 find the bits of data that will help me understand what my energy usage is and where do I find
07:00 that quickly? And then being able to share best practice with each other as well, which
07:05 we see come across, even when you're not in the same sector, that ability to share lessons.
07:09 Now to your original question, as we do hear from people, I don't have time to go on a
07:14 four week program. You know, when I say four weeks, it's, you know, four sessions, you
07:19 know, including the kind of check back in later on. And we've come up with various solutions
07:24 for businesses like that of suggesting, well, if you've got someone who's more junior in
07:28 your team, you know, send them, make them your climate rep. You know, that's a great
07:31 opportunity for someone or, you know, sign up two people and it doesn't have to be the
07:36 same person at each of the workshops. But we do know that is a real pressure on people
07:41 and we do try to accommodate the program around that as well.
07:45 You've mentioned obviously Climate Springboard there, the collaboration between Royal Bank
07:49 and ECCI. And what's the target SMEs? Is there any business, how do you take part in Climate
07:54 Springboard? What type of business do you have to be? What criteria do you have to fill
07:58 to be able to take part in the program?
08:00 So it's really open to any of our customers. As you say, it's targeted SMEs. We find our
08:08 larger commercial or more corporate customers tend to have a team or a person who's already
08:14 dealing with their climate plan and looking at it. It's not safe. If they felt they would
08:18 benefit from it, they couldn't come on it. But it is targeted at those businesses who
08:22 don't have the luxury of having that dedicated climate team or person and who will benefit
08:27 there for the most of getting access to that expertise from ECCI. At the moment, it's restricted
08:34 to Royal Bank of Scotland customers because we really wanted it to be that value add.
08:38 Our carbon planner tool is available for non-customers as well. But we said this is a really special
08:43 resource to get and we wanted to make that only available for customers. We are, however,
08:48 about to run one exception to that, which may mean we do something like that going forward
08:54 where we're working with the Highlands and Islands Tourism Board to run it with all businesses
09:01 from the tourism sector up in the Highlands and Islands together because we think it's
09:05 a really good opportunity for those businesses to learn from each other. But in order to
09:10 take advantage of it, to get to know more about it, really customers just need to talk
09:13 to their relationship manager who they'll know well within the bank or come and talk
09:20 to myself or anyone at ECCI and we'll very quickly get them signed up to the next available
09:27 cohort slot.
09:28 That sounds great. And what becomes great, Climate Explain Board, especially relevant
09:32 to SMEs, how is it being tailored towards the challenges they're facing in particular?
09:38 I think one of the brilliant things about it, like Judith was saying, is it's already
09:45 got several cohorts which are really diverse. But what the team does across ECCI and Royal
09:53 Bank of Scotland is really understand what their business needs and the limitations,
10:02 just like Judith said, in terms of time and what they can put into it. And I think that
10:06 kind of early win with all of them in terms of how do you assess where your energy is
10:15 being used at the moment and how you can cut it. And so the diversity of business is amazing.
10:20 I love it. But they've all got that commonality of they are operating in a world where there's
10:26 increased regulation, increased expectation, supply chain, Judith mentioned, in terms of
10:31 procurement, to know where your emissions are and to say what you're doing on climate.
10:36 But also, yes, this energy crisis in terms of the cost of living, cost of energy. So
10:41 they've all got that commonality of pressure on the bottom line, actually, from energy
10:46 costs. So it's that commonality of help that can be given. But also there's that, that's
10:53 the lovely thing when I met one of the cohorts and they're from diverse kind of sectors,
10:59 like I mentioned. But them learning together is such a wonderful thing to see because they're
11:06 sharing good practice and what they're doing with each other as part of this process. And
11:11 that means you kind of, you get that, that feeling that it's not just you being kind
11:17 of out on the extreme doing green stuff. Actually, this is something which lots of businesses
11:23 across different sectors are doing and actually getting a lot out of it, not just in terms
11:29 of direct monetary savings, in terms of energy costs, but that building capacity, like Judith
11:35 says, you know, having someone who's gone through this process that carries forward
11:39 in terms of that capacity in your business for years, decades to come in terms of their
11:43 understanding of where they can cut emissions, but also the regulation, the kind of context
11:49 to this, because climate change, as we know, is intensifying every year. And with that
11:54 comes more regulation, energy costs aren't going to go down anytime soon, either, unfortunately.
12:00 So all of these things which brought people onto the programme in the first place are
12:04 only getting more and more powerful. So I would just love to see loads of businesses
12:10 do this. In fact, every, I'd like every business in Scotland to go through this process, because
12:15 it's so important on a national level for us to meet our net zero targets, but actually
12:21 also in terms of our prosperity and our competitiveness in terms of the private sector.
12:26 You're listening to the Sustainable Scotland podcast. This episode brought to you in partnership
12:30 with the Royal Bank of Scotland. If you'd like to discuss partnering with the Scotsman
12:34 for an episode of Sustainable Scotland, please email podcasts@scotsman.com. And now back
12:40 to this episode of Judith Crookshank for the Royal Bank of Scotland. I'm Professor Rae
12:44 of the Edinburgh Climate Change Institute. What do you hope the main takeaways are for
12:48 businesses who complete the climate springboard? What would you like them to leave thinking
12:51 and passing on to their businesses?
12:52 I think the main thing for me is that they can take an action that makes a difference.
12:56 So, you know, often we have conversations with businesses who'll say, well, you know,
13:01 really for my business, I'm waiting for this big technology solution, and it's still being
13:04 developed. And anything else I can do is not really going to move the dial. But actually,
13:11 when they go through the programme, and they start taking those small actions, they often
13:14 add up to actually be quite significant. And they can be taken today. And therefore, you
13:20 know, as Dave said, really start us on the journey today and that transition. So I think
13:25 for me, and then, you know, the other piece, because it's in a cohort basis, that they're
13:29 all in the same boat, and you know, that other people are going through the journey with
13:33 them. And, and at the same stage as them, often, I think we talk to businesses who assume
13:39 that, you know, people are ahead of them and have already taken all the actions. But actually,
13:44 there's a lot of people who are just, you know, starting to work their way through this
13:47 now.
13:48 Clement Springboard is still a relatively new initiative. Could you tell me a bit more
13:53 about his work to date? For example, how many SMEs it's supported so far?
13:57 So I mean, as far as I know, it's over 50 now, across a whole load of different sectors,
14:04 like I mentioned, and the feedback has been great. And you know, the approval ratings
14:09 and all that stuff. But what I love is seeing the actual individual stories from them. So
14:14 there was one company that I met, actually, they came into ECCI as part of a kind of group
14:20 meeting. And they were talking about the kind of the energy use assessment and the carbon
14:27 footprinting. And one of the key things was them just not knowing where their energy was
14:32 being used. So a lot, a lot of us now have half hourly meters, we have smart meters,
14:37 a lot of businesses have them. But quite a lot of businesses don't have those data or
14:41 don't even know how to look at them. And so what Clement Springboard was able to do was
14:46 to help them analyze those data. And they noticed that even though they were there are
14:51 kind of manufacturing, so engineering company, that all the workforces there during the day,
14:56 and they're doing their work in the day that their energy use was almost as high in the
15:00 night when no one was there. And they actually monitored the data over a couple of weeks
15:03 and found one of their machines was using this huge amount of power because it was just
15:09 on standby overnight. So they were able to identify that, turn it off, and cut energy
15:14 and costs just by knowing the data and understanding, like I say, that kind of energy footprint
15:20 and usage.
15:21 It's going to help businesses make real changes fairly quickly from what you're saying. And
15:24 Juna, you said you'd like to add there in terms of achievements of Clement Springboard
15:28 and how businesses have benefited who have gone through the program?
15:31 Yeah, so again, you know, I think there's a lot of great examples where people have
15:36 saved money by reducing their energy usage. We've also seen customers then go beyond that.
15:42 So we had one customer who have a fleet of drivers, and they actually spent a lot of
15:47 time looking at could they save fuel if their drivers drove differently? And so they actually
15:53 trained the drivers to drive much more efficiently. And what would that look like? Things that
15:57 just people just wouldn't consider or weren't thinking about. And they've reduced their
16:01 fuel usage by up to 10%.
16:04 The other thing that I really like seeing is when we're able to connect customers to
16:08 other customers. So we have a lot of SMEs will be part of the solution for the transition
16:15 to net zero. So it's not just about them reducing their own emissions, but actually they're
16:20 going to be the businesses that are doing the retrofits. They're going to be the businesses
16:24 that are developing the solutions in energy monitoring, et cetera, et cetera. And actually,
16:30 we found lots of great examples where we can connect customers on the one side to customers
16:35 who have solutions on the other side. And that's been really great to see.
16:38 Okay, that sounds great. In terms of sectors, you mentioned it's for all sectors. So have
16:43 you had quite diverse companies taking part from manufacturing to retail? You mentioned
16:47 hospitality earlier has attracted people from across the board.
16:52 It certainly has in my experience. And some sectors which I hadn't even thought of like
16:58 funeral directors, right? So it's unfortunately a service we all have to use, but they actually
17:04 have a high energy usage. And so, yeah, having them in the same room as, like I say, a kind
17:10 of engineering company, which you would think, well, they've got nothing in common, but absolutely
17:16 they had in terms of understanding their energy use and they all got significant costs associated
17:21 with energy use and were able to kind of, yeah, have that commonality of the approach
17:28 in terms of identifying where they could make efficiency savings. So, yeah, it's one of
17:33 those things where you kind of, you think on climate action, you know, the businesses
17:41 or the sectors that would be taking action or that you would meet through this, but actually,
17:46 you know, climate change, climate action, energy costs, they are economy wide. And so
17:52 that, you know, this programme is relevant economy wide in the same way.
17:58 One of the sectors we've been thinking about slightly differently is agriculture. So in
18:04 the initial phases, we've not really been opening up to agriculture customers. We have
18:08 a couple of other partnerships we've been exploring now because it is the nature of
18:12 those businesses is slightly different and can be slightly more complex, but we have
18:17 been getting together our other partners with the team at ECCI to start to explore what
18:22 would a cohort look like in that space and what can we do in that space? Because it's
18:26 a hugely important space in terms of that transition journey. But that is one area where
18:33 we do see, you know, kind of differences in what they have to think about and the actions
18:37 that they need to take.
18:38 Okay. Is that especially true in Scotland, given we have such a large rural sector, do
18:42 you think it's especially relevant here?
18:44 Oh, hugely. You know, we look, I report alongside my commercial budgets every quarter. I submit
18:51 my emissions budgets, my finance submissions. And we've got a commitment as a bank to have
18:55 those emissions by 2030. And my largest amount of emissions is from the agricultural sector.
19:03 So it's really important that we find a good solution through that, because it's hugely
19:07 important also in terms of making sure we've got, you know, secure food supplies and healthy
19:11 food supplies. So it's not about saying, well, let's not have that or let's not, you know,
19:16 it's a hugely important sector for us to support. And they've got a huge role to play in that
19:22 transition journey. So we've got partnerships with WWF, which, you know, we've been holding
19:29 a number of roundtables with their Scotland team to really try and understand, you know,
19:34 what is, what's needed to help the agricultural sector move towards sustainable practices.
19:40 It's a huge sector for us in Scotland. It's one of those sectors where I think most farmers
19:47 at the moment are worried about the future just in terms of new support regime, which
19:54 is coming in. So we've got a new agriculture culture transformation bill going through
19:58 Parliament here. Farmers are going to be supported in a different way. And the market also is
20:04 changing so rapidly. And so, for me, it's so dear to my heart, the sector is what I
20:10 work in mainly in terms of my research. And it's one of those areas where we talk about
20:17 a just transition to net zero a lot in Scotland, because we kind of lead on that, in my view,
20:25 but it's talked about globally. And that's often associated with the oil and gas sector
20:29 and kind of high intensity industry. But actually, the agri sector for me is one where we've
20:36 got to get it right in terms of the transition to net zero has to be just, these are the
20:40 people that put food on our tables, they are that important. And yet the world is changing
20:47 rapidly for them, not least the climate change impacts that farms are dealing with day in
20:52 and day out. So it's so good that the bank is taking kind of things forward for that
20:58 sector in particular.
20:59 I'd like to ask both of you just if you sum up in one sentence, just why you think it's
21:04 vital that businesses tackle climate change now? And perhaps Professor Ray, could you
21:08 answer that first?
21:09 Yeah, it's good for business. I mean, I should say as a climate scientist, well, it's good
21:13 for the climate and it is, but it's just good for business. You know, it gives you that
21:18 ability to cut overheads, but it makes you more resilient to things like price shocks
21:25 from energy costs, but also regulation. You know, so it means you've got that kind of
21:31 that ability and that capacity in house to cope with the rapid changes that are coming
21:36 through climate action. So good for business, good for the climate.
21:40 Thanks, Professor. And Judith, what would you say to that question?
21:43 Yeah, no, I would completely echo that. I think it's absolutely good for business. But
21:47 I mean, more broadly than just the points that Dave has mentioned, if we look at talent
21:53 coming into the workforce now, it's becoming an increasingly important factor of where
21:57 they want to work. And so taking those sustainable choices, moving your business in that direction
22:03 becomes really important to attract and retain talent. And also in terms of competitive advantage
22:07 for customers, because again, customers are making more sustainable choices as well. And
22:12 so it is, you know, for many reasons, good for business and therefore good to do now
22:17 rather than waiting.
22:18 Thanks, Judith. It's great to hear about the work of Climate Springboard and what you have
22:22 coming up. Is there anything I should like to add in terms of what Climate Springboard
22:26 is doing or what the Royal Bank's doing or ECCI in terms of helping SMEs in particular
22:30 tackle climate change?
22:31 I mean, I think the main thing I would say is, you know, to come and talk to us about
22:37 it. So, you know, and we'll help you get the right support that you have. It's something,
22:41 as I said, we feel hugely passionate about at Royal Bank of Scotland. You know, we've
22:46 made commitments both to help finance the transition, but more importantly, to use that
22:50 convening power that we have and the partnerships, you know, the great partnerships like ECCI
22:55 that we have. So, you know, come and talk to us and we'll help you get to the right
22:59 place.
23:00 Thanks, Judith. And Professor Rees, anything you'd like to add to finish off our conversation?
23:05 I completely echo Judith, just in terms of come and talk to us. I mean, the team, the
23:08 climate springboard team and ECCI are fantastic, but they're part of a, obviously a large
23:15 number of people here at the university, a lot of them within ECCI with just huge expertise
23:21 on climate change across all those sectors. So if you want to come and talk about agriculture
23:24 or land use, we've got that expertise. If you want to come and talk about renewable
23:29 energy, energy systems, transport, likewise. So yeah, come and have a chat.
23:35 Thank you both. Thank you so much Judith Cruickshank of Royal Bank of Scotland and Professor Dave
23:40 Ray of the Edinburgh Climate Change Institute. It was great to hear all about the work of
23:44 Climate Springboard and supporting SMEs. And thanks to you very much for listening to this
23:48 episode of the Sustainable Scotland series produced by the Scotsman. This episode was
23:52 delivered in partnership with Royal Bank of Scotland. Please listen out for and enjoy
23:55 more episodes of Sustainable Scotland on all your main podcast platforms. This episode
24:00 was presented by me, Rosemary Gallagher and produced by Andrew Mulligan.
24:03 (upbeat music)