Responding to the publication today of Centrica’s (British Gas) Climate Transition Plan with a section dedicated to ‘Just Transition’, Carlota Garcia-Manas, Head of Engagement at Royal London Asset Management (RLAM) said:
“RLAM celebrates Centrica's commitment to support the most vulnerable through the energy transition towards Net Zero emissions.
“In the last year, RLAM and Friends Provident Foundation have engaged with the top seven utility companies asking for formal commitments to be put in place by November 2021 (1) ahead of COP26 (2).
“As a result of our engagement, we are pleased to see a strategy from Centrica inclusive of workers, communities, the supply chain and customers. Their support behind the introduction of an industry-wide ‘social tariff’ highlights a clear commitment to tackling affordability; this is essential at a time where increasing gas prices continue to affect all British customers and over three million households in the UK are considered “fuel poor” (3).
“Although the announcement from the Government (4) of a £5k heat pump grant is certainly a decisive step in the right direction, for companies like Centrica alike in the energy sector, the Government are still continuing to dither on making the hard decision on the future of hydrogen heat and gas boilers, delaying this to 2026 and 2035 respectively.”
Notes to Editors:
(1) RLAM and Friends Provident engaged with the top seven utilities companies (Centrica, E.ON, EDF, National Grid, RWE, SSE and Scottish Power) and asked for formal commitments to be put in place by November 2021. Prompted by RLAM’s and Friends Provident’s engagement, SSE were the first to announce a formal Just Transition strategy in October 2020. RLAM and Friends Provident requested the other leading companies in the sector to also develop strategies that address their expectations ahead of the UNFCCC COP26 meeting in November 2021.
(2) The COP26 summit will bring parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.
(3) A household is said to be in fuel poverty when its members cannot afford to keep adequately warm at a reasonable cost, given their income. Data taken from pg 1 of Gov.UK Fuel Poverty Factsheet 2019 (the latest data available on this).
(4) Included in the Government’s ‘Heat and Buildings Strategy’ announced on 19th October 2021.
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.