Clarasys are a part of Race to Net Zero, a collaborative group including many industry leaders and experts who are passionate about driving sustainable change in hospitality.
As part of this, we took on a research project to understand what needs to change in order to enable greater pace around decarbonisation in the sector and produced a report of our findings.
In this webinar, we hear from Hamish Stoddart, founder of Peach Pubs and Race to Net Zero, and Clarasys consultant Rutger Veltman, as they break down the top 10 barriers and innovative solutions to achieving Net Zero within the hospitality industry as revealed in the report.
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Watch the webinar below or read on for an edited transcript.
Please note, the Q+A section has been taken out of the video for the purpose of sharing this webinar. Please reach out to sustainability@clarasys.com with any questions you may have.
Hamish Stoddart: I’m going to talk through why I set out to create the Race to Net Zero, which is a voluntary collaboration between a great many people.
Hamish Stoddart: Rutger is going to talk about the report methodology so you can use it and understand it and share it with your colleagues and peers and friends. And the results of the report, which are the top 10 barriers and solutions. Rutger and I are then going to talk about the next steps and then we should have about when we’re going to do that in a, in a straight stream of 20, 30 minutes so that we can use it as a short webinar for people to share. And then we’re going to have about 20 minutes of Q and A to talk about the report amongst ourselves.
Hamish Stoddart: We’ve got 24 on the call. Thank you for all coming. Really, really appreciate it. I will get going with my intro.
Hamish Stoddart: So about 21 years ago, I don’t think anyone could call me a sustainability-focused guy, and I formed Peach Pubs, but I did resolve to do everything as good as I could. And a lot of my peers, in Peach were sustainability and ethics-orientated. Personally, I was into ethical business, and a year ago when we sold, Peach was I think one of the best at doing sustainability because we were doing it absolutely everywhere. We weren’t necessarily the deepest in every solution. There are people doing power savings much better than Peach did, but we were doing it in almost every area. Everything we touched was as sustainable as we knew how to do.
Hamish Stoddart: Our challenge was, as an SME, is we didn’t know the best solutions. So every step we made, we had to do research and make it up.
Hamish Stoddart: And as cop 26 came up in November 21, I got determined to find out more for SME gastro pubs, and introducing them to some fantastic suppliers and other pub groups like Punch and Greene King who are willing to share what they knew. And we set off on an 18 month two-year collaboration where we were all sharing stuff and those of you who’ve been to some of our meetings or come to the last one will understand we came a long way in encouraging people to collaborate and that’s really what it was all about. It was a voluntary collaboration sponsored by some brilliant sponsors. You’ll see them on, on, on our website, and facilitated by some brilliant individuals including, Sam McGuire at Clarasys, Simon Heppner of Net Zero Now. All of those people are on the website, and if I’ve missed someone, please, please tell me, I’ll put you on the website, but for now, what I’d like to focus on is, we all know, I think, probably in this room, I can’t see you all, but I imagine you’re all sustainability enthusiasts, and we have got to get the message out. And, uh, as you can see from the weather in the last… two months round Europe in Britain, it’s moving fast and we the enthusiasts need to share wider as fast as possible and collaboration, genuine, genuine collaboration and sharing of ideas is going to be one of the fastest ways to get this out. And it’s remarkable, I think, that Hospitality shares so well, enjoys being together so well, and we can use that, that advantage to make sure that this report goes out and others like the webinar that just went on in the MA a moment ago, really, really moved us all faster. So I’m going to hand it over to Rutger Veltman, man of the field, to explain the findings of the report.
Rutger Veltman: Yeah. Thank you, Hamish. So I’m just going to talk through the methodology starting there because it’s just important for everyone to get an understanding of why we’ve chosen the approach that we’ve chosen. So we wanted to adopt a mixed methods research approach, looking both at interviews and at the survey to get as much data as possible to really add to the level of understanding currently in the sector. So, in order to do that, we’ve spoken with pubs, restaurants, buyers, consultancies, non-profits, and industry, buddies, in total, 29 interviews, mainly with sustainability leads, but also with commercial directors and other people involved directly with hospitality businesses.
Rutger Veltman: We’ve also utilised a network of SMEs, subject matter experts, brought together by Hamish, who gave us inputs on the research questions. So we’ve used a list of questions for everyone. And deviated from it a little bit to tailor to the specific people we’ve spoken with. The interviews are a great way to gain a lot of qualitative data and a lot of insights, most of which can be found in the large report, which is shared on the, on after the cloud’s, website as well as the Clarasys website. For any of you who don’t have access to the reports, we’re happy to share them again with you afterwards. And some of them have also been included in the summary reports, which is for those of you who don’t want to read a 60-page report, which I totally understand. So I’m leaving it here for the methodology and moving on to the next section. As Hamish said, what we’re doing, we’re just going through all the slides now. And then there’s room for Q&A after if you’d like to answer any questions.
Rutger Veltman: So the top 10 challenges that we have identified, can be seen here on the slide. So first of all, it’s a lack of clarity on the value of investing in Net Zero. I’ll speak to this one a little bit later as well in more detail, so I’ll leave this one for later. There’s a lack of available capital to invest in Net Zero. So this challenge really has to do with the cost of capital, the cash flow constraints for particularly small operators, but also the unavailability of funds and, green funds and, for example, zero-interest loans or other measures to finance, the larger capital investments that are needed to transition to Net Zero.
Rutger Veltman: Then we have identified the lack of leadership buying to prioritize Net Zero. So it’s good to caveat here that, of course, many businesses are prioritising Net Zero, including the leadership of those businesses. But there’s definitely more to be gained there and more leadership buy-in needed to really get on with the larger capital investments and the larger transitions that are necessary and require a big commitment from the board and from investors.
Rutger Veltman: And then there’s a lack of capacity to work on Net Zero that really has to do with time. Everyone knows, of course, that hospitality is a business where people are very, very busy, in all different roles. So having that additional task to work on Net Zero, whether it be on the floor, of a business or more in management is a big ask.
Rutger Veltman: Then we have a lack of available and scalable low carbon food and equipment, so, of course, food referring to anything from, you know, what you get on your menu, such as steak to other menu items. But equipment is another very important area, for example, with kitchen equipment where a lot of gains can be made.
Rutger Veltman: Then we have a lack of customer engagement, and demands around Net Zero. That has to do with customers continuing to prioritise price and quality over sustainability. There are big wins to be made to make sure that customers basically demand more low-carbon options or vegetarian options, and demand more action from businesses around Net Zero in general.
Rutger Veltman: Then we have a lack of reliable data to drive decision-making. So this is a big one that underpins a lot of the other challenges where unfortunately, in the larger food and beverage industry, it’s still really challenging to get the level of understanding and data to really see the impact that you have as an organisation when you’re reducing your footprint. So a lot of good work has been happening, for example, by Net Zero Now, who kindly sponsored and participated in this research. But also Zero Carbon Forum, and there are others such as WRAP and other organisations who’ve played a big role in making sure that there’s more data available. But a lot more can be done in this area.
Rutger Veltman: A lack of government regulation and policy, well, this is just clear across all sectors and the same goes for hospitality. We really need a level playing field and clear direction from government.
Rutger Veltman: Intensity targets, that has to do with, of course, businesses want to grow and it’s important to have reduction targets that accommodate a growth model for businesses where they can grow sustainably and still have positive Net Zero strategies that do not just account for businesses that would basically reduce their business in size, but that they can grow in a way that’s still sustainable and that they have targets that accompany that strategy.
Rutger Veltman: And finally, there’s a lack of influence on the supply chain, which is a big one that also cuts across many different challenges is just that many small operators, in particular, feel they can’t influence big suppliers. And even big operators are very small still in size compared to, for example, the retailers. So the influence that they can have on the larger food and beverage supply chain is limited.
Rutger Veltman: So I’m now moving on to some of the specific challenges that we’ve looked at at the Race Net Zero event.
Rutger Veltman: So a big one, as mentioned on the previous slide is a lack of clarity on the business case. So this really comes down to understanding the value proposition for investing in Net Zero, which includes the smaller behavioural investments, but also the larger capital investments, really understanding what benefits it will bring, both in terms of carbon reductions, but also in terms of the return on investments. So ultimately the money it brings in for the business and how long it takes for the business to earn back their investments. And there’s a lack of focus on the long term. As you probably know, many of the next year and sustainability issues are long-term issues still, even though it’s very imminent. It requires long-term investment. So shifting the focus more on the long term in board meetings and company strategies, it will allow to basically capture the value that we don’t necessarily see in the short term with these investments.
Rutger Veltman: A complexity of metrics just refers to the difficulty of measuring the business case.
Rutger Veltman: And finally, we have uncertainty about the future, which is a general big factor in this.
Rutger Veltman: So we’ve looked at a couple of solution areas in the report, which can be found at the bottom of the slide. But here I just wanted to highlight the group solution that we’ve come up with collaboratively at the Race to Net Zero event, which is around building a business case tool and repository, that is easy to use by SMEs in particular, but also larger hospitality businesses across the country. And that allows them to quickly access information about business cases, for specific investments that they might want to make. And this has to be tailored to their size and to the type of business that they have and the specific constraints that they operate in. And the idea of the group of hospitality people, operators, suppliers that came up with this idea, was to include specific examples, of the ROI, of the investments that need to be made. And finally, to make sure that this is publicly available. So free of charge and shared widely with SMEs across the country. So in order to operationalise this, a lot needs to be done, of course, and towards the end of this webinar we’ll highlight basically what the next steps could be.
Hamish Stoddart: Good. Next one.
Rutger Veltman: Yeah. So the next one, a lack of customer demand and engagement. So as I just highlighted this is around the communication piece. How well can businesses communicate the need for Net Zero to their customers? But it’s also around the demand from customers themselves. Again solution areas that we’ve identified can be seen at the bottom.
The group solution that we’ve come forward with after an intense debate and prioritisation exercise was an industry-wide campaign which is supported by as many people as possible really to raise awareness among customers and among businesses, around Net Zero and sustainability in general. So this would include operators, but also their supply chains crucially. And the campaign can develop and use shared branding to promote messages around Net Zero and definitely rely on some of the information that’s been out there already.
Rutger Veltman: Moving on to the next. So the third big barrier that we’ve discussed at the event is a lack of government policy and regulation around Net Zero. So some of the key areas that were identified through the research includes electric vehicles, of course, really important for in particular, suppliers that use a big transfer network, they would dramatically reduce their footprint by switching to electric vehicles, more regulation, positive stimuli, but also potentially, regulation to level of the playing field would help in this area.
Rutger Veltman: The second one, which is really big for all operators is electrification retrofit to reduce their scope one and two emissions.
Rutger Veltman: Agricultural reform. Referring to the whole food supply chain that sits underneath, that sits within hospitality.
Rutger Veltman: Packaging is a big area and extended producer responsibility where we’ve seen the EU taking action, but the UK is sort of lagging behind.
Rutger Veltman: So the group solution that we’ve seen here is around collective action. So starting a collective action initiative, and requesting cross-party agreements to commit to implementing the recommendations of the Dimbleby report. The government commission has not yet been followed. So this came out of that discussion.
Rutger Veltman: So finally, what we see here is the survey results that many of you have responded to, which is great.
Rutger Veltman: So, what we see here is the priority that people give to Net Zero within the sector. So most people give it either a high or medium priority. And the median priority is interesting because it’s basically what underpins much of the need for addressing the barriers because it needs to be balanced against other priorities such as maintaining healthy cash flow and other challenges.
Rutger Veltman: In terms of moving forward, we see that more collaboration in the industry is favoured by most respondees, followed by government action.
Hamish Stoddart: I think this was a really interesting result from both the report and the surveys we all did is collaboration came back as one of the ways in which we could help move Net Zero go faster. And I hope that we’ll find ways in the future of collaborating more, moving faster. What’s the next slide?
Hamish Stoddart: So drawing the race to Net Zero initial phase to conclusion is, we said we’d put people together to get involved in the three solutions that the participants of the meeting wanted to talk about and hopefully, some of you guys might want to join them.
Hamish Stoddart: And I think both Rutger at Clarasys or me will point you in the right direction. It’s not intended that I personally lead any of these collaborations or Clarasys put resources into it. I think it’s now about people finding exactly the right solutions that that people want to do, so hopefully out of this session and out of the previous session, we’ll have found some people who are actively going to push forward to promote the report, which is an all-inclusive report covering all these areas where we’ve found that challenges really exist. And hopefully, you’ll share that with your colleagues both on the senior exec or whatever, or in the supply chain or in operations, and explain to them individual little bits.
Hamish Stoddart: It’s a really good report. It is 60 pages, so you can’t consume it all at once, but it’s a fantastic resource for you to, use to share with folk when you’re challenged with communicating about why Net Zero isn’t moving as fast as maybe you would like, or I would like, and then, hopefully, we’ll agree how we want to collaborate as a result of this session and the previous session and we’ll make something happen from that.
Rutger Veltman: Thank you very much.
Rutger Veltman: Thanks all.
Download our report “Top 10 Barriers and Solutions to Net Zero within the Hospitality Industry” to discover more in-depth research findings and analysis. To find out more about our sustainability consulting offering, please get in touch or email sustainability@clarasys.com.