After this whirlwind of an election, and the return of a Labour government, now is the time to turn to the promises and policies made by Keir Starmer and the Labour Party and see exactly what is in store for ESG in the coming years.
Labour has made some green commitments, promising to differ from the previous Conservative government in their approach to sustainability. But, what exactly are the ESG-specific policies being made by Labour in their manifesto, and what can we expect to see from them?
What will be focused on when returning the UK to the centre of climate leadership, and what will be discarded as they begin to take power?
The Labour Manifesto
The Labour manifesto sets out Keir Starmer’s first steps when getting into power, and specifically includes a focus on setting up clean energy for the UK.
Labour’s plan covers several promises towards environmental and social policies that will impact companies’ ESG practices in the UK.
We’ve narrowed down the crucial details of what Labour’s plan and potential policies mean for the E and the S in ESG, and how that can impact specific industries, such as Housing.
Labour’s Plan for the Environment
The new Labour Government’s main focus for their environmental policies revolves around ‘Making Britain a clean energy superpower’. They plan to do this in a number of ways, including:
- ‘Set up Great British Energy to cut bills for good’
- ‘Energy independence from dictators like Putin’
- ‘650,000 new high-quality jobs’
- ‘Warmer homes to slash fuel poverty’
- ‘Water companies forced to clean up our rivers’
To deliver their clean power mission, Labour has said they will work with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030. They plan to invest in technologies such as carbon capture and storage, hydrogen, and marine energy to secure the necessary long-term energy storage. A proposed Energy Independence Act will lay the groundwork for Labour’s energy and climate strategies.
In regards to funding sustainability ventures, Labour has said steelmaking would take a £2.5bn share; £1.5bn would be allocated to Gigafactories producing electric vehicle batteries; £1.8bn would go to decarbonising ports; £1bn would be set aside for carbon capture and £500m is earmarked for green hydrogen.
Labour has restated its dedication to uphold the UK’s goal of achieving net-zero emissions by 2050. They also plan to accelerate the decarbonisation of the electricity grid, aiming to achieve this by 2030 instead of 2035.
There are no specific targets to scale energy storage in Labour’s manifesto, which simply references a pledge to “ensure we have the long-term energy storage our country needs”. The manifesto additionally states that the Party would “maintain a strategic reserve of gas power stations to guarantee security of supply”.
The Labour Party is not planning to revoke any existing offshore oil and gas licences in the North Sea. However, they are also not planning to issue any new licences.
The core of Labour’s energy transition plans is the creation of Great British Energy, a publicly owned business which would invest in large and small renewable energy projects across the UK. Starmer wants to have this up and running within months. The manifesto states that it would receive £8.3bn within the next Parliament.
In their first week in power, Labour have already begun to make some good on the promises laid out in their manifesto. On Monday 8th, Chancellor of the Exchequer Rachel Reeves announced a series of reforms, including ending an effective ban on onshore wind farms.
She also announced the new £7.3bn National Wealth Fund, designed to attract investment into big infrastructure projects across the UK, including investments into ports, gigafactories, hydrogen and steel projects.
Prime Minister Keir Starmer is set to launch Great British Energy in the coming days, and the Labour government has reaffirmed their commitment to reversing climate policy rollbacks enacted by the previous Conservative government.
However, as well as meeting their own manifesto pledges, the new Labour government will need to deal with the existing backlog of overdue frameworks, strategies and pledges uncompleted by the Conservatives. This means that, despite a positive start, there is still a lot to do in regards to ESG and sustainability for Labour.
Other key green policy pledges in Labour’s manifesto include:
- Reinstating a requirement for private rented properties to meet EPC C or higher, but delaying the requirement from 2028 to 2030
- Moving the ban on new petrol and diesel car and van sales back to 2030
- Promoting the use of rail freight and accelerate rail electrification
- Reforming bus services
- A plan to improve and promote active travel networks
- The creation of a new international ‘Clean Power Alliance’
- No weakening of environmental protections in efforts to fix the housing crisis
- Nine new ‘National River Walks’
- Three new National Forests in England
- Restoring woodlands, forests, wetlands and peat bogs, although this has no specific targets
- Putting failing water companies under special measures
- Giving Ofwat and other regulators stronger powers on sewage pollution
- ‘Automatic and severe fines’ for water pollution
The new Labour government seems to be putting sustainability and the climate crisis back on the agenda, but with some of their environmental promises and policies being vague and lacking specific targets or specified funding, it is going to be crucial for sectors to keep an eye on what changes actually occur.
Labour’s Plans for Housing
Labour’s environmental plan will obviously affect every industry and their practices, but their warm homes plan specifically looks to help issues in the Housing sector.
Labour plans to increase investment by £6.6 billion, which is twice the current government’s planned investment, in order to upgrade five million homes and reduce costs for households.
The Warm Homes Plan is set to provide grants and loans with low interest rates to assist with the funding of insulation and other upgrades like solar panels, batteries, and low-carbon heating systems to reduce energy costs. Additionally, they will collaborate with the private sector, with banks and building societies, to secure additional private funding for expediting home renovations and implementing low carbon heating solutions.
Labour has promised to tackle the Housing crisis head on, with the new chancellor, Rachel Reeves, pledging to build 1.5m homes over the next five years. It is an ambitious target that aims to create the kind of housebuilding we haven’t seen since the 1950s.
Labour’s pledges include the return of compulsory house building targets for local councils, a policy that was abandoned under the previous Conservative government. Labour plans to achieve its Housing goals primarily through planning reform.
Though the new Labour government has indicated that it wants to create more affordable housing, the majority of the new houses they’re planning will be going up for private sale, so there is still uncertainty in Labour’s plans to actually improve the UK’s Housing crisis.
With all of this in mind, Housing associations should be preparing themselves for potential regulatory changes and a renewed focus on the sector. Rachel Reeves has said “Be in no doubt, we are going to get Britain building again, we are going to get Britain’s economy growing again, and there is no time to waste.”
Labour’s Social Plan
There were several commitments the Labour Party made in their manifesto towards the S in ESG, and so it seems the new Labour government should have a focus in ensuring more protections towards workers’ and their rights.
The Labour Party published “Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People”, an update to their previous proposals on employment law, on May 24th 2024. This is an important document to monitor as the new government gets underway.
The aim of the Labour Party in this new plan is to end “one-sided flexibility” when it comes to employers and their employees, and to move away from zero hour contracts.
One important proposal that was first mentioned in Labour’s Green Paper and is now part of the ‘New Deal for Working People’ is the idea to enhance the safeguards for all employees by eliminating the waiting periods for basic rights.
The Labour Party has set out several other proposals in regards to family-friendly rights, including:
- Reviewing parental leave within their first year in power, including shared parental leave.
- Making it against the law to dismiss a pregnant woman’s employment within six months of her returning to work, unless under certain circumstances.
- Aiding more carers in the workplace.
- Introducing bereavement leave for workers.
There are also various proposals set out by Labour regarding fair pay. These include:
- Implementing a genuine Living Wage.
- Establishing a Fair Pay Agreement in the adult social care sector.
- Making changes to trade union legislation.
In this plan, Labour has committed to addressing workplace equality, specifically focusing on equal pay. Labour intends to establish a regulatory and enforcement body for equal pay and prevent employers from using outsourcing as a way to evade paying women equally.
Labour has, in their manifesto, made several commitments to improving social issues and specifically worker’s rights once in power. And now that we’re facing a Labour government, it’s important that organisations prepare for updates to employment law, and that the general public observes how closely Labour sticks to these promises.
In the wake of a new Labour government and even more changes happening to the constantly ever-changing ESG landscape, it’s crucial for organisations now more than ever to have software they can rely on.
With vague policies and an unclear front on the state of ESG reporting, companies need to feel secure in their reporting processes and get ahead of the game.
This is where Convene ESG comes in.
Here at Convene we have developed our own ESG reporting tool: Convene ESG.
Our aim is to alleviate some of the challenges of ESG data gathering, performance tracking, and reporting for ESG factors so organisations can move towards global sustainability and net zero.
Convene ESG can help you report on a range of existing standards including the TCFD, GRI, SRS, amongst others. We’ve worked in collaboration with our clients, including many in the Housing sector such as WHG who have won awards for their approach to ESG, to ensure your reporting process is as seamless as possible.
Convene makes reporting simple, so you can focus on the changing political and ESG landscape. You can learn more about Convene ESG, and how we can help your organisation achieve your ESG goals, here.
