Stephen Timms MP

Sector Sustainability Conference

There has been good progress in the past year; with several more sectors publishing sustainability strategies. My new role as Energy and DTI Green Minister as well as CSR Minister means I have an even closer interest in your work. I wanted just to say a little about two major sustainability documents we have published in the last year:

• The Energy White Paper
  
  
• Framework for Sustainable Consumption and Production.

In February we published our energy white paper 'Our energy future - creating a low carbon economy'. It sets out a new energy policy to deal with three major challenges: climate change; declining indigenous energy supplies; and the need to keep the UK's energy infrastructure in shape. It presents four new goals for energy policy:

• To put the UK on a path to cut carbon dioxide emissions by some 60% by about 2050, with real progress by 2020;
  
  
• To maintain the reliability of energy supplies;
  
  
• To promote competitive energy markets in the UK and beyond, helping to raise the rate of sustainable economic growth and improve our productivity;
  
  
• And to ensure that every home is adequately and affordably heated.

For the first time, the environment is at the heart of Government's energy policy. Energy efficiency and renewable energy will deliver carbon reductions.

To make it happen we have set up a new Sustainable Energy Policy Network (SEPN) - a network of policy units across government departments, the devolved administrations, regulators and others, jointly responsible for delivering the white paper. Patricia Hewitt launched the SEPN web site on 4 June listing the 135 commitments and contact details for the individuals responsible for delivering each of them. As plans develop we will add more detail to the web site and keep it up to date.
Last month I joined Larry Whitty in launching the UK Framework for Sustainable Consumption and Production, a joint effort by DEFRA and DTI. It is a good document, setting out the progress and the challenges in breaking the link between economic growth on the one hand and environmental degradation on the other.

Our mission at DTI is "prosperity for all". But there is no point in raising prosperity today if it reduces our quality of life tomorrow. So, with our traditional focus on economic growth, productivity and competitiveness, we also need to take action on the environment and social inclusion. Not out of altruism - but out of necessity. There is a compelling economic rationale and business case for moving towards sustainability.

UK businesses need to compete today on the basis of innovative products and high value-added services. That means changing what we produce and how we produce it. Worldwide, environmental markets are valued at more than $500 billion. Demand for clean technologies and process is growing at more than 10 per cent per annum. It is estimated that inefficient use of resources costs UK manufacturing industry £3 billion each year. These are significant opportunities. And Government has a role to play in ensuring that we seize them.

Markets generally provide the best means for allocating resources. But environmental resources often do not have a market. So the Framework addresses taking action to shape and create the markets we need to get the outcomes we want.

We need to make greater use of market-based policy tools like pollution trading where they can be effective. We need to devise the right mix of incentives to stimulate innovation and investment in cleaner technologies.

As well as those two key documents, other important work is in hand. Getting the framework right for environmental innovation will be crucial. We will shortly publish our DTI Innovation Review. Doing more on environmental innovation and resource productivity will be a priority. This is not just about cleaner and leaner technology - although that will be important. It is about stimulating innovation in its broadest sense: social and institutional innovation, as well as technological.

We have a wealth of case studies showing good environmental performance is good business. We also need to translate that individual company experience into a critical mass of business action. The sectoral strategies provide a good framework for identifying these best practice examples and encouraging their wider application.

We also want to take an important new initiative on working with businesses in selected sectors and product chains to identify key barriers and enablers to sustainable consumption and production. We will be piloting this approach in the glass sector - working in partnership with British Glass - before trying it in other sectors. I understand this is on your agenda this afternoon.

Many of the specific actions in the Framework are focussed on the supply side. Producing more with less. But we also need people to consume more sustainably produced goods and services. That is not easy and we cannot pretend to have all the answers. But with DEFRA we will be enlisting the help of the Sustainable Development Commission and the National Consumers Council to lead further work to try to identify practical action that can help engage consumer action.

Consumers are often "locked" in unsustainable behaviour. Unable to make a difference without far-reaching lifestyle changes - which most find unacceptable. Yet today we have an unprecedented opportunity to crack this dilemma. Innovation, ingenuity and creativity are at the heart of the modern economy. New sources of economic wealth, new business models and different ways of consuming mean that successfully decoupling growth from environmental degradation is within our grasp as never before.

Effective management of environmental and social risks - alongside traditional financial and economic ones - is becoming fundamental to business success. We need to reach out to more businesses with that message, and the sectoral strategies, developed with enlightened trade associations, are a key tool for doing so.

There is a vital role for associations, in safeguarding and enhancing the reputation of the business sector; and in activities to promote sector competitiveness as well.
The trade associations that are effective will be those that are addressing environmental and social issues in a strategic, forward looking way. Those associations will have credibility and will be listened to. And they will be better placed to make a difference for their membership.

The question I have to ask myself all the time is what role Government has to play in encouraging business to behave in a sustainable way. We should encourage greater sector engagement, facilitate more effective sectoral action and identify and share best practice and promote success. We should also facilitate innovation and creativity as key to a competitive organisation and also the cornerstone of a sustainable economy.

In my role as the Minister for CSR I have to work out how Government can help to promote more widespread adoption of some of the great ideas that companies and sectors are developing, including what we might do to promote the wider development of the skills needed for successful CSR. So, last December, I asked Sue Slipman to lead a Working Group looking at those issues. The Working Group Report, "Changing Manager Mindsets" was in my view an extremely helpful contribution to our thinking and we have been consulting on the proposals she made including the recommendation that we set up a new CSR Academy.

I have set up a steering group to advise us over the next few months on how we should translate the recommendations to make a lasting and significant contribution to the widespread practice of CSR, what Sue described in the report as the "leap forward", and do it in a way which helps promote the mainstreaming of CSR in company managements and boards. I am delighted that Clive Mather of Shell UK has agreed to chair the Steering Group. It is representative of the range of interests and draws on all the support potentially available to us to ensure that we can make a success of setting up an Academy, with a view to it being in place by the spring or early summer of next year.

Our partnership with the PERFORM project, whose online service is being launched in a few minutes, is another example of what Government can do to facilitate sustainable businesses.

Businesses need to know how their performance compares with best practice on sustainability. The PERFORM project aims to address sustainability performance benchmarking through providing easy access to benchmarking reports for a sector. It also aims to develop management tools to help companies use the information about their sustainability performance in management and decision-making and so help companies move beyond reporting and towards sustained environmental and social performance management.

So my thanks to all of you for your work on sectoral strategies. And let's work together, during today and in the months ahead, for progress on these goals and for success in the ambitions for sustainability that all of us share, and which are so vital for the well being of everybody.

Thank you.