We’re told businesses have become quieter about their good-citizen credentials. Is that true, and why?

Much as they admire social or environmental outcomes, investors value financial returns, PR departments can get carried away, and there’s a limit to consumer indulgence of grandstanding – especially from highly paid executives. Over in the US, firms would rather not offend President Trump.

Read on here… https://www.linkedin.com/pulse/companies-quietly-embrace-good-citizenship-allerton-communications-ia5ce/?trackingId=X3j%2B0AZ%2FIpx2v%2F9JNFz7NQ%3D%3D

The post Companies quietly embrace good citizenship again appeared first on Allerton Communications.

We’re told businesses have become quieter about their good-citizen credentials. Why do they do that?

Much as they admire social or environmental outcomes, investors value financial returns, PR departments can get carried away, and there’s a limit to consumer indulgence of grandstanding – especially from highly paid executives. Over in the US, firms would rather not offend President Trump.

However, while companies may be more reluctant to use acronyms such as ESG – for environmental, social and governance, and CSR – corporate social responsibility, the good ones remain very aware of their wider obligations.

Why? Events can get out of control fast in the digital age with its headline-hungry, non-stop news cycle. That means responsible leaders must identify and manage risks.

Enhancing long-term sustainability means making people aware what a business does and why it matters – you can’t expect people to care about an enterprise if they know nothing about it beyond a label or price tag.

The best businesses grow roots in the communities they serve. I remember as a reporter, the furore over a Midlands gardening products company closing its sports and social club. The short-term cost savings were tiny compared to the lasting reputational harm. The firm was acquired by a German competitor and no longer manufactures in the UK.

Property developers must now by law deliver a ‘biodiversity net gain’ of 10% for new schemes, resulting in more or better quality natural habitat than there was before development. Such regulation is likely to expand into other sectors to counter man-made pressures on nature.

A property professional tells me that while companies across the board are quieter about ESG, they’re closely examining their supply chains for examples of good and bad practice, to inform future decision-making.

The message for business leaders – however you communicate the message, being a good corporate citizen is more important than ever.

#business #CSR #ESG #nature

The post Companies quietly embrace good citizenship appeared first on Allerton Communications.

That said, reliable, affordable power remains crucial and renewables will be key part of the UK energy mix for several reasons. The fact is, we need all kinds of energy. Why?

Energy consumption is rising worldwide, driving up electricity and fossil fuel prices; UK demand, though steady in recent years, is expected to rise, to power AI and digital data storage and serve a growing population.

Read on… https://www.linkedin.com/pulse/mini-reactors-add-much-renewables-vital-peter-curtain-8mgxe/?trackingId=VuPtT8QrILFxZEeXBP8EAg%3D%3D

The post Mini-reactors add much but renewables remain vital appeared first on Allerton Communications.

Investors like biogas as it generates high returns and can burnish their green credentials. It serves the same purpose as fossil-fuel natural gas, but is carbon-neutral (or carbon-negative) because it’s produced from organic matter that was part of the natural carbon cycle, so doesn’t add new carbon to the atmosphere.

High-calorific biogas is produced from solid waste from poultry, cattle, pigs and farmed fish, and even fish morts (corpses), then either pumped into the grid, or used to power electricity-producing turbines.

Conversion is achieved either by anaerobic digestion (AD), where microorganisms are broken down to produce a mix of methane and carbon dioxide used to generate heat, electricity, or transport fuels, or by biomass gasification, where semi-dry food waste is transformed by hot substances into energy-rich synthetic gas (‘syngas’) – used to generate heat and power.

Food waste used for biogas includes not just out-of-date produce from supermarket shelves but also fruit and vegetables, cooking oils and fats and slurry from cheese production – even discarded soft drinks.

Infrastructure investors are piling into the sector to fill a gap left by traditional lenders – banks spurn food waste as feedstock as much of it is produced by mistake, so can’t be viewed as a reliable revenue source. Yet mistakes are inevitable, and aggregating them across the economy or over time brings consistency, combined with high returns – a win-win for specialist investors.

It’s unpredictable so it’s shouldn’t work, but the ‘aggregation effect’ is now built into the system, yielding big returns for investors.

In one case, a large shipment of soft drink bottles was rendered unsellable by a typographical error. Pouring out and rebottling tonnes of fizz was impractical and changing thousands of labels uneconomic, so the pallets were loaded up and went to making gas.

Food manufacturers often overproduce to counter the risk of shortage. In the event of unexpected rain, hamburgers and sausages ordered by supermarkets for a weekend of summer BBQs will be diverted straight to AD plants. This provides revenues from biogas production and saves on transport and storage costs.

Both the UK and EU long relied heavily on natural gas, most of it imported, to heat buildings and generate electricity, until Russia’s 2022 invasion of Ukraine dramatically highlighted the risk of reliance on foreign supply. Now it’s not only investors who are looking to biogas as at least a partial replacement.

In 2023, the EU and UK consumed 295 billion cubic metres (‘bcm’) and 63.5bcm of natural gas respectively, a fall of 15.7% and 10.4% in turn on the previous year, due to factors including demand reduction efforts, efficiency improvements, renewables, and securing gas from alternative sources such as biogas.

Comprising about 60% methane and 40% carbon dioxide, biogas is produced by anaerobic digestion – breaking down organic matter in a digester without oxygen. It can be used for heating, electricity and replacing natural gas in vehicles.

Even bigger environmental benefits come when biogas in purified to produce biomethane by removing carbon dioxide, hydrogen sulphide and water. Similar to natural gas, biomethane is used for heat and power in buildings and industry, and as a renewable transport fuel. The gas is produced from methane that would otherwise escape landfills, and burning biomethane converts it to CO2 – a far less potent greenhouse gas.

For the UK and the West, replacing natural gas with biomethane in the gas network would speed grid decarbonisation, stabilise and soon lower cost, and boost energy security and independence.

If you’re involved in any aspect of the biogas or wider renewable energy value chain, you’re welcome to get in touch for a chat. We love energy.

*Allerton Communications: Great ideas. Stand-out stories. Better outcomes.

#biogas #renewableenergy #circulareconomy #business #landfill #energysecurity

The post Investors fill biogas gap left by banks appeared first on Allerton Communications.

The post Village life takes on new meaning appeared first on Allerton Communications.

While opinions on the pace of this transformation differ, there is a general consensus on the necessity to decarbonise energy supply through renewable resources, increased electrification, and, despite the technical breakthroughs still needed, enhanced energy storage solutions. At the same time, energy demand is expected to surge, particularly to support the growing number of data centres essential for AI operations and the vast amounts of electronic information generated daily.

This evolution isn’t without controversy, primarily due to the hefty price tag—estimated at £58billion by National Grid Electricity Distribution—the potential disruptions from connection delays, and environmental concerns like the construction of pylons and habitat disturbance. However, these challenges extend well beyond the UK.

During last month’s Swiss Capital Markets event in London, executives from R&S Group shared insights into how their innovative products are transforming electricity supply across key global markets—fuelled by ‘decarbonisation, decentralisation and modernisation’.

In August 2024, R&S acquired Kyte Powertech, a manufacturer of distribution transformers, for €250million. Established in 1977, Kyte is familiar presence in the industry, frequently participating in UK trade shows. R&S is focusing on key growth sectors including data centres, port electrification and in Germany, renewable energy solutions.

Organised by the The British-Swiss Chamber of Commerce, the event featured talks by officials and member companies of Switzerland’s two stock exchanges, along with bankers, lawyers and the Swiss ambassador.

I anticipate an increase in mergers and acquisitions as investors and operators strive to maximise the opportunities created by the ongoing evolution of electricity supply infrastructure. For example, the UK remains a significant hub for transformer manufacturing, with several facilities located in Leeds alone.

Effective communication is a vital, calculable factor in ensuring the success of M&A transactions, presenting investors and companies with a valuable opportunity to manage expectations, build trust, and deliver a smoother transition for all stakeholders.

Contact us for a no-obligation chat. We love energy.

*Allerton Communications: Great ideas. Stand-out stories. Better outcomes.

The post M&A – a key factor in grid transformation appeared first on Allerton Communications.

The Government faces many challenges, from enhancing European security to advancing AI and manufacturing. A crucial aspect of this is effectively communicating its environmental goals.

Concerned by official figures showing the economy struggling in the wake of the October Budget, ministers have intensified their focus on growth, particularly through technology and AI.

Meanwhile, amid growing dominance of China as the world’s manufacturer and President Trump’s talk of trade tariffs, people are asking, why doesn’t Britain make things anymore? The Cambridge don Tim Minshall has published a book about it.

AI’s data use is set to send demand for power soaring. And manufacturing relies on the ready availability of affordable energy. Yet due to self-imposed strictures, Britain has among the highest energy costs in the west.

A point made by Professor Minshall on Today (2:45min in) is that Britain is a global hotbed of creativity and innovation, and could use the ideas emanating from its campuses and research institutions to rediscover the country’s historic manufacturing mojo.

This applies to particularly to energy. British firms are pioneering low-carbon solutions across the board and the Government should do all in its power to encourage them, by creating the conditions for private investment to thrive.

The overwhelming scientific consensus is clear on the need drastically to reduce greenhouse gas emissions to combat climate change, and lowering emissions must remain a key objective of UK policy. Yet net zero by 2050 looks harder by the day.

Tomiwa Owolade wrote: “The evidence is that voters are fed up with being told what to think in order to qualify as a good person, rather than being offered arguments to consider on their own merits.” The Times columnist was talking about ‘woke causes’, but his words apply equally to net zero.

There is a contradiction in asking people to abandon the development of abundant domestic gas—much more environmentally friendly than oil and coal—while resorting to imports from nations that may not meet the same environmental or human rights standards, often at a higher cost and similar or greater emissions levels.

There’s no point constraining industry to the point where there’s no revenue and taxation to fund the energy transition. And how do we produce plastics and chemicals without oil or gas?

It’s time for ministers to change the narrative, emphasising the prospects of addressing climate change, alongside protecting jobs and manufacturing, and maintaining a vibrant economy.

The post Time to change the narrative on energy appeared first on Allerton Communications.

I braved the Christmas shopping and party crowds to join a group of people looking to make energy supply as reliable and efficient as possible.

PowerEx Live at the Park Plaza Westminster Bridge London gathers professionals from the worlds of combined heat and power (CHP), data centres, and ‘genset’ (generator set) – machines that produce electricity on-site – along with industry and consultancy folk.

The odd-sounding mix makes sense. Efficiency is critical not only to grid supply but also to temporary and emergency power and the growing, and energy-hungry, data centre industry.

Why ‘gensets’? Power interruptions cost money and are potentially lethal to healthcare, data centres and financial services, so backup is vital. Generators also serve construction sites, agriculture and remote functions such as mining.

CHP, or ‘cogeneration’ enables large energy customers in industry, commerce and institutions to capture and use heat that’s a by-product of on-site electricity generation – that would otherwise go into the atmosphere – a ‘win-win’ that saves money and reduces emissions.

Staff at the Preheat Engineering stand at Thursday’s event described how heating gas and liquids before use saves money and cuts pollution in industry and transport. Simon Gristwood, Managing Director said: “Machinery runs better and more cleanly at the right temperature. Look at how cars run smoothly with warm engine, and the smoke ship tunnels emit when the engines start.”

Car fan Simon, who has led the Slough-based UK manufacturer since 2015, is also an authority on the history of alternatives to fossil fuel and their outcomes.

Mark Gibbons, Sales Manager – CHP and Heatpumps at another exhibitor, 2G, explained how the Runcorn-based company’s plants reduce costs long-term and offer protection from rising electricity prices. “Our technology saves up to 40% in primary energy,” he said, adding that CO2 emissions dropped by up to 60% compared to conventional power generation in large power plants.

A fast-growing newcomer to energy markets, biogas is seeing big demand from traditional natural gas users who seek security of supply, protection from price volatility, and to reduce CO2 emissions.

Ben Chalk, Client Engagement Director of Future Biogas, said big-name industrial customers were happy to pay more for biomethane, to decarbonise their operations and for ESG benefits such as accelerating net zero.

Majority-owned by 3i Infrastructure since 2023 and now also with RWE as an investor, Future is building a UK network of anaerobic digestion plants to convert crops to unsubsidised biomethane. Farmers like long-term offtake deals and reviving soil through crop rotation, returning nutrients to the land.

A hot topic in breakout sessions was data centres. These are popping up around the world to store and process burgeoning information produced by our reliance on screens and growing demand by governments, businesses and institutions such as the NHS.

Power consumption by these low-visibility leviathans is growing fast, even before factoring in projected growth in AI, so demands for energy efficiency in the sector will be huge – something delegates no doubt pondered at a floating event after-party on the Thames.

The post Energy pros gather to meet demands of data era appeared first on Allerton Communications.

Amid the hullaballoo about #netzero and its effects on the UK economy, I visited a group of low-carbon innovators to see how they’re making energy more sustainable and efficient for future generations.

Day one of the two-day London Climate Technology Show yesterday drew a good crowd of energy and business people, prospective customers and collaborators and encouragingly, several young folk, keen to explore solutions to big problems.

On show near the entrance was First Light Fusion, which aims to supply safe, cheap, baseload electricity by recreating on earth the generating power of the sun – on a smaller scale!

Fusion is the holy grail as it produces none of the long-lived radioactive waste that’s a problem for fission reactors such as two being built in Britain – Hinkley Point C and Sizewell C. The challenge for fusion is generating more output than input while achieving the high temperatures required to start and maintain a reaction without destroying the containment vessel.

A big technical breakthrough came in December 2022 when the National Ignition Facility in California achieved its first ignition, producing 3.15 megajoules of fusion energy from 2.05 MJ of laser energy.

The advance prompted a rush of start-ups so there are now 44 fusion hopefuls in the West and an unknown number in China, offering different ways to commercialise the concept. Established in 2011, First Light is among the pioneers.

The company’s ‘inertial’ method works by firing a 100g projectile at up to 14,500mph into a vacuum chamber, compressing and heating fuel to create the conditions required for fusion. The Oxford firm is backed by long-standing investors including IP Group.

At their stand at lunchtime on the first day, First Light CFO David Bryon and Mohamed Ben Sasi (above, right), adding investment manager to his role of physicist, said the response at the show was positive, as it had been at other recent events including one aimed at students.

Also welcoming delegates was Olivia Smith, partner at sustainability consultant at CGI. She said the management and technology consultancy was seeing high UK demand for its skills in helping organisations tackle the challenges of the age, such as such as decarbonisation and AI. With few or no large rivals present, CGI made the most of its stand with a giant, illuminated global map.

Also on show was Wielkopolska, a region of Poland known for its industry and tourism, located midway between Warsaw and Berlin. An official said civic administrators were attracted by the UK’s openness and culture of collaboration, adding the region had a strong relationship with Scotland.

Here, Piotr Napierała explained how his company, Virtud, is transforming the energy efficiency of homes and businesses by installing systems that combine solar PV with hydrogen cells. Demand has risen with the growth in multi-rate tariffs, allowing customers to buy and store energy off-peak.

The CEO of niche consultancy The Perfect Process told delegates about applying ‘lean thinking’ to business processes. Working with his team, Neil Trivedi brings to bear a career in industry and manufacturing to boost efficiency, making factories greener and reducing both waste and energy use.

Next door, Hazel Gonda, Chief Innovator and co-founder of Fibe, told how the company aims to revolutionise fashion by making sustainable fibres for textiles from potato waste. Its material uses 99.7% less water, with no additional land needed, and emits 82% less CO2 than cotton. Hazel and her colleagues, who met while studying at Imperial College, raised £1m last year to fund growth.

The post Climate innovators share vision at London show appeared first on Allerton Communications.

Efforts are being made to tempt pension fund managers back to London equities.

That includes a Government push to make pension funds publicly disclose how much they invest in UK businesses compared to those overseas.

This could help raise company valuations, attract IPOs, boost the economy, and help restore London’s reputation as a world financial sector.

It’s nice to think UK money managers would be happy to invest in UK companies, but that’s not their job – which is to enrich the current and deferred members of their retirement schemes.

UK companies have become much less attractive to institutional investors since 1997, when insurance and pension funds held a combined 45.7% of UK quoted shares. By 2022 this had fallen to 4.2%. No doubt there are many reasons, but that’s the lowest on record.

In Australia by contrast, pension funds are said to own about 38% of shares quoted on the local ASX stock exchange, fuelling company growth Down Under and boosting the economy. Clearly the ASX is smaller than the UK market, but so is the country’s pension industry. Might we learn some lessons from it?

A big stock market, comprising companies varied in size and sector, generates commercial power and creates wealth and employment, helping to ensure a healthy and resilient UK economy.

In the UK, the big challenge is the state of the financial markets rather than the structure of the pensions industry, though there are efforts to fight back, not least through increased competition.

Yet it’s interesting to look at Australia’s retirement funding regime – it invests in both local and, increasingly, international markets, and is said to be among the top five in the world.

Here’s how they do it Down Under, from my reading of Bloomberg:

• The Government regime for self-funded retirement was set up to reduce reliance on state pension.
• Employers contribute a portion of salary – from 3% in 1992 to 11% (capped at 12% in 2025).
• Funds invest in capital markets, with annual returns about 8%. Most accounts have pre-selected investments across a range of assets.
• Payouts are based on ‘defined contribution’, not ‘final salary’ – the standard used by UK public employers.
• Superannuation (‘super’) funds dominate, though banks and asset managers run retail funds, and there are company, government and self-managed funds.
• Means-tested government pension remains as safety net for those who don’t save enough.

Result? Australia’s ratio of pension assets to gross domestic product is 124% and is forecast to reach almost 250% by 2060. Pension fund assets are forecast to triple to as much as A$10.5 trillion by 2040, with AustralianSuper among the world top 20.

Policy makers, think tanks and of course the investment industry are mulling the many possible ways to maximise and protect retirement assets while boosting the UK’s economic performance.

Pensions should of course prioritise the financial wellbeing of their members but if they can get behind local companies to boost wealth creation, so much the better.

#pensions #retirement #funding #venturecapital #economicgrowth #equities #fundmanagement #australia

Allerton Communications: Great ideas. Stand-out stories. Better outcomes.

The post Pension poser – how retirement funds can boost UK equities appeared first on Allerton Communications.