First up in this week’s green business roundup, new detailed analysis shows interesting market opportunities for the Scottish hemp sector. Hemp can be used in building materials, as a biofuel, textile fabric and even as an alternative to plastic.
The analysis, involving the University of Aberdeen’s Rowett Institute and Scotland’s Rural College (SRUC), partnering with the Scottish Agricultural Organisation Society (SAOS) and the Scottish Hemp Association (SHA), looked at the supply chain for hemp seed and fibre.
At present things look murky; the supply chain for Scottish-grown hemp is underdeveloped with no well-established market routes. It is also exposed to threats including low profitability, lack of technical support, weather limitations, lack of financial assistance, and stringent legislation.
Report author Dr Wisdom Dogbe of the Rowett Institute said: “The information gathered was used to carry out a full assessment of the challenges and opportunities faced by the hemp sector.
“We know that world production of industrial hemp has been on the decline since the 1960s due to an unfavourable political climate regarding the cultivation and use of the crop as well as legislation. However, the hemp plant has the potential to be a cost-effective, carbon neutral, and environmentally friendly crop for farmers.”
Dr Cesar Revoredo-Giha of SRUC added: “Our research has provided strong advice on necessary steps to take to progress the Scottish hemp sector. These include, in the short term, strategies that can be adopted by stakeholders such as using hemp as a carbon credits crop as well as the provision of educational and technical support to hemp growers.”
There is big scope for hemp to do better. The report argues that in the food and drinks sector, more than 4,076 hemp-based products have been launched worldwide.
In order to scale more, there is a need for regular extension services to educate on the agronomic requirements of the crop. Second, a review of the licensing system may enable new or existing farmers to better benefit from the environmental advantages it offers.
Third, restrictions on where hemp can be grown, threshold of THC, and destruction of the hemp flowers/leaves could be reconsidered by learning from countries like the USA, Canada and France. The global industrial hemp market was valued by Polaris Research at $4.26 billion in 2021 and is expected to grow at a CAGR of 16.9 per cent to 2030.
If Scotland is to secure its chunk of this growth, some fast action to scale opportunities is needed; self-evidently most welcome to tackle Scotland’s economic challenges.
ABB, which works across electrification, robotics, automation and motion, has announced carbon neutral operations at its factory in Porvoo, Finland, reducing CO2 emissions by 636 tonnes in its first year. By combining digital solutions, electrification, and renewable technologies the Porvoo factory has taken an important step towards a more sustainable value chain.
Some of the claims are impressive. The 6,600 square metre site producing wiring accessories and installation materials for the smart buildings market in the Nordics now utilises 100 per cent renewable energy. By using recycled plastic as a raw material the carbon footprint has been reduced by a further 106 tonnes a year. On-site electric vehicle (EV) charging for employees and visitors is also achieved with renewable energy.
The Porvoo site recycles energy from its factory production, featuring both a geothermal system and solar technology to utilise heat from air compressors and heat recovery from the cooling networks serving the plastic machinery. Retrofitting the facility at Porvoo enabled it to decrease its total energy consumption by 21 per cent using heat recuperation from production, seasonal thermal energy storage, a heat pump and free-standing solar photovoltaic technologies.
The moves are intriguing when compared with ABB’s overall green business objectives. It has promised to achieve carbon neutrality in its complete owned operations by 2030. In the past year, ABB as a whole reduced its CO2 emissions by 39 per cent, compared with the baseline year of 2019.
ABB has committed to electrifying its entire vehicle fleet of more than 10,000 vehicles and sourcing 100 per cent renewable electricity by 2030. In 2021, 44 per cent of ABB’s global new vehicle orders were already for either electric vehicles or plug-in hybrid vehicles.
What’s interesting about ABB’s approach is a willingness to use a variety of tech and solutions and a holistic approach. Generally, immediate wins on cutting corporate carbon are fast, but progress slows as the low hanging fruit are picked. ABB illustrates how firms can maintain and deliver strong long-term approaches by widening the scope of their carbon efforts, and embracing different tech across estates and operations.
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UK Investment Push vs US
Sustainable investment manager Downing LLP has created a new, bespoke investment vehicle for the UK charity, the Human Capability Foundation (HCF), to invest into renewable energy.
Over the past 12 years, Downing’s Energy and Infrastructure team has completed more than 175 renewable energy transactions and currently manages a portfolio valued at £785 million. The team will acquire and manage a renewable energy portfolio for HCF.
The investment vehicle can also provide a regular and inflation-linked return that can be used to support HCF’s ongoing charitable purposes.
A Certified B Corp, Downing has worked closely with HCF to tailor the mandate of this new investment vehicle, which will also have an inherent, positive environmental, social and governance (ESG) impact.
The assets are expected to include operational core renewables in the UK, which have longstanding track records and, in certain cases, receive government-backed and inflation-linked subsidies.
Downing plans to launch similar investment vehicles for additional charities, foundations and endowments, that can invest on their own or alongside other UK registered charities, where trustees are seeking to allocate a proportion of their charity’s funds to renewable energy assets that can deliver stable, attractive financial returns.
What’s vital is that globally, ESG has, of late, become politicised. In the US in particular, Republicans are weighing in against ESG, claiming it diminishes free markets, among other largely spurious claims.
Many analysts believe the anti-ESG lobby will falter post mid-term elections, when Republicans no longer seek to leverage an anti-woke agenda at the ballot box. Nonetheless, the situation as it stands illustrates how politics and business remain ultimately enmeshed, and how politicians both lead and push back against environmental and green business trends, often based on partisan agendas.