Accelerating the Transition to a Low Carbon Economy – Making the Step Change AN ACTION PLAN FOLLOWING THE GREEN GROWTH ROUNDTABLE “The great thing about significant step changes is that, paradoxically, they are quick, cheap and made by smaller entities. Agility is what counts. This levels the playing field between large and small, companies or countries, between incumbents and new entrants. Cross-sector synergies and collaboration matter more than scale, which can of course even be a disadvantage. The enthusiasm, collaboration and general can-do attitude from which we have benefitted in Wales is what matters and I am convinced that Wales is well-placed, ready and willing to seize these opportunities” Hugo Spowers, River Simple

The Green Growth Roundtable was initiated by Ministers for the Economy and Natural Resources and organised through the cross departmental Green Growth task group. It involved a range of external expertise working with representation from business, public sector and community sector to identify ways in which Wales can accelerate transition to a low carbon, high value economy. The Well-being of Future Generations Act clearly sets the framework, with the goals and indicators for national wellbeing. Green growth represents the means by which we can develop the economy to deliver these outcomes as emphasised by both Ministers: “Green growth in Wales is about fostering economic growth, development and social equity while ensuring that our natural assets can continue to provide the resources and environmental services on which our well-being relies... We need to pursue economic growth and development that protects our most vulnerable in society while preventing costly climate change and unsustainable natural resource use.” The greatest opportunities for significant competitive advantage in our mature economic system lie in business models expressly designed to deliver environmental, social and financial return, and the roundtable raised a number of key action areas: - Leadership structures for delivering green growth and low carbon transition - Flagship initiatives, innovation and infrastructure development - Ensuring consistency across Government and the public sector - Developing financial models and targeting investment opportunities - Building global green growth partnerships - Communicating the opportunities, the transformational examples and measuring progress 1. Leadership for delivering green growth and low carbon transition Key actions: - a clear, common narrative on developing the economy through applying the internationally established principles of green growth as a means of delivering the goals of the Wellbeing of Future Generations (Wales) Act - making Government’s commitment to green growth more visible and accessible to business, potential investors and wider stakeholders, setting out clearly the support provided through Government to enable green growth with an updated marketing of the Green Growth Wales prospectus - drawing on the “Rewiring the Economy” model developed by the Cambridge Institute for Sustainability Leadership as a framework for change - building on the cross Ministerial working group to establish a business led leadership team that can work with anchor companies, across industry sectors and engage wider society - enabling local leadership in supporting re-balancing to a more localised, foundational economy - encouraging employee leadership and skills development with Trade Union support - leadership role of the new Future Generations Commissioner and ensuring that the Sustainable Development Charter represents the leadership commitment from organisations in contributing to the national goals 2. Flagship initiatives, innovation and infrastructure development Key actions: - the decarbonisation of energy supply is the core requirement for green growth and must be a priority focus within economic development policy - maximising the supply chain and associated inward investment potential of the major low carbon energy developments - working with our globally important high energy using companies to develop new solutions - enabling resource efficiency across the economy through the business support services, building on the Resource Efficient Wales programme and supporting new business models for a circular economy - evidence highlights the role of City Regions in providing scale and capacity of infrastructure to enable transition – green growth principles must be at the heart of city region development - building on the Low Carbon Research Institute to establish a focal point to connect research and development partnerships between business and the university sector - establish Wales as a green growth innovation hub working with Innovate UK, as well as leading corporate and research funders - exploitation of Superfast Cymru as a transformational investment enabling new business models - identifying key flagship projects within sectors to lead change eg delivering retrofit programmes to scale, implementing the Solcer House model for new build, use of Welsh timber in construction, focusing on low carbon vehicles sector. - focusing on flagship locations – eg Energy Island, Milford Haven, Swansea tidal lagoon as green growth hotspots 3. Ensuring consistency across Government and the public sector Key Actions: - consistency of implementation across all Government and public sector programmes was seen to be an essential requirement to build confidence and trust - how Government invests was seen to be the critical test, with incorporation of green growth principles in accordance with the requirements of the WFG Act in business grant support and procurement practice - the education and skills for a new economy must be reflected in new curriculum and skills investment - ensuring that planning guidance and decision making is consistent in applying the principles - the importance of European Investment Programmes was highlighted as being an important means by which transition can be accelerated. The RDP can be a means of ensuring the rural economy can be a driver for green growth - the roles of anchor companies and sector panels need to clearly contribute to the common agenda. This is not just the agenda of the Energy and Environment Panel 4. Developing financial models and targeting investment opportunities Key Actions: - there was significant focus on the need for financial models that can best support the economic transition - building relationships with Green Investment Bank and other green growth investment vehicles - the development of the Green Growth Wales fund which has been established by Welsh Government to be a catalyst for investment - continue to develop the opportunity to attract investment in ecosystem services - greater targeting of potential inward investment that can align with green growth principles e.g. attracting ethical investment funds to locate as part of growing the financial services sector - ensuring existing investment models through Finance Wales incorporate green growth principles - establishing flexible finance models for the social enterprise sector that can enable community owned energy and local economic development - introduce a Loan Guarantee scheme, aimed specifically at any company in any field pursuing a model that really closes the loop and rewards resource efficiency, to enable the growth of a Product Service Sector 5. Building global green growth partnerships Key Actions: - confirming working relationships with the key external partners that contributed to the roundtable to draw on expertise and communicate our story - build collaboration with EU states and regions via Climate Group and NRG4SD to develop joint programmes which can be funded through European Territorial Collaboration programmes or other appropriate programmes - incorporate green growth partnerships within the Wales for Africa programme - host a States and Regions Summit in March with Climate Group and NRG4SD as part of the follow up to Paris COP21 6. Communicating the opportunities, the transformational examples and measuring progress Key actions: - ensure the Wales brand incorporates the distinctive green growth message - inform, engage and involve wider society to drive the change – build on the “Wales we Want” process and learn from the Energiewende experience in Germany - provide the clear offer of what Government provides that can enable green growth setting out the “ecosystem for an entrepreneurial green growth economy” - highlight the inspirational examples such as River Simple and Hydro Industries case studies as leading examples of delivering green growth and their role in ensuring the well-being of future generations - ensure that the national wellbeing indicators which are required under the WFG Act reflect the key measures of green growth transition – consultation on these indicators begins in mid- October - work with global benchmarking measures such as the Green Economy Index and PWC Good Growth models - work with Natural Capital Coalition on measuring and valuing natural capital assets - convene an annual event and expo to highlight the best examples of “Future Now” innovation and new business models

Peter Davies September 2015 APPENDIX A: SUMMARY OF DISCUSSIONS Introduction Peter Davies, Commissioner for Future Generations, chaired the roundtable on behalf of the Ministers for Economy and Natural Resources, attended by over 60 participants representing public sector, business, and third sector to help build an action plan, emphasising the Government’s commitment to a green growth strategy, and drawing on a range of external expertise from across UK. Based on Government statements, green growth in Wales is defined as: Green growth in Wales is about fostering economic growth, development and social equity while ensuring that our natural assets can continue to provide the resources and environmental services on which our well-being relies. To do this it must stimulate investment and innovation, which will underpin sustained growth and give rise to new economic opportunities, develop our workforce and build skills, and fairly distribute the proceeds of growth through the provision of decent work. The delegates were invited to discuss and share views on how the green growth agenda can be implemented in Wales, whilst considering the expert views from our key contributors who shared their own experiences and approaches of applying this within different sectors and in different states and regions, to help tackle many of the long-term challenges facing us today. The questions that delegates were invited to consider were: 1. What challenges and opportunities that delegates experience in achieving Green Growth? 2. What are the potential actions / solutions in order to achieve Green Growth? 3. If and how can these solutions can apply to Wales / business? 4. What do businesses, public sector and government need to do? 5. How do we measure progress? Key Findings The roundtable raised a number of key issues particularly in respect to: 1. Leadership structures for delivering green growth and low carbon transition We need to make it better to do green growth through business – not just money, but making sure other factors are right - planning, innovation, links to unis. Create a unique identity in Wales that attracts those businesses and investors which match the vision and values we want to achieve for Wales, and take advantage of its size, population and culture. Leadership rests at the heart of the transformational change we are looking to make. In Wales, the collaboration between the two departments of Economy and Natural Resources to jointly address this agenda and develop a joint strategy and action plan has been warmly welcomed. Whilst the strategic leadership is now in place, groups discussed the need to focus on delivery and implementation to make sure that: (a) the green growth agenda can be applied across all key policy areas such as, among others, the Infrastructure Investment Plans, Energy Strategy and Procurement policies; (b) the European funding structures and the projects supported are focused on delivering the green growth strategy; (c) application of the green growth principles are central to the funding support provided to academic institutions and research organisations and making sure that resource and focus is also given to bringing the innovation to market and implementing the world-class research emerging from them; (d) we connect closely with our further and higher education colleges so that we realise the benefits of these research in Wales by building the skills base for the future (e) with increasing devolved powers, focus should turn to using these powers to accelerate transition through more ‘greener’ fiscal levers, especially to encourage more renewable energy generation and increase energy efficiency. Alongside political leadership delegates also emphasised the importance of leadership from businesses and community organisations to help innovate in the products and services to meet demand, and to increase community involvement in building the solutions, as well as from institutions that are established to provide support and guidance and can challenge existing practices. Examples to consider: Pure Advantage in New Zealand; Origin Green in Ireland; 2. Flagship initiatives and infrastructure Government can facilitate the creation of companies with business models that embed sustainability from the start, and help other businesses move towards such models. Alternative business models, including those used by organisations such as Riversimple, by cooperatives, social enterprises, and others – need to be encouraged across Welsh Government’s work, not just in certain areas. There is a desire to turn rhetoric into reality but question whether we can expect more than incremental steps The groups discussed the large infrastructure projects proposed and/or underway such as Tidal lagoon, racing circuit in Blaenau Gwent, M4 relief road, Superfast Cymru being rolled out across Wales among others. These projects should be seen as exemplars that should embody the ethos of green growth – through better procurement practices, employment practices, links to research and application of alternative funding / financing models among others. The City Region areas were also seen as an opportunity where, with the relevant funding, powers and responsibilities, a more coherent approach to long-term sustainability of the areas could be considered. Examples to consider: Energiewende in Germany 3. Ensuring consistency across Government support programmes We need mastery of the Welsh economy – using the levers we have to best affect and seeking devolution of the levers we need. We need a clear index measuring green growth and quantifying progress. The current announcements from UK Government regarding their policy on renewable energy was seen as short-sighted and detrimental to moving towards a low-carbon economy, especially in Wales where many proposed community energy and large-scale projects now face an uncertain future. Many felt that current devolved schemes such as Yni’r Fro, NEST and Arbed, need to be scaled up in order to make a significant contribution to addressing Fuel poverty and inefficiencies in our existing housing stock. Policy levers also needed to go hand-in-hand with the support provisions provided such as Resource Efficient Wales, Invest to Save, Nature Fund, etc so that there is better alignment between policy, support services, incentive programmes and initiatives, etc Examples to consider: ARID (Accelerating Re-processing Infrastructure Development) 4. Developing financial models and targeting investment opportunities It is difficult to do business in the UK compared to the rest of the World – possibly due to lack of appetite to take risk in the UK. Often the public sector officials assessing funding applications are part of status quo not part of new world, from incumbent industries, and may not be adept at seeing potential of investment in new innovative ventures. Raising capital, particularly for innovative projects and services were felt to be a considerable barrier. Many felt that officials responsible for grant-funding or providing capital support had a more ‘traditional’ approach to awarding funding to the detriment of new, innovative ideas which either do not have assets to guarantee their funding and/or are new technologies that need to be tested. Discussions also focused on the need to attract a range of investment capital particularly those focusing on ethical funding, and to support community enterprises where capital support is often difficult to source. Examples to consider: Green Investment Bank 5. Building global green growth partnerships Need to adapt a global language, not just a language for Wales Innovation hubs linking with university / innovation centres based on circular economy Discussions centred on the possible agreement emerging from COP21 and opportunity available with Minister Sargeant as new Vice President of nrg4SD. The International Summit proposed for next year with a focus on accelerating transition to green growth and the role of small states and nations was welcomed by delegates and has been recommended that the Summit also include an expo where we can showcase the best of Wales Examples to consider: ECCI, The Climate Group, Aldersgate Group 6. Communicating the opportunities and the transformational examples Wales needs to market itself as a Green place to do business and to live etc. Businesses have skills gaps in certain areas around sustainability. Maybe the establishment of Qualifications Wales could offer an opportunity to embed sustainability into the curriculum. More open communication about progress in Wales and successes Making Wales attractive – make planning easier, monies available and then projecting and amplifying that message as per the clear Message from Scotland – Open for business, a degree of certainty of getting a return for a business The Green Growth Wales brand offers an opportunity to develop the suite of interventions needed to action a green growth strategy for Wales. With increasing devolved powers likely in the coming years, delegates felt that a coherent strategy would be useful to prepare for negotiations with UK Government on the devolved powers needed, how and where they can be utilised. Many felt that Wales needs to be re-branded within a green growth banner and officials confirmed that some work is currently underway on this and further details will be released toward end of 2015. Groups agreed for the need to have a library of good news stories and examples that can be shared widely and particularly outside Wales. This would be particularly important for our research organisations and high education institutions, where Wales is at the forefront of world-leading research with several Centres of Excellence, where the green growth agenda can also be used to inform their research and find opportunities to bring them to market. Examples to consider: Low Carbon Research Institute, Centre for Alternative Technology, SPECIFIC. Next steps Once agreed, the Commissioner will be working with officials from the two departments along with key stakeholders and experts to prepare more detailed plans to be considered by the Ministers in respect of the proposed International Summit in the Spring. This will also provide an important timeframe for us to demonstrate progress on the actions from the roundtable. APPENDIX B: DELEGATE LIST Bord Gron Twf Gwyrdd - 9 Medi, Stadiwm y Mileniwm, Caerdydd / Green Growth Roundtable - 9 September, Millennium Stadium, Cardiff Name Organisation 1 Peter Davies Commissioner for Sustainable Futures - Chair 2 Edwina Hart AM Minister for Economy, Science and Transport 3 Carl Sargeant AM Minister for Natural Resources 4 Steve Thomas Airbus Airbus OL 5 Tim Benton BBSRC 6 Bonnie Hall BITC Wales 7 Paul Haines British Gas 8 Hamish Macleod BSW Timber 9 Jake Reynolds Cambridge Institute for Sustainable Leadership 10 Gareth Harcombe Cardiff Council 11 Kevin Morgan Cardiff University 12 Paul Allen CAT 13 Martyn Popham Cenin 14 Aled Thomas Climate KIC 15 Lyndon Hughes Convatec 16 Peter Matthews Cyfoeth Naturiol Cymru 17 Emyr Roberts Cyfoeth Naturiol Cymru 18 Rita Singh Cynnal Cymru - Sustain Wales 19 Eurgain Powell Climate Change Commission for Wales 20 Natalie Rees Cynnal Cymru - Sustain Wales 21 Derek Osborn Cynnal Cymru - Sustain Wales 22 Jen Heal Design Commission for Wales 23 Tony Harrington Dwr Cymru 24 Andrew Kerr Edinburgh Centre for Carbon Innovation 25 Duncan McCombie Energy Saving Trust 26 Paul Maile Eversheds 27 Matthew Williams FSB Wales 28 Gwynfor Owen Geiriau Gwyn 29 Oliver Greenfield Green Economy Coalition 30 Stan McIlvenny Haven Waterway Enterprise Zone 31 Mark Harris Home Builders Federation 32 Wayne Preece Hydro Industries 33 Jane Forshaw Local Partnerships 34 Howel Jones Local Partnerships 35 Phil Jones Low Carbon Research Institute 36 Alan Bailey Low Carbon South West CIC 37 John Idris Jones Magnox Sites 38 Stephanie Hime Natural Capital Coalition 39 Emyr Roberts Natural Resources Wales 40 Charles Seaford New Economics Foundation / World Future Council 41 Ewan Tozer Orangebox 42 Kevin Doran Ortho Clinical Diagnostics 43 Huw John Photographer 44 Lauren Carter-Davies PPIW 45 Jeff Brown PwC 46 Andrew Thurley PwC 47 David Clubb Renewable UK Cymru 48 David Morgan RICS 49 Jeff Loo Riversimple 50 Hugo Spowers Riversimple 51 Robert Chapman Robert Chapman & Company 52 Jeremy Smith RWE 53 Tanya Nash Swansea City Council 54 Gill Kelleher Swansea University 55 Robert Dangerfield Tata Steel 56 Anne-Sophie Dornbrack The Climate Group 57 Chris Blake The Green Valleys 58 Tess Blazey Tidal Lagoon Swansea Bay 59 Martin Mansfield TUC Wales 60 Ute Collier UK Committee on Climate Change 61 Stephen Thornton Valero Pembroke Refinery 62 Stephen Holdroyd Vattenfall 63 Steve Edwards Wales and West Utilities 64 Nicola Mehegan Wales Co-op Centre 65 Nigel Keane Wales Social Partners Unit 66 Clare Sainly-Berry WCVA 67 Andrew Fryer Wern Watkin Bunkhouse 68 Tim Peppin WLGA 69 Liz Goodwin WRAP 70 Karen Ellis WWF 71 Jess McQuade WWF APPENDIX C: FURTHER BACKGROUND 1. Green Growth Wales a suite of interventions to accelerate green growth http://gov.wales/topics/environmentcountryside/consmanagement/green-growth-wales/?lang=en 2. Cambridge Institute for Sustainable Leadership - Rewiring the Economy Report – a 10 year plan to lay the foundations for a sustainable economy http://www.cisl.cam.ac.uk/about/rewiring-the-economy 3. The Climate Group bringing together leaders to share evidence of success and pilot low carbon solutions. Part of the “We Mean Business Coalition” bringing together companies and investors to create a low carbon future http://www.theclimategroup.org/ http://www.wemeanbusinesscoalition.org/ 4. WRAP at forefront of the circular economy http://www.wrap.org.uk/content/wrap-and-circular-economy 5. The Green Economy Coalition (GEC) is a diverse set of partners who recognise that our economy is failing to deliver either environmental sustainability or social equity. http://www.greeneconomycoalition.org/ 6. The Edinburgh Centre for Carbon Innovation brings low carbon leaders and practitioners from business, finance and the public sector together to turn good ideas into reality http://edinburghcentre.org/home.html 7. What will it take to decarbonise the economy – PWC’s Low Carbon Economy Index http://www.pwc.co.uk/sustainability-climate-change/publications/low-carbon-economy-index-2014- video.jhtml 8. Measures of Progress towards a Green Economy http://netgreen-project.eu/ 9. Aldersgate Group is an alliance of leaders from business, politics and civil society that drives action for a sustainable economy http://www.aldersgategroup.org.uk/ 10. Low Carbon South West – a membership organisation working to support the growth of the low carbon sector in SW England http://www.lowcarbonsouthwest.co.uk/