RSE INQUIRY INTO FACING UP TO CLIMATE CHANGE: STAGECOACH GROUP SUBMISSION 1.0 Introduction 1.1 Stagecoach Group is a leading international public transport company with bus and rail operations in the UK and North America. The Group employs around 30,000 people and runs around 12,000 buses and trains. We operate more than 1,500 buses in Scotland, including the Highlands and Islands of Scotland, Aberdeenshire, Fife, Tayside, Ayrshire and West Scotland. Stagecoach is also the leading provider of inter-city coach travel in Scotland through Scottish Citylink and the budget inter-city coach service megabus.com. 1.2 We are pleased to have been invited to make a submission to the RSE’s inquiry on Facing up to Climate Change. The submission below addresses the following issues: • Transport and climate change • Risks and opportunities • Impact of the Climate Change (Scotland) Act • Transport priorities • Carbon reduction partnerships • Barriers to change • Regulation and incentives 2.0 Transport and climate change 2.1 We believe modal shift from car use to greener, smarter travel on buses and trains is central to tackling the challenge of climate change. While this may ultimately lead to increased carbon emissions from public transport, the overall benefit to society from dramatic reductions elsewhere will be enormous. Road transport accounts for around 22% of carbon emissions in the UK and it is are rising. Commuting and business travel, for example, accounts for nearly 40% of all miles driven by car in the UK. Government, local authorities, businesses, public transport operators and other stakeholders must work in partnership to encourage intelligent car use and create an environment in which it is easy for consumers to make the switch to more carbon efficient options. 2.2 The current global dependence on fossil fuels is also an issue of energy security, with even more urgent timeframe for action than climate change. Stagecoach is a founder member of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES), which is seeking to engage government more proactively on the peak oil threat, and also to alert the public to the significant impact on consumers. We believe collaborative contingency planning by government, industry, and communities is urgently required to accelerate independent energy supply within the UK and maximise the opportunities from cleaner, alternative energy sources. 2.3 Crucially, meeting the challenge of climate change will require more than technological change through measures such as widespread adoption of electric vehicle technology. Moves towards more sustainable electric cars may cut emissions, but it will not address the problem of congestion, which impacts economic productivity. Government studies show that 8% of UK road traffic is already being affected by heavy congestion and, without action, this will increase by a further 30% by 2025, with the potential to cost business and freight an extra £10 billion a year. 1 Politicians must face up to the fact that it will require lifestyle changes from consumers and we believe this will require a mix of regulation and incentives. 2.4 We also recognise our business has a significant impact on the environment. We are working hard to reduce our own carbon footprint and make our business as sustainable as possible, while offering high-quality, easy-to-use services to attract more passengers and contribute to a virtuous cycle of reduced environmental impact. 3.0 Risks and opportunities 3.1 Climate change is a major factor influencing our business and transport operations, bringing with it both risks and opportunities. These include: • Regulatory risks o Government legislation introducing carbon credits (eg Carbon Reduction Commitment) o Government taxation policy (eg fuel tax) o Environmental criteria to qualify for Government grants (eg Bus Support Operators Grant) o Regulation affecting vehicle emissions (eg European legislation on engine standards) o Low emissions zones introduced by transport authorities • Physical risks o Increasing impact of extreme weather, such as flooding and ice, on transport infrastructure, such as the road and rail networks o Risk to operational facilities and transport fleets located near to rivers or in coastal locations from rising sea levels o Changes in consumer travelling habits due to weather changes o Reduced passenger comfort resulting in public transport being seen as less attractive o Climate change generated modal shift from car to public transport has the potential to increase the weight of buses and trains, leading to reduced fuel efficiency. • Opportunities o Bus and rail have a carbon advantage over car travel that we can use to increase our market share o Involvement in trials and development of new low-carbon technologies that can reduce cost to our business o Government strategies to decrease global carbon emissions from surface transport are supporting public transport growth o Climate change induced modal shift from car to public transport has the potential to free up road space for buses and coaches, leading to reduced congestion, better traffic flows and improved fuel efficiency o Stagecoach research has established that consumers are more likely to travel with a company whose ethics support the environment and that they will pay more for greener public transport. o Taking action to reduce carbon emissions now will reduce long-term costs from compliance, clean-up and purchasing carbon credits 3.2 For those reasons, we believe it is important to look closely at any solution that can improve the efficiency of our operations or reduce our carbon footprint. We are working with a range of stakeholders in Government and transport to minimise the risks of climate change on our business. Through our Carbon Management Programme, we are also raising awareness of these issues with our employees, our customers and other stakeholders. 2 4.0 Impact of the Climate Change (Scotland) Act 4.1 The Climate Change (Scotland) Act is a positive piece of legislation. It will help provide a focus for greenhouse gas reductions and moves towards a low carbon economy through far-reaching carbon reduction targets for 2020 and 2050. However, it is essential these targets are supported by action from the public and private sector, and individual consumers in particular. 4.2 Stagecoach Group is represented on the Scottish Government’s new 2020 Delivery Group, which brings together a wide range of expertise from central and local government, business, trade unions and NGOs to examine in detail the actions needed across Scotland to meet the aspirations of the Act. 4.3 Stakeholders need to build practical and effective partnerships and focus on entrepreneurial and innovative thinking. In terms of transport, we need greater leadership and more bold and imaginative pro-public transport policies from local and national politicians. 4.4 Most importantly, however, the success of the Act will depend on successful engagement with consumers. A Stagecoach survey of more than 13,000 consumers across the UK in 2008 found that consumer environmental concerns are growing, and that changing attitudes are flowing through into signs of changing behaviour. Environmental and health concerns, as well as price and concessionary travel schemes, were key drivers of this trend. Nevertheless, our experience suggests that green marketing messages to consumers are not effective in isolation. 4.5 For that reason, politicians need to pursue policies that will also help deliver a price, speed and accessibility advantage to public transport modes. Continued investment in the quality and capacity of the country's rail and bus networks and infrastructure is essential if we are serious about making Scotland and a more sustainable country in which to live, work and travel. Transport is often combined with walking or cycling as part of an integrated journey by bus or train, providing an opportunity to combine greener and healthier living campaigns. 4.6 Stagecoach’s emphasis on sustainable business pre-dates the Climate Change (Scotland) Act, but is consistent with the principles that underpin the legislation. Our strategy centres on steps to address the risks and opportunities facing our business, how our individual employees can incrementally help deliver change and how we can help our customers lead more sustainable lifestyles. 4.7 Our Group-wide Carbon Management Programme (CMP) provides a strategic approach to assessing the impact of climate change and identifies short, medium and long-term risks and commercial opportunities to the business. We are focused on: • Meeting our regulatory obligations • Investing in more fuel efficient vehicles • Using alternative, renewable fuels • Training our people in more efficient driving techniques • Saving energy at our offices and depots • Conserving and recycling water • Reducing and recycling waste • Reducing business travel • Offering affordable bus and rail travel • Developing green travel plans and incentives for our people, customers and other organisations 3 4.8 The key outputs of the CMP are: • defined Global Carbon Footprint for Stagecoach Group • implementation plans for emissions reduction across the Group • set of agreed tailored carbon reduction targets for each division • robust, consistent system for measuring and monitoring carbon emissions and performance against the targets across the whole business • voluntary disclosure of our carbon footprint to the Carbon Disclosure Project 4.9 We are committed to continuous improvement in environmental management and endeavour to go beyond strict compliance with the law. In addition, we encourage our business partners, suppliers and contractors to manage their own environmental affairs in the spirit of this policy. Stagecoach Group is a signatory to the Copenhagen Communiqué on Climate Change, and wrote to a number of its peers in the transport sector encouraging them to sign up to the Communiqué. 5.0 Transport priorities 5.1 We believe a range of potential carbon reduction technologies should be investigated to ensure Scotland and the UK faces up to two massive converging challenges – oil depletion and climate change – both of which require massive changes.