On 16 July, speaking as a keynote speaker at AIMA's flagship ESG event - 'Putting ESG into Practice 2024' - the Rt Hon Chris Skidmore, former Minister for Energy and Chair of the Net Zero Review said:

Thank you for inviting me to speak today. Last month, I published a new report, ‘At A Crossroads’, setting out what a new government would need to deliver in its first 100 days, first year and over the next five years, if it was to remain on track to deliver on its net zero commitments for 2030.

The report was published five years to the day since I signed the UK’s net zero commitment into law, becoming the first G7 country to do so.

Five years on, so much has changed, that in many respects I wouldn’t have believed you if you told me that 93% of global GDP, represented by over 80% of countries would have signed up to a net zero target. I wouldn’t have believed you that the international community would have gone further, committing to phasing down fossil fuels, halving emissions by 2030, trebling renewable power, committing to add 11,000 GW of clean energy to global grids. I wouldn’t have believed you also that in not only the UK, but now also in the US, wind power would have replaced coal as the main source of electricity.

We are living in remarkable, revolutionary, times, where the growth of both solar and wind power is exponential. All countries have woken up to the fact that renewable power is not just a nice thing to have but is an essential and urgent part of future economic growth, enabling greater energy security with home grown energy, reducing costs and creating jobs.

That opportunity, this imperative, was what I set out to describe in the Net Zero Review, Mission Zero, that set out how delivering net zero could be the economic opportunity of our generation, creating over 450,000 new additional jobs, bringing with it £1 trillion in private inward investment. Already a report earlier this year from the Energy and Climate Information Unit, on the UK’s Net Zero Economy, found that businesses working to deliver net zero contributed £74 billion in Gross Value Added (GVA) in 2022-23, which is equivalent to 3.8% of the UK economy – larger than the economy of Wales (£66 billion). They also supported 765,700 Full Time Equivalent (FTE) jobs, equal to nearly 3% of total UK employment.

I wouldn’t have believed you five years ago, if you had described to me the future pace of change, but perhaps I wouldn’t have believed you also if you told me that, in spite of all this, my own government under Rishi Sunak would decide to row back on key net zero policies, and to promote the issuing of new, additional oil and gas licences, approving fields that would not be operational until for decades to come, in the face of official advice from the UNCCC, the International Energy Authority and the UK’s own independent Committee on Climate Change, even proudly introducing new legislation that would commit the UK to annual licensing rounds, even against the advice of the North Sea Transition Authority.

When the row back came last September, I said that this would be viewed as one of the greatest mistakes of Sunak’s Premiership. Not only was it environmentally disastrous, it made no economic sense.

Just as we are facing ecological tipping points, so too we are facing economic tipping points that will make future investment in new oil and gas non-sensical. Already this year, demand for fossil fuels, in China in particular, seems to have peaked. And as electrification of transport, of home heating, and of industry gathers apace, global demand for fossil fuels will being to wither. Already clean energy to fossil fuel investment is at a ratio of 2 to 1, and is expected by the IEA to shift to 4 to 1. In Ernest Hemingway’s 1926 novel, The Sun Also Rises, one of the characters is asked how he went bankrupt. ‘Two ways’ he replied, ‘Gradually and then suddenly’. So too those who wish to continue invest in fossil fuels, those private equity investors who continue to prop up the industries of the past, will gradually, then suddenly, fail.

Already in the UK, the number of jobs in the oil industry has more than halved from 450,000 to 200,000 in the past ten years, and continues to fall. It makes no sense to create stranded industries of the future, stranded communities of the future, by offering them false hope and promises of a future that no longer exists. Already extraction from the North Sea is becoming uneconomical, with little oil left: that which remains has to be refined abroad, and is overwhelmingly, 85%, sold on international markets. There is no such thing as UK owned gas and oil: the only thing British taxpayers are on the hook for is the huge decommissioning costs of £18 billion for rigs that will soon fall into disuse.

It was for these reasons, both the environmental costs but also the economic reality, that I decided to resign from Parliament and my own party. Having signed net zero into law, I could no longer defend the actions of my own government in making such a monumental mistake of legislating for new oil and gas. It turns out it was also a monumental political mistake, with recent polling demonstrating that the net zero row back caused other Conservatives concerned about the environment to vote Labour or Lib Dem instead, leading to losses not only in Red Wall seats, where net zero has a huge opportunity to revitalise manufacturing and regional growth, but also in the Blue Wall in the South.

With a new government and a near record majority, there is now the mandate for change and to deliver a gear shift towards delivering net zero growth opportunities. As one of the Labour government’s five priority missions, creating over 400,000 new jobs, net zero and sustainability will be front and centre of its political vision for the country. Already in its first week in power we have seen planning restrictions for onshore wind ripped up, new solar farms generating power for 400,000 homes approved, government defence of a new coal mine abandoned, and the establishment of a new Mission Control, to deliver a 2030 net zero power grid, led by former CCC Chief Executive Chris Stark.

As I set out in my latest report, At A Crossroads, the first 100 days of this new government will be critical if we are to meet our own 2030 commitments of 68% emissions reduction. Above all, we need to provide investors and private capital markets with the confidence that the UK is open for net zero business. That requires the certainty, clarity, consistency and continuity of policy frameworks- the four Cs that I set out in the Net Zero Review- and a long term approach that provides stable investment conditions.

For myself, it was welcome to see the commitment to establish an Office of Net Zero Delivery- one of the key recommendations of the Net Zero Review- that will help co-ordinate across government and the regions how to best deliver net zero. This was one of the 28 recommendations out of the 129 not taken up by the previous government, yet perhaps the most important. Getting governance and accountability structures correct, in this first 100 days, will be essential if the transition is to not suffer any further delays. To accompany this, however, the new government should also commit to an investment roadmap, that sets out in detail what projects and infrastructure can be delivered, what is the timescale for this, and what is the balance of public and private investment needed to unlock them. Already in the US, every dollar invested through the Inflation Reduction Act or the Build Back Better Act has been accompanied by a private investment equivalent of 5.47 dollars. And in the UK, new exciting public private partnerships such as the Bristol City Leap have witnessed £7 million of public funding unlock £435 million of private funding from the Boston based AMARESCO to decarbonise the city’s housing estate and heat networks.

The Cities Climate Commission 3Ci have a database of investable net zero projects, the national Net Zero Project pipeline, and more are been established through the use of Local Area Energy Plans, established by the Energy Systems Catapult, that are mapping out what needs to happen to deliver the energy transition in local authority areas, but also what investment and private capital is needed to deliver it, essentially acting as prospectuses for net zero business.

Net Zero is an opportunity for local and regional areas above all to champion local projects that can generate growth and regeneration. As Mayor Ben Houchen, the Tees Valley Mayor who ran on a ticket of promoting net zero, wrote in his net zero strategy, ‘net zero is not about what we have to give up, but what we have to gain’.

This message of hope, of facing the future, is what we all need to double our efforts in focusing upon, making the transition real to people, by setting out clear pathways to new jobs, lower bills, better housing and health, and a safer, cleaner environment. Rather than get bogged down in technical details of ratings and anacronyms, let us not forget why we are doing this, and who we are doing it for.

Already we are seeing in particular in the US and in parts of Europe a so-called ‘greenlash’, where populist politicians are playing on people’s fears and concerns to turn against sustainability. We cannot afford to let them win. It requires from us all the determination to not deliver sustainability for its own sake, but to prove that, as I have stated, there is no fairness, no hope in clinging to dying industries. We have no choice but to transition people towards the jobs of the future, the industries and businesses of the future, because there is no alternative.

It is a message we must all do better to make clear. In Port Talbot, Wales, for instance, the decision to close aged blast furnaces that needed to close should have been properly planned years ago. Yet for too long we turned our face away from the inevitable. Yet Hemingway’s law could not be more apt: first slowly, then quickly, similar industries will face a similar disruptive challenge. We need to be prepared, to invest and plan to invest ahead of those tipping points, where green and sustainable solutions such as electric arc furnaces saved 3000 jobs, rather than see all 6000 jobs lost.

As I have stated, we are indeed at a crossroads: the choices and decisions the government makes this year will decide if we meet our net zero targets for 2030, and in turn whether we can stay on track for net zero by 2050. But we cannot all simply wait for governments to act, to react to the decisions they make. We all have a responsibility ourselves to get on with the job of taking action now, delivering now and not waiting until it is too late.

As investors, you hold the hopes and dreams of so many regions across the world like Port Talbot, or cities such as Bristol seeking private investment, in the investment decisions that you will make over the next five years.

It is a great responsibility, but a remarkable opportunity to shape the future not just for the next five years, but for the next century. Across the world, countries are preparing to embrace the energy transition, now that we know what needs to be achieved, and when it needs to be delivered. We have now entered a new phase in taking climate action, where we are all agreed on what needs to take place: the Paris Agreement and its subsequent negotiations on its text have nearly all been concluded.

We now need to act, and to act at speed.

This requires each and every one of us to play our own individual roles as best we can, to make change happen. Not just to talk, but to deliver and implement, to help get spades in the ground and get on with reducing emissions not in five years time, but within the next five years.

For we have just under 2000 days- 1995 to be precise- until the start of 2030. Within that time, the majority of countries across the globe have committed to trebling our renewable sources of power on the path to nearly halving our emissions.

I stated in my resignation letter earlier this year in January that just as Tony Benn once stated that he was leaving Parliament to dedicate more time to politics, I too was leaving elected office to devote all my time to the policy and politics of net zero. For the past few months, I have sought to establish how I can play my own role in furthering the cause of net zero, sustainability and the energy transition.

Last month, in the Guildhall, I launched with Secretary John Kerry the Climate Action Coalition, that will bring businesses and industry together to focus on supporting and delivering the 2030 climate goals I have mentioned, convening roundtable evidence sessions and events, to produce reports that will highlight both policy recommendations and best practice ways of working that are already having real time results in reducing emissions.

I’m delighted to announce that Germany’s Climate Envoy, Secretary Jennifer Morgan, will be speaking at an event explaining the Climate Action Coalition’s work in further detail on 26 July. Consisting of five taskforces, one of these will be Climate Finance and Investment, and I would welcome any company or organisation that is keen to be involved and help influence policy or indeed highlight best working practices, to contact the Coalition at [email protected]

Today, I can further announce a new initiative that I have helped to establish, that I hope will indeed put into practice, and deliver some of the opportunities that I have previously spoken of.

While I stated in the Net Zero Review, Mission Zero, that net zero and sustainability is the economic opportunity of our generation, with up to a trillion pounds worth of inward investment able to be generated, as I travelled the country meeting with businesses and organisations, it was clear that for companies seeking to innovate and scale up the solutions needed to decarbonise or reduce emissions, access to private capital was their major issue.

As a former UK Science, Research and Innovation Minister, I have long been familiar with the ‘valley of death’, that has for too long and too often seen excellent and world leading technology companies forced to relocate to other countries, too often the US, if they wished to truly succeed.

For companies and businesses seeking investment from private investors, it has been doubly frustrating that while commitments have been made to green finance, to focus on creating reporting and disclosure frameworks that burnish companies climate and ESG credentials, still we do not finance enough green. For those companies that know they can provide the solutions to both help tackle the climate crisis, or meet the changing demands of our ever changing world, they cannot wait for yet another ESG framework through which to be judged: they need support today.

Yet too many companies seeking investment to scale up and grow lack the connections and networks into international networks of institutional and private investors who are seriously willing to consider financing the technologies of tomorrow. The disconnect between investors and their potential investments has perhaps never been wider: private capital accumulated in funds standing unused is now at record levels, with nearly four trillion dollars of dry powder in 2023, up 400 billion on the year before.

That is why I can announce today that I am helping to establish a new private boutique investment bank, Desmos Capital Partners, that intends to focus on providing the support needed to companies seeking to scale and raise capital.

Desmos is Greek for bond or tie: and together with my partners we will seek to help build those ties and networks for companies that wish to work with us, allowing them to grow not only in size, but in their global outlook and reach. By working alongside and in close proximity to companies, helping to shape their investment strategies and build their own networks and influence, Desmos intends to support companies seeking to raise funds from £5 million upwards as they deliver a Series A or B raise or future growth rounds. And rather than merely approach venture capital funds, Desmos will also seek to help companies achieve their ambitions by looking at creative funding structures and alternative sources of capital including from a wide network of private family funds and investors who are seeking to invest in the future.

Desmos will be a global operation from the outset, with offices in London, Paris, and soon Dubai and Toronto. I am fortunate to be joined at Desmos by some highly experienced banking experts from across the world, who share my vision that the world is changing, and we need to bring new perspectives and new outlooks to traditional forms of investing. New markets are being rapidly created, not just in sustainability and net zero, but wherever the impact of new technologies and innovation is occurring: in AI and digital transformation, in communications and last mile technologies, in new forms of transport, in the new pathways of health care delivery, from genomics to digital health.

What joins all these new markets together is the fact that little more than a decade ago, they existed only on paper, as prototypes or models in university laboratories. Now they are, like net zero, transforming the world. Desmos seeks to help support that transformation, knowing that today’s new technologies will become tomorrow’s assets.

I wanted to use this occasion and opportunity today, to announce this next step on my journey to do all I can to turn the words on a page, in my case the UK’s commitment to net zero that I signed into law five years ago last month, into concrete action and my own personal commitment to deliver and implement net zero and sustainable change on the ground.

For myself, the launch of Desmos Capital Partners today is an important stage in making that commitment a reality, as I seek along with the dedicated team we are creating across the world, to help support and scale up companies whose success our future will be dependent upon.

Myself and the Desmos team would be delighted to hear from you both if you are a fund manager, asset owner or institutional investor who seeks to place capital into companies seeking raises, or if you wish to put us in contact with a company you know that is seeking investment for a raise. Or if you simply wish to find out more about what Desmos will seek to deliver, please do get in contact with us at [email protected]. Building new ties and networks and discovering common ground for the companies we seek to serve is at the heart of what Desmos wishes to achieve.

I hope that you can all recommit to the common purpose that brings us all here today: to scale up the impact and investment that can and must be made into ESG, whether you call it that or not, or simply prefer to focus on getting on delivering the energy transition.

The reality is that net zero and sustainability is here to stay: no government or administration is going to be able to alter the reality of market forces, forces which I have already stated are moving decisively away from fossil fuels and towards clean sources of power, away from coal towards wind power and solar and above all to recognising that the only future we have, not just environmentally, but crucially economically, is a sustainable future. Thank you.