More than 200 businesses will receive support to lower their energy costs and cut carbon emissions, as part of the Mayor Sadiq Khan’s Business Climate Challenge to help firms tackle the

climate emergency and achieve London’s target of reaching net-zero by 2030.

A wide range of businesses are signed up to the ambitious programme, including the Africa Centre, a charity that creates and promotes authentic African cultural experiences, Indian restaurant Namaste Holborn, and 20 GP practices. By committing to cutting their energy usage by at least 10 percent a year, they will receive £6,000 worth of technical support to help them operate their workplaces more efficiently, reduce their energy bills, and play their part in tackling the climate emergency. The programme has the potential to save 15,000 tonnes of CO2e if businesses achieve their 10% reduction targets.^[1]

Commercial buildings in London make up 18 per cent of London’s carbon footprint so they have a big part to play in helping London reach our net zero climate target by 2030 but rising fuel and energy costs are hitting London’s businesses hard, as they continue to recover from the impact of the pandemic. 

According to the latest 2023 ONS Business Insights and Conditions Survey one in five London businesses reported that either their production, or both their production and suppliers were affected by the increase in energy prices. Due to price increases, about half of businesses have had to absorb costs and 22 per cent had to pass on price increases to consumers.^[2]

The Mayor has long called for Government to invest in multi-year retrofit and renewables programmes to help all Londoners, including businesses, to achieve greater energy efficiency – the only way to bring down bills and address the climate crisis.   

Launched in 2021 as a pilot programme and developed with support from Bloomberg Associates, the pro bono consulting arm of Bloomberg Philanthropies, the first round of the BCC helped 19 organisations, including Shakespeare’s Globe and London Marathon Events, reduce their energy use by 16 per cent. ^[3] Reducing energy consumption is crucial to weathering the cost of living crisis for businesses – businesses who participated in the BCC in 2021 could save on average £15,774 on their bills annually. ^[4]  The pilot covered 34,452 m2 of workplaces in Better Bankside BID (Southwark) and saved 314,000 KGs of CO2e emissions in its first year. 

In addition to helping 200 businesses directly this year, the BCC is also developing a suite of publicly available resources to help educate businesses across London about reducing their energy use. These materials will include three training courses and 12 ‘how-to’ guides focused on demystifying energy use, decarbonisation and how businesses can kickstart their net zero journey. 

The Mayor of London, Sadiq Khan, said: “The cost-of-living crisis has deeply affected business in the capital and they are facing tough decisions on whether to adequately heat and light their premises or save money on energy bills. 

“No business should face the risk of shutting down due to energy price shocks. The Business Climate Challenge is an excellent way for businesses across London to gain the confidence, knowledge and tools they need to help cut their energy costs, save energy, reduce their emissions and futureproof their organisations. 

“We saw some great results from the pilot scheme in 2021 and I’m glad we’ve been able to extend this scheme to support an additional 200 businesses. However, there is still much more to be done in order to build a better London for everyone – a safer, greener and more prosperous city for all.”

Adam Freed, Sustainability Lead at Bloomberg Associates, which helped design, launch, and scale the programme said: “Businesses around the world are struggling to rebound and recover after the past 2 years – and the recent spike in energy costs has only added to this challenge. Mayor Khan’s Business Climate Challenge provides a global model for cities to provide critical support to businesses, helping them reduce energy costs, create more comfortable workspaces, and putting them on a pathway to net zero emissions.”

Ros Morgan, The Chief Executive of the Heart of London Business Alliance, a partner offering the BCC to their businesses said:  “We are custodians of a place that is acutely aware of the threat of climate change, and in order to ensure the West End is worthy of its world-class status now and into the future, it is vitally important that we take climate change seriously. Taking steps to reduce energy usage is not only good for the environment – it can be a lifeline for businesses that have been hard hit by the soaring energy costs of the last year. We welcome this initiative, which many of our members have already been taking advantage of.” Ros Morgan, Chief Executive, Heart of London Business Alliance.  

Nicole Gordon, CEO of Better Bankside, a BCC partner on the 2021 pilot and this years programme said: “Business Improvement Districts play a crucial part in London’s urban governance and economy. As one of the first BIDs in the UK, Better Bankside has over twenty years’ experience in delivering innovative projects that support businesses to drive change and navigate evolving challenges. Of the many challenges faced by business right now, the climate emergency and rising energy costs are high priorities, but time, investment and expertise can be barriers to taking action. The Business Climate Challenge has been a brilliant opportunity for us to support Bankside businesses to reduce their energy consumption – cutting emissions whilst saving on energy bills.

“We are delighted to be able to support and celebrate businesses committed to energy savings, firstly as the test bed neighbourhood in the pilot, through to the full scale up challenge this year. 60 Bankside businesses have taken on the Mayor of London’s challenge with enthusiasm, with many exceeding the 10% carbon reduction target. As the Government Energy Bill Relief Scheme draws to an end, these programmes are proving that reduction of commercial emissions is not only paramount to contributing to London’s target of becoming a zero carbon city by 2030 but that by reducing energy usage, businesses will also be making savings and building resilience.”   

Julie Tucker from Be Offices, who were part of the 2021 pilot, said: "Our Be Offices Bankside took part in the 2021 Business Climate Challenge pilot and received Mayoral recognition for reducing our energy consumption by 28 per cent. It was a no-brainer to apply for our two Camden-based premises, Be Offices Euston and Headspace Group Hatton Garden, to take part in the 2022 scale-up."

A spokesperson for The Shout House, a hairdresser and beauty shop in Tulse Hill, one of the 200 new businesses to join the BCC said: “The Business Climate Challenge is valuable for us as we want to save money. Business is survival every day at the moment, managing what to prioritise and what can wait. The only way to keep trading is to cut costs. The high street is dying as rents, bills, stock and wages are increasing whilst footfall is declining as customers have less disposable income to spend also as household bills increase, so every little difference can help right now."

Conall Borowski, Little Angel Theatre one of the 200 new businesses to join the BCC said: “We have joined the Mayor’s Business Climate Challenge for a couple of reasons. First, financial impacts of reducing energy bills. Everybody, particularly in the charity sector, is feeling the impact of rising costs and that’s a huge factor for us, our energy bills have gone up by two and a half times in the last 12 months. Secondly, we are very keen on our carbon monitoring – energy use is one of the top three contributors to our carbon emissions, so reducing it has a much bigger impact beyond our cost savings. The value of the energy audit is huge for us. Financial constraints are usually what stop us from being able to access some of the big infrastructure changes, but doing things like audits, show that we are taking action and gives us opportunity to apply for funding for retrofit works.”  

Helena Rivera, Director at A Small Studio, one of the 200 new businesses to join the BCC said: "My energy bill is more than double what it was 12 months ago. But the consumption is actually less! I couldn't believe this when I did a contrast between the bills but it is true. The impact on a small business like ours, which works on a tight cashflow basis is truly detrimental. We are an architecture practice so we are heavy-users of IT systems and can't operate without it. The energy bill this month was 20% the studio's monthly rent for its premises. This is simply too high for an SME."

^[1] Complete data is available for 60 businesses, which has been used to set an estimated emissions reduction for the 225 businesses participating.

^[2] Business insights and impact on the UK economy Wave 74 - Office for National Statistics (ons.gov.uk) 

^[3]Based on data from 16 businesses. Changes in building occupancy levels from 2019 to 2021-2022 and other external factors might have influenced energy use reductions.

^[4] Expenditures were estimated based on BEIS 2022 quarterly electricity and gas prices for the non-domestic sector. Values might differ for specific businesses as they are not based on individual tariffs. Photo by Ввласенко, Wikimedia commons.