A blow to the Heathrow expansion: what this means for the wider industry

Recent developments in the Heathrow expansion case are sure to cause a ripple not just in this project but in similar developments across the UK. It has the potential to be a truly momentous moment for the private sector as it opens the door for every project to be scrutinised in the same manner, potentially leading to many plans being put on the back burner.

For those who have not been following the tumultuous journey of Heathrow Airport’s third runway, it has been a contentious project since the start. First posited under Gordon Brown’s Labour government, the expansion has already been tabled and revived once. Those in support of it argue of the financial benefits – a much-needed injection into our economy. Detractors, on the other hand, point to its environmental impact and how it doesn’t gel with our carbon neutral commitments.

In this landmark case, the Court of Appeal ruled the government’s decision to allow this expansion as unlawful. It clashed with our commitment to the Paris accord and the Climate Change Act. The government has already said it will not fight back against the decision, acknowledging their desire to make sure it fits with any carbon plans, but Heathrow Airport is determined to overrule the decision.

Climate activists celebrated outside the courtroom as the ruling came in. But it’s interesting to play devil’s advocate and search for any nuance in the topic. How will this landmark decision change things, and will it be for the better?

Profits vs environmentalism

There are two angles to consider in this case: the financial element and the environmental element. Today, the two are intertwined, and it’s hard to separate one from the other. That’s just as true for the Heathrow expansion case.

It’s hard to dispute the arguments for the expansion; Heathrow is a hub of trade, with 40% of the UK’s exports to non-EU countries travelling through the airport. London’s airports are already running at capacity – the Airports Commission was founded by David Cameron’s government to address that very issue. They found that Heathrow was the best candidate to help ease the burden.

With Brexit still hanging there like the Sword of Damocles, securing routes for trade is essential. Then, on top of that, the project would have boosted the British economy by £61 billion and created up to 33,000 jobs. But there is one key thing here that puts the spoke in the wheel: it was illegal.

It went against all efforts this country has made to lessen our environmental impact. We have agreed to fight against climate change and work towards becoming climate neutral. The proposed expansion did not compute with those plans though. Another popular argument against it is it encourages more plane use, which will – of course – put more harmful emissions into the environment.

So it becomes a war; do we want to secure our economy or our environment? Then it becomes more complicated: by securing our economy with this will we have more to invest in future environmental pursuits? And then you have to consider the fact people will still travel regardless of whether the third runway exists. What is the net difference between what they would have put out and what they now will put out instead?

The wider picture

This topic of conversation goes beyond Heathrow; over in America, profits vs the environment was incredibly relevant to asset management firm BlackRock. As one of the world’s largest investors, they hold a lot of sway, so their annual letter this year will no doubt have global ramifications.

In it, CEO Laurence Fink pointedly proclaimed that they would reassess their involvement with any company deemed to “present a high sustainability-related risk”. By threatening to pull their investment with anyone that doesn’t consider their environmental impact, they force big companies who are avoiding the issue to put in the effort finally.

This isn’t the first time this annual letter has set out to change the hearts and minds of these big businesses; two years ago Mr Fink claimed companies needed to “have a purpose beyond profit”, offering them the chance to reflect on their impact on the world.

For years many big companies have talked a big game about their environmental commitment, but these recent developments will force people to put their money where their mouth is. In America, environmentalism has become a partisan issue where current president Donald Trump is actively rolling back initiatives to protect the environment. So it will be interesting to see if the environmental change we need is instead driven by a private institution like BlackRock.

A fight for a greener world

And that’s what this fight will ultimately come down to: profits vs environmentalism. We are at a turning point it seems; businesses have avoided changing their ways because it could eat into their short-term profits. But with threats to their long-term gains, they might be put in a position where they have no choice. It could even lead to the death of “greenwashing” – where companies will over-emphasise their environmental commitments to make a quick buck.

But whatever happens next, it may well be a rocky journey. Environmental analyst Roger Harrabin put it best on the BBC News site: “It’s not clear that’s what MPs intended when they signed up to the 2050 target, but in today’s court ruling, it’s what they’ve got.”

It’s all well and good signing up to such an agreement and posturing about their commitment, but we can now see it’s true impact. The Heathrow decision will just be the first of its kind as similar projects are halted for the same reasons. If it doesn’t comply with the Climate Change Act and our efforts to reach zero emissions by 2050, it can’t go ahead. This may be the turning point where the environment finally comes before profits.

At Impact Reporting, we are huge advocates for environmental progress. This landmark decision will hopefully change the landscape for the better and people should start to take their impact seriously. If you would like a simpler way to monitor your progress towards your environmental commitments, get in touch with us to see what we can do to help you!.