This report examines how well new processes and systems for embedding sustainable development are working in the Department for Business, Innovation and Skills. This is the first report of its kind - examining an individual department in this way - by the Committee. It examines BIS performance against sustainable operations targets, the role of a 'Sustainability Champion' and a Sustainability Committee in BIS, and how well sustainability considerations are taken into account in policy-making case studies. These case studies included the Regional Growth Fund and the Industrial Strategies initiative. They found that overall the Department was delivering on their sustainable operations targets, although that was in part the result of reductions in staffing and the size of the BIS estate. On policy-making, however, analysis of specific case studies indicates that environmental and social aspects of sustainability are not getting the same attention as economic factors. The assessment process needs to be reformed to do so. Defra and the Cabinet Office should challenge other government departments which have similar grant schemes to do the same. They are also disconnected from the BIS Business Plan process, weakening the main vehicle by which Defra and the Cabinet Office challenge the sustainability-proofing of BIS policy-making. BIS, including its agencies and NDPBs, should produce sustainable development strategies, to provide a reference point for sustainability initiatives by senior management and the sustainability champion, and to allow all staff to readily understand the wider sustainable development imperatives

The Environmental Audit Committee points out that there is a large green finance gap. Investments are currently running at less than half of the £200 billion needed in energy infrastructure alone by 2020 to deliver national and international emissions reduction targets. And stock markets could be inflating a 'carbon bubble' by over-valuing companies with fossil fuel assets that will have to be left unburned in order to limit climate change. The Bank of England's Financial Policy Committee should seek advice from the independent Committee on Climate Change to help it monitor the systemic risk to financial stability associated with a carbon bubble. To address the green finance gap, the Government must provide a joined-up, stable and certain policy framework that maintains investor confidence and helps markets price in the cost of carbon. The Green Investment Bank has made a good start but does not currently have the power to borrow in order to leverage and enlarge its investments - limiting its potential to fill the green finance gap. Take up of the Green Deal has been poor and the Government must make it simpler and more attractive to households. The European Commission's (EC) proposed new rules for State Aid in the energy sector could limit the finance available to support community owned energy schemes. The Government must play a central role in agreeing ambitious and binding international commitments on climate change, both in the EU and in the run up to the UN climate talks in Paris 2015.

The Government is shifting the goal-posts on fuel poverty so that official statistics record far fewer households as fuel-poor. The changes to the fuel poverty definition and target, in part being made through amendments to the Energy Bill, should be stopped unless the Government is prepared to make a public commitment to end fuel poverty altogether. A short-term bid to cut bills must not throw energy and climate change policy off-course. In the longer term green levies could actually keep bills down if they drive energy efficiency improvements that cut the cost of heating our homes. Insulating homes and supporting green technologies is vital to help the fuel poor and cut the emissions causing climate change. At the Rio+20 Summit and the G20, the Government committed itself to phasing out fossil fuel subsidies that encourage wasteful consumption and contribute to greenhouse gas emissions. The Government must set a target to reduce subsidies to harmful fossil fuels. The Government should also use the Autumn Statement as an opportunity to provide a clear and comprehensive analysis of energy subsidies in the UK. The report also looks at whether Government support for the new nuclear power station at Hinkley Point constitutes a subsidy and concludes that it does, despite the Government's assurance otherwise. The Government's policy of 'no public subsidy for new nuclear' requires it to provide only 'similar' support to that provided to other types of energy, but even on that basis the deal for Hinkley Point C is 'dissimilar', notably on support for decommissioning and waste.

This report assesses the Government's progress in embedding sustainable development in the Home Office. It follows on from a similar inquiry last year on Sustainability in BIS. The Home Office appears to be on track to meet the Government's sustainable operations targets for departments, in part by reducing the size of its estate, but also by effective use of payment-by-result contracts. It has achieved the reductions set for water, paper and waste. It is making good progress on reducing carbon emissions, despite emissions from travel increasing significantly. The Home Office uses a 'CAESER' tool to highlight sustainability to suppliers and encourage them to improve their performance. The Government should widely adopt this tool for all major suppliers. The Home Office needs to ensure that all contracts include specific sustainability criteria and that performance on these is actively monitored and managed. It should address energy efficiency in its contracts for asylum accommodation. Crime prevention is an important part of sustainable policing, as it reduces future social and environmental costs. Whilst the Home Office is taking steps to understand the carbon impact of crime, the Government's policies to remove housing design standards risk less sustainable outcomes. It should ensure that the full environmental and social costs of such decisions are analyzed in policy appraisal. The Government has led international efforts to tackle wildlife crime. It needs to commit long-term funding for these efforts, and further improve the quality of data on recorded and reported offences.

Emissions of a number of airborne pollutants increased in 2013, after being steady between 2010 and 2012 and in a longer term decline before that. The UK failed to meet targets for nitrogen dioxide pollution in 34 of the 43 zones specified in the EU Ambient Air Quality Directive in 2012, resulting in the European Commission launching infraction proceedings against the UK in February 2014 in regard to 16 zones that would not be compliant by 2015. The Committee's report recommends an overarching Environmental Strategy be implemented, to set out strategic principles and good practices; facilitate discussion between central and local government and identify how they can work together and with the wider community; encompass clear environmental assessments; identify work required to fill data gaps in assessments; map appropriate policy levers to environmental areas; and set out how environmental and equality considerations will be addressed in policy areas across Government. The report concludes that the Government should set up an independent body-an 'Office for Environmental Responsibility'-to (i) review the Environment Strategy we advocate; (ii) advise Government on appropriate targets; (iii) advise Government on policies, both those in Government programmes and new ones that could be brought forward to support the environment; (iv) advise Government about the adequacy of the resources (in both central and local government) made available for delivering the Strategy; and (v) monitor and publish performance against the Strategy and its targets.

The Government's ’Natural Capital Committee', set up to check how far the Government bases its policies on the cost the benefits the UK derives from its natural environment - such as clean air, water, food and recreation - should be put on a permanent statutory footing, the Environmental Audit Committee recommends. The NCC was set up in May 2012 with a three-year remit that ends just before the General Election. It has produced 2 progress reports so far, highlighting gaps in the available data on these factors and calling for a 25-year plan to plug the gaps and start using the information in Government decisions. But the Government has yet to respond in detail to those NCC reports. The environment is just one strand of a wider view of people's well-being, which also addresses people's economic and social circumstances, as well as their view of the satisfaction they get from their lives. In November 2010, the Prime Minister launched a programme to measure well-being to complement economic statistics like ’GDP' in - "measuring our progress as a country". However, more than three years since then, the Committee note, our quality of life is not yet receiving the same attention as those economic metrics. The Committee highlight the links being uncovered in the statistics between people's view of their well-being and their background and circumstances - for example the link between well-being and people's health, marital status or religion. But the MPs warn that the data are not yet sufficiently robust to support a single metric that could encompass well-being and which could be set alongside GDP.