Request Free Trial

In Charts: Politicians not providing enough clarity on green policy, say UK businesses

More than a third of respondents to the BSI survey said uncertainty over the current government’s green policy commitments has affected their ability to make progress on achieving net zero © Andy Rain/EPA/Shutterstock
More than a third of respondents to the BSI survey said uncertainty over the current government’s green policy commitments has affected their ability to make progress on achieving net zero © Andy Rain/EPA/Shutterstock

The cost of living crisis is the biggest macroeconomic factor hampering UK companies’ net zero efforts, followed by uncertainty about government policy

A lack of clarity from the current UK government and a potential future government on green policies are hampering UK businesses’ net zero efforts, survey results show.

The survey of more than 1,000 senior decision-makers in UK companies by the British Standards Institution, a government-funded body, found the cost of living/energy crisis was the most common macroeconomic factor impeding businesses from making progress on achieving net zero.

Fifty-one per cent of companies that responded to the survey of small, medium and large businesses said the cost of living/energy crisis had been an issue for them.

Meanwhile, 38 per cent of respondents said uncertainty over the current government’s green policy commitments has affected their ability to take action. A lack of policy uncertainty from a potential future government was also cited as an issue by 35 per cent of businesses. 

Green industries criticised the incumbent Conservative government for its rollback of a series of key net zero policies in September 2023, and UK companies have spoken out against the politicisation of net zero by UK Prime Minister Rishi Sunak. Meanwhile, Labour, the main opposition party, has also scaled down its climate-related commitments in recent months. In February, it backed out of a £28bn green energy investment pledge, reducing the total to £5bn in favour of controlled spending.

Cost remains the biggest barrier

When asked about specific barriers holding back their net zero efforts, cost was the single biggest issue, selected by 40 per cent of businesses

For 15 per cent of respondents, supply chain difficulties, such as sourcing from companies that meet the necessary net zero credentials, was the main barrier, and for 11 per cent it was insufficient clarity on what net zero means or enough guidance on how to take action.

Despite concerns about costs, almost half (48 per cent) of businesses are aware that taking action towards net zero can reduce operating costs.

Additionally, 77 per cent of companies agreed it was “fair” that their organisation contributes to the country reaching net zero, “even if it comes at an economic cost” to them.

Businesses remain confident

Despite identifying challenges associated with meeting net zero, businesses remain confident they will achieve their targets by 2050.

Almost 80 per cent of companies were either “very” or “fairly” confident their organisation was “likely to achieve” net zero emissions. A majority (72 per cent) also said they would be taking action to move their business towards net zero “in the next 12 months”.

Businesses lag on measuring emissions 

Responding to a question about how they measure their emissions, 23 per cent said they “fully” measure Scope 1 emissions, compared with 22 per cent that “fully” measure Scope 2 emissions, and 18 per cent that “fully” measure Scope 3.

A larger share of businesses did not measure their emissions “at all” — 23 per cent did not measure Scope 1, 26 per cent did not measure Scope 2, and 35 per cent did not measure Scope 3 emissions.

Companies’ size affected how likely they were to measure their Scope 3 emissions. Thirty per cent of large businesses (those with 250 employees or more) said they measured, fully or in part, their Scope 3 emissions, versus 18 per cent of small to medium-sized enterprises (which have between 10 and 250 employees).

Meanwhile, 65 per cent of businesses fully or partly measured their carbon removals, and 67 per cent fully or partly measured “counterbalancing measures”, which BSI says covers carbon credits and offsets.

A service from the Financial Times