British business slows climate action, sees government net zero agenda as unrealistic

By Virginia Furness

LONDON (Reuters) -British business leaders are putting a brake on their plans to combat climate change and do not believe the government's approach to net zero is compatible with growth, a survey of 1,000 executives showed on Tuesday.

Both large companies and small enterprises in health, construction, finance and manufacturing are turning away from climate-related action like target-setting, as falling confidence in Britain's climate agenda and high costs turn the tide on enthusiasm for net zero, the survey by the British Standards Institution (BSI) showed.

The shift is happening despite the Labour government's commitment to boosting green growth, and substantial pledges for investment in clean energy, green technology, and jobs.  

Almost three-quarters (71%) of business leaders surveyed said the government cannot expand the economy while at the same time trying to reach net-zero. Half (50%) said that objective was unrealistic, according to the findings by the BSI, which sets best-practice quality requirements for anything from ball point pens to net-zero plans. 

The turnaround in sentiment coincides with a notable drop-off in corporate target-setting, action and climate commitments among British businesses, with firms citing high costs, lack of finance for green tech and a move to prioritize business growth as barriers, the BSI said.    

Scott Steedman, director general of standards at BSI, said the survey showed a "hiatus in corporate activity probably linked to changes in government policy in the UK after the election and international backpedalling."

Only a third (36%) of British businesses claim this year they have set targets to achieve net zero, a significant drop from the 58% who stated they had done so last year, the survey shows. The portion of businesses this year taking climate action has also fallen markedly from 83% in 2024 to just under a half (49%) this year. 

Overall, the proportion of businesses saying they felt they would likely achieve net zero by 2050 fell from 76% last year to 55% this year, with over half expecting to revise their strategies or targets.

However, the BSI said the vast majority of businesses (83%) still wanted to take action and would like support to do so.  

(Reporting by Virginia Furness, Editing by William Maclean)