Almost half of UK business transformation plans driven by net zero

The 27th Annual UK CEO Survey has found 43% of British corporate leaders are placing climate action at the centre of their future roadmaps.

Conducted by PwC, the study found that more than one-quarter (28%) of business leaders in the UK consider themselves to be extremely exposed to the threat of climate change. 

Meanwhile, 85% of CEOs surveyed have now taken steps to improve energy efficiency, and one-in-four believe the environmental crisis will shift the way they create, deliver, and capture value between now and 2027.

As a result, climate change is now at the centre of future growth plans for almost half (43%) of UK businesses. However, while this sounds positive, alarm bells have been rung by the 26% of participating CEOs who admitted that there are no plans for a net zero transformation. 

Tellingly, 40% of respondents reported that a lack of demand from external stakeholders was inhibiting their company’s chances of decarbonising business models. Lack of climate-friendly technology in their sector was the second biggest obstacle (38%), followed by regulatory complexity (37%) and lower returns from climate-related investments (34%).

‘Meeting climate-related goals and balancing this with overall business performance remains one of the biggest and most important priorities for UK CEOs. We see the most impactful progress made when both decarbonisation and sustainability are integrated into wider business transformation plans,’ said Carl Sizer, Head of Regions and Management Board Sponsor for ESG at PwC UK.

‘The insights derived from carefully structured data, paired with the right technology, will help accelerate decarbonisation plans, while proving progress to stakeholders,’ he continued. ‘Our recent Global Investor Survey showed that 93% of respondents who invest in the UK believe that corporate reporting on sustainability performance contains at least some level of unsupported claims. Ultimately, effective transformation can help deliver the transparency needed to build trust and drive awareness and action on sustainability across an organisation.’

In terms of areas being prioritised for net zero transition, energy efficiency remains the key focus for British CEOs, falling in line with pledges made by world leaders at COP28 to triple the world’s renewable energy capacity within this decade. The rate of efficiency improvements will also be doubled in that period of time. 

‘Amidst ongoing geopolitical tensions and significant electoral activity in several regions, 2024 is set to be a bumpy year on the climate agenda with plenty to distract boards from taking action on sustainability,’ Sizer added. ‘But the culmination of major regulatory change and failure to take action on sustainability and net zero will create both competitive and legal risk.

‘A data-led, actionable strategy, positioned at the core of wider business priorities is vital in securing the commercial value of sustainability. Those business leaders that take the long view and focus on creating progress are likely to be at a significant advantage in the next few years and beyond,’ he continued.

More on net zero and climate change: 

FA and E.ON announce plans to decarbonise grassroots football

UK to leave Energy Charter Treaty after renewables adaptation failure

Tory peer’s High Court intervention on climate plan challenge is damning