1. What the data says
Strategic priority
- A recent survey (the UK Business Climate Hub’s 2025 UK Net Zero Business Census) found 79% of large UK businesses regard net-zero as a strategic priority for the year ahead. (British Business Bank)
- Among small and medium-sized enterprises (SMEs), about 35% also view net-zero as a priority. (Business Money)
- In an earlier (2024) survey, 73% of organisations reported net-zero is a strategic priority. (Default)
Plans & targets
- In the 2024 census, ~57% of organisations had a formal emissions-reduction plan, and ~29% intended to create one within the next year. (ESG News)
- Only ~65% of UK firms had a plan to reduce emissions to net-zero (by 2050) in one large survey. (Business & Human Rights Resource Centre)
- More than half of large organisations are receiving requests from customers or tenders for carbon-data or supply-chain emissions data (51% of large organisations; 62% of those exporting). (Business Money)
Perceived benefits
- Among large organisations, only ~3% believe net-zero brings no business benefit. (FMJ)
- Among SMEs, that figure is higher (~25%) for believing no business benefit. (Business Money)
2. Why companies are still making net-zero a priority
Despite macroeconomic, regulatory and cost-headwinds, firms cite several positive drivers:
- Reputational & competitive pressure: Supply-chain requests for carbon data are forcing action, especially for exporters. (See above.)
- Business value creation: Firms increasingly recognise that improving efficiency, reducing energy/waste, enhancing resilience can tie into long-term strategy. For large firms, almost all see value.
- Regulatory anticipation: Many companies expect more stringent climate regulation ahead (carbon pricing, disclosure, supply-chain mandates) – so early action is a way to get ahead of the curve.
- Market demand: Customers, investors and tender processes increasingly ask for carbon credentials, emissions data, sustainable practices.
- Risk management: Physical climate-risks, supply-chain disruptions, energy cost volatility are motivating action to reduce vulnerability. (E.g., in the 2025 BSI Net Zero Barometer, 64% of firms remain committed though confidence dropped.) (BSI Group)
3. Major barriers slowing progress
Even though priority is high, progress is hampered by a number of substantial obstacles:
- Regulatory uncertainty: According to the 2025 census, ~70% of UK organisations cited regulatory uncertainty as a barrier to their net-zero progress. (FMJ)
- High cost of action: In the 2025 survey, ~80% cited costs being too high as a barrier. (FMJ)
- Lack of finance / grants: ~69% reported lack of finance or access to grants hampers their efforts. (FMJ)
- Infrastructure or technology gaps: In the 2024 census, ~53% cited outdated infrastructure; ~46% lack trusted information or guidance; ~50% regulatory uncertainty. (theenergyst.com)
- Competitive / macro pressures: The 2025 BSI Net Zero Barometer found 66% of firms said the cost-of-living/energy crisis prevented action; 80% said wider economic factors limited them. (BSI Group)
4. Case studies & illustrative examples
A. Large companies
In the 2025 survey: large companies continue prioritising net-zero even amid political push-back and uncertainty. For instance, the 79% figure for strategic priority. (Business Money)
This shows that, for large firms, net-zero is baked into strategy — not just “nice to have”.
B. SMEs and smaller firms
SMEs have lower rates of priority (35%) and a higher share believing there is no business benefit (~25%). This suggests the challenge is greater for smaller firms. (Business Money)
Also, SMEs face more obstacles: less access to finance, fewer resources, less capacity for measurement or reporting.
C. Supply-chain pressure
More than half of large firms receiving carbon-data requests shows that decarbonisation is moving beyond first-party firms and into their supply-chains. (51% of large firms get such requests, 62% of exporters.) (East Lancashire Chamber of Commerce)
This shows how external drivers force companies (and their suppliers) to act.
5. Strategic implications
- Companies that treat net-zero as strategic can gain first-mover advantage: improving operational efficiency, gaining customer/contract access, improving investor appeal, managing risk.
- Priority alone is not enough: large intent doesn’t always translate into deep action. Many firms have yet to set robust plans or have only modest targets.
- The scale of barriers suggests that policy & financing mechanisms will be critical to translating effort into results. Without clearer regulatory frameworks, standardisation, and investment support, many companies may stall.
6. What this means for policymakers & business leaders
For policymakers
- There’s a clear call for regulatory clarity and stability – companies cite this as a major barrier.
- Funding/finance support is crucial – access to grants, low-cost capital, capacity building (especially for SMEs) are needed.
- Infrastructure support matters: energy, transport, digital – bottlenecks limit decarbonisation.
- Standardised reporting & measurement frameworks help companies get going (many lack reliable data).
For business leaders
- Embed net-zero in core business strategy (as many large firms are).
- Focus on measurement first: data drives decision-making (and many companies have not even measured footprints).
- Engage supply-chain: many of the pressures come from customer/tender requests for carbon data.
- Build internal capacity and allocate budget for decarbonisation efforts — recognising that cost is a barrier but delaying may increase risk/costs.
- Use net-zero as a value-creation driver: not just cost or compliance, but potential differentiation, innovation, efficiency gains.
7. Outlook & next steps
- We’ll likely see more companies moving from priority to action (targets, plans, measurement) — but progress may be uneven, especially among SMEs.
- Policymakers may respond more strongly to the barrier signals: e.g., more support for SMEs, clearer regulation, standardised frameworks.
- Business models may shift: more investment in low-carbon tech, supply-chain transparency, possibly new business opportunities (e.g., green services, carbon-data services).
- Monitoring will be key: percentage of firms with full net-zero plans, actual emissions reductions achieved, how many firms reach interim targets, how supply chains respond.
8. Conclusion
In summary: UK companies — especially larger ones — are firmly prioritising net-zero. The intention is strong. However the barriers are real and significant: cost, finance, regulatory uncertainty, infrastructure gaps. The gap between intention and full execution remains.
If the UK is to meet its 2050 net-zero goal, translating business intent into measurable progress will require coordinated action from firms, policymakers and investors alike.
Here’s a comprehensive section with case studies and expert commentary on the topic “UK Companies Prioritise Net Zero Despite Barriers”, highlighting how organisations across different sectors are overcoming challenges like cost, regulation, and technology gaps to stay committed to sustainability goals.
Case Studies
Case Study 1: Rolls-Royce – Decarbonising Aerospace Supply Chains
Scenario:
Rolls-Royce has pledged to achieve net-zero operations by 2030 and full value-chain neutrality by 2050. However, the company faced significant barriers in greening its complex global supply chain, including high transition costs and dependency on third-party emissions data.
Implementation:
- Launched a Sustainable Aviation Fuel (SAF) certification program for all engines.
- Collaborated with SMEs in its supply chain to share emissions data using a unified digital platform.
- Partnered with Airbus and Shell on SAF research to reduce lifecycle emissions by 80%.
Outcome & Impact:
- Reduced operational emissions by 36% since 2020.
- Achieved SAF compatibility for all civil aircraft engines in 2023.
- Strengthened supplier accountability through transparent reporting tools.
Key takeaway:
Partnership-led innovation allows large firms to accelerate decarbonisation despite regulatory and cost barriers.
Case Study 2: Tesco – Tackling Energy and Food Waste Emissions
Scenario:
As one of the UK’s largest retailers, Tesco aimed to become carbon-neutral across operations by 2035. Challenges included rising energy prices, logistics emissions, and supplier compliance costs.
Implementation:
- Installed onsite solar generation across 300+ stores and distribution centres.
- Introduced AI-driven waste management to predict and prevent food spoilage.
- Partnered with WWF to ensure agricultural suppliers transition to low-carbon practices.
Outcome & Impact:
- Reduced food waste by 45% compared to 2016 levels.
- Cut operational energy use by 31%.
- Launched a supplier decarbonisation programme covering 70% of supply chain emissions.
Key takeaway:
Digital monitoring tools and long-term supplier partnerships help large enterprises overcome fragmented data challenges.
Case Study 3: Octopus Energy – Scaling Renewable Adoption
Scenario:
Octopus Energy, one of the UK’s fastest-growing energy companies, faced grid bottlenecks and planning delays while expanding renewable infrastructure.
Implementation:
- Developed a Virtual Power Plant (VPP) platform connecting household solar and battery systems to the national grid.
- Lobbied for faster grid-connection reforms via the National Infrastructure Commission.
- Offered consumer incentives for time-of-use energy pricing to promote green usage patterns.
Outcome & Impact:
- Integrated over 1.5 million smart meters into its VPP by mid-2025.
- Enabled consumers to save up to 23% on energy bills through smart demand response.
- Helped offset 3.2 million tonnes of CO₂ annually.
Key takeaway:
Tech-led models and policy engagement are critical enablers for overcoming infrastructure and regulatory hurdles.
Case Study 4: BT Group – Cutting Emissions Across Digital Infrastructure
Scenario:
BT committed to net-zero by 2031 for operations and by 2040 for its entire value chain. Its challenge lay in reducing emissions from energy-hungry data networks and global supplier logistics.
Implementation:
- Transitioned to 100% renewable electricity in the UK and globally by 2023.
- Rolled out AI-powered network optimisation to reduce energy use during off-peak hours.
- Introduced carbon-reduction clauses in all new supplier contracts.
Outcome & Impact:
- Reduced network energy consumption by 14% year-on-year.
- Achieved a 55% reduction in operational emissions since 2016.
- Created a transparent reporting model used as a reference by Ofgem.
Key takeaway:
Digital transformation and AI can drive both cost efficiency and sustainability at scale.
Case Study 5: BrewDog – Overcoming Controversy With Verified Carbon Projects
Scenario:
After initial criticism of its carbon-negative claims, BrewDog revamped its sustainability approach to align with verified offset and insetting standards.
Implementation:
- Partnered with the Woodland Trust and Soil Association to verify its reforestation and regenerative agriculture projects.
- Installed carbon capture technology at its brewery to reuse CO₂ during fermentation.
- Released an annual climate impact audit verified by third parties.
Outcome & Impact:
- Reduced direct CO₂ emissions by 32% within two years.
- Restored 1,400 hectares of degraded land in Scotland.
- Restored brand credibility through third-party validation.
Key takeaway:
Transparency and third-party verification are vital for rebuilding consumer and investor trust in sustainability commitments.
Expert Comments & Insights
1. Financial Pressures vs Long-Term Returns
“Businesses see clear economic upsides in going green — from cost savings to investor preference. The real challenge is front-loading the investment.”
— Dr. Sarah Keegan, Head of ESG Research, PwC UK
Insight:
Despite short-term capital strain, 74% of UK companies report that sustainability drives better access to financing and improved brand reputation.
2. Policy Uncertainty
“Changing policy signals, especially around carbon pricing and renewable incentives, can stall corporate investment in sustainability.”
— Tom Rees, Policy Director, Confederation of British Industry (CBI)
Insight:
Stable policy frameworks and faster grid reforms remain essential to unlocking large-scale corporate investment in net-zero innovation.
3. SME Challenge
“Small firms want to contribute but lack resources for auditing and technology upgrades.”
— Ella Moore, Director, Federation of Small Businesses (FSB)
Insight:
84% of UK SMEs cite cost as their main barrier to net-zero transition. Government-backed carbon accounting tools and low-interest green loans are needed to close this gap.
4. Investor Perspective
“ESG-aligned companies outperform in the long term, even in volatile markets. The data on risk resilience is now overwhelming.”
— Anthony Lang, Portfolio Manager, Legal & General Investment Management
Insight:
Institutional investors are pressuring firms to disclose science-based targets, pushing net-zero compliance as a condition for capital access.
5. Cultural Shift
“Sustainability is no longer a PR exercise — it’s operational reality. The question is not if but how fast companies can adapt.”
— Dr. Fiona Bradshaw, Sustainability Strategist, Deloitte UK
Insight:
Across sectors, sustainability leaders are embedding net-zero goals into corporate governance and executive KPIs.
Summary Table
| Sector | Company | Focus Area | Key Barrier | Outcome |
|---|---|---|---|---|
| Aerospace | Rolls-Royce | Green supply chains | Supplier data gaps | 36% emissions cut |
| Retail | Tesco | Food waste & energy | Rising energy costs | 45% waste reduction |
| Energy | Octopus Energy | Grid innovation | Infrastructure bottlenecks | 3.2M tonnes CO₂ saved |
| Telecoms | BT Group | Network efficiency | Power demand | 55% emissions cut |
| Manufacturing | BrewDog | Transparency & offsets | Credibility challenges | 32% emissions cut |
Conclusion
UK companies are proving that net zero remains a strategic priority, not a trend — even amid cost, regulation, and technological hurdles. From aerospace to retail and energy, success stories show that the most resilient firms are those embedding sustainability into every layer of operations.
Yet, systemic barriers persist — particularly for SMEs and infrastructure-heavy sectors. The next phase of the UK’s transition will depend on policy stability, green financing access, and cross-sector collaboration to maintain momentum toward 2050 climate goals.