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Majority of UK firms set to miss net zero deadline

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Businesses Net Zero

The Government’s deadline for net zero is unlikely to be met by the majority of UK firms if they continue along the same trajectory. 

That’s according to major new research from Dr Chris Brauer, Goldsmiths, University of London, in partnership with Microsoft, which suggests that just 41% of UK organisations are on track to meet the Government’s target for net zero carbon emissions by 2050. 

Despite many firms launching new sustainability initiatives and making bold claims on their commitment to the environment, the research suggests that 74% of firms have a ‘one fit in and one foot out’ strategy on sustainability. That’s because strong intent is not necessarily translating to solid action. 

Based on online surveys of 1,707 UK business leaders and 2,153 employees, the research report includes insights from leading British organisations, as well as prominent sustainable business experts from across government, industry and academia.

The ambition-action gap has not gone unnoticed by UK workers. According to the survey, 72% of employees surveyed felt that environmental sustainability should be a top priority for businesses over the next five years, yet only 19% report that their employer implements their current sustainability plan efficiently. Tellingly, only 17% of employees believe their work premises are as environmentally friendly as their own home. This is important, as 48% of employees surveyed said the strength of a firms’ sustainability plan would impact where they choose to work.

The challenges for business and a blueprint for net zero

The report points to the most pressing sustainability challenges identified by UK leaders in meeting net zero goals and outlines a practical blueprint of short- and long-term actions to overcome them. When asked to identify their top three most pressing challenges in the next five to 10 years, the top challenges highlighted by organisations surveyed include:

Actioning the strategy – Concerns about having a clear organisational sustainability strategy (43%)

Guidance – 41% of respondents cited clear government guidance as a challenge, but the report points to the need for whole systems thinking, including collaboration between government, commerce, academia and NGOs to collectively address barriers to net zero

Skills – Having in-house expertise and skills to support a sustainability strategy (40%)

Financing – Having access to funding to implement their sustainability plan (36%)

Getting the most out of technology – The availability of technology to support sustainability initiatives (33%)

Which companies are leading in sustainability?

The research team developed a scorecard against which to benchmark UK organisations’ progress on environmental sustainability. Based on the results, organisations were categorised into one of three groups:

Sustainability Leaders – just 11% of UK organisations – distinctive in their ability to unlock funding and develop technology to meet sustainability goals, with highly supportive leadership and strong stakeholder buy-in. This group is on track to meet net zero targets.

Aspirational – 74% of organisations – better at raising their ambitions and designing strategies for sustainability than executing them. They have the operational potential to reach net zero, but faster transformation is needed.

Stragglers – only 15% of organisations – have embedded sustainability within their strategy but are currently making very slow progress on goals. This group is unlikely to reach net zero by 2050, unless ambition becomes genuine action.

One factor setting the Sustainability Leaders apart is their ability to harness the potential of technology to amplify and accelerate their net zero strategies. 76% of this group are investing in R&D for new technologies, including tech to measure carbon emissions, and many are also building the in-house skills needed to make the most of these technologies.

Clare Barclay, CEO of Microsoft UK, noted, “If the UK is to meet its net zero ambitions, public and private sectors need to join forces to define the meaning of real net zero, agree how to measure progress and build markets that can deliver a just, prosperous future for everyone.

“Technology will play a key role in addressing these challenges and it’s clear from our research that those organisations that have embedded technology in the heart of their strategies are the ones that have made the most significant progress against their sustainability goals. And whilst it is encouraging that so many of the organisations surveyed are taking the threat of climate change seriously, the time has come to move from ambition to action. We must work collectively to accelerate our journey to net zero.”

Dr Chris Brauer, Director of Innovation, Institute of Management Studies (IMS) at Goldsmiths, University of London, added, “UK organisations have strong net zero ambitions. But to truly address the climate emergency before us, actions must speak louder than words. Today’s findings don’t just call for progress, they outline a practical short- and long-term blueprint to help organisations accelerate net zero progress. If organisations can prioritise areas such as cross-sector collaboration, stakeholder buy-in, in-house expertise and technology to track carbon reduction progress, the positive environmental impact could be seismic.”

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