More ambition is needed to maintain the UK’s green economic leadership

“The net zero transition represents a key economic opportunity for UK business, and we welcome the government’s ambition to scale up green energy production and develop green industries.

“The establishment of a Net Zero Business and Investment Group is an important recognition of the importance of effective collaboration between government and business to achieving the UK’s net zero target, and we look forward to supporting the group’s work.

“The 2023 Green Financial Strategy provides a detailed blueprint of how the government plans to mobilise the huge private sector investment that will be needed to decarbonise the UK economy by 2050 – and also become a leading player in the global green financial system.

“We applaud the government’s efforts to develop new frameworks for corporate sustainability disclosure, transition planning and improved product labelling. The government is also kickstarting important work on how large companies can start to deliver more comprehensive reporting on scope 3 emissions.

“However, despite the volume and detail of today’s announcements, there is nothing obvious within these plans which matches the ambition of the US’s Inflation Reduction Act. It remains an open question as to whether the UK can offer the incentives for green investment that can sustain it as a leader in the global green economy.

“The measures announced today also represent a missed opportunity to drive forward the net zero transition among SMEs. Crucially, the government recognises that SMEs account for 50% of business emissions. But much more needs to be done to launch them on their journey to net zero.

“The interests of SMEs will be best served by a managed transition marked by a clear timeline for how and when policies will affect them. There is also a clear need for additional incentives and guidance to support SMEs to decarbonise, to address the difficulties they face with resourcing and financing the transition.”