Business Responds To The Government’s Net Zero Strategy (BEIS) & Review (HM Treasury)

Matthew Fell, CBI Chief Policy Director, said:

“The Net Zero Strategy and Review fills in some of the blanks on how we realise the UK’s decarbonisation ambitions. What’s clear is that Government plans can only be achieved alongside swift action from businesses. Undoubtedly many of these initiatives will help firms better understand how to unleash more innovation and investment – and put us at the forefront of global climate action ahead of COP26.

“Establishing a grant scheme for heat pumps will help deliver the ambitious roll out we need in the years ahead and bring down the cost of the technology. Extra funding for EV charge points and manufacturing of vehicle batteries will accelerate emissions reductions and boost green growth and jobs in our economy. Cash for innovation projects will help make the most of our world leading science and technology advances.

“But there are still some pieces of puzzle missing. Strong consumer incentives to make homes more energy efficient and delivering business models to make carbon capture and hydrogen projects more investable need to be brought forward urgently. To truly transform the UK economy based on sustainable and green growth, we need to push further and faster and make key decisions on how to finance the transition to net zero. An honest conversation needs to happen here in the UK about how we pay to go green”.

Alex Hall-Chen, Senior Policy Advisor at the Institute of Directors, said: "The Government’s Net Zero Strategy is a welcome first step on the roadmap to achieving net zero. It goes some way to providing clarity on a range of initiatives which will help businesses to increase investment and innovation to meet the UK's decarbonisation goals.

"Sustainability is a key priority for IoD members, with our research showing that four in five directors believe it is important for their organisation to operate in an environmentally friendly and sustainable way.

"However, there is still a huge job to be done to educate business on how to meet the challenge. Only one in four IoD members feel that they fully understand the ways in which their organisation can lower its carbon footprint and meet net zero carbon goals, and one in three consider the costs associated with moving towards net zero prohibitive. Businesses will therefore need more support to design and implement robust net zero plans.

"We urge the Government to work in close partnership with business to make net zero a reality."

Shevaun Haviland, Director General of the British Chambers of Commerce, said:

On the Net Zero Strategy

“This is a positive step on the journey to net zero, however many questions on how we will get there still remain unanswered.

“The key requirement for a successful transition to a carbon neutral economy are meaningful incentives for business to invest in green innovation and reduce their environmental impact.

“The upcoming budget needs to turbocharge the transition to net zero by removing disincentives to green investment, including removing plant and machinery from the valuation of property for business rates purposes.

“The government has made several admirable commitments following the 6th Carbon Budget, but it must now set out how it will support businesses to deliver these ambitions.

"Businesses will of course welcome the commitment to more new green jobs and plans to attract greater private investment, but clear plans on how they can play their part in the climate challenge is what is needed most.

“Our research in July found that 9 out of 10 small businesses have yet to draw up plans to reach net zero, and that cost was the number one barrier they perceived in reaching that ambition.

“Government needs to find ways to help business help themselves, especially those smaller firms who remain understandably concerned about perceived extra costs and red tape if they want to adopt green technology and practices.”

On the Heat & Building Strategy

“While this is a very strong start to decarbonising UK homes, and we welcome the government showing world-leading ambition, we need to see more detail of how businesses will be supported to make the switch from gas boilers, and more funding to allow SMEs to make the transition at the pace the government has set out”.

On the Green Finance Roadmap

“The Green Finance Roadmap sets new net zero expectations for the financial sector, brings forward crucial reforms and announces a full strategy for net zero finance in 2022. This document brings the UK in line with many other countries as well as the EU on green finance and sends a strong message to the private sector and financial institutions that the government is serious about net zero and that we need to do more, faster. We welcome the signal this sends and the clarity for UK businesses around what is expected of them.”

On the Net Zero Review

“Businesses will understand that the ambitious transition to a carbon neutral economy puts strain on public sector finances in the years to come, however they are in no position to bear the brunt of tax rises. The impact of the pandemic and adapting to our new trading relationship with the EU has left many firms struggling to put themselves back on a sustainable footing, and they simply will not be able to withstand further tax rises that add up-front costs to their balance sheets.

“It is imperative that the Chancellor uses the upcoming Budget to reassure firms that increased costs will not disproportionately fall on them in the coming years, boosting confidence at this crucial stage in the economic recovery.”