Net zero isn’t a luxury: why UK business must keep its nerve in 2026

Let’s be absolutely candid: the siren song of easing off climate commitments is tempting the corporate class and it stinks.

If 2025 was indeed the year business quietly began retreating from net zero, watering down pledges or scrapping them outright, then 2026 must be the year UK firms rediscover backbone and purpose. After all, the alternative isn’t merely inconvenient; it is recklessly self-defeating.

The Guardian’s recent investigation suggests that, from retailers to banks, carmakers to councils, pledges once trumpeted from press release rooftops are being softened or shelved. The rhetoric of carbon-neutral economies now reads, all too often, like a relic of corporate virtue signalling rather than a serious business strategy.

Yet here’s the part no executive memo seems to state with enough clarity: net zero isn’t a fad. It is the defining economic transformation of our era, as seismic as electrification or the internet. Treat it as a mere box-ticking exercise and you will wake up in a world where markets and reputations have passed you by.

Let’s dismantle the fearmongering for a moment. There’s a narrative circulating among the financially cautious that climate action is a cost rather than an investment. That delivering net-zero targets detracts from near-term profits. That shareholders want dividends, not decarbonisation. And then there’s the grumbling about regulation: “not now, not yet, don’t you see we have bills to pay?”

Balderdash. Yes, there are genuine short-term costs to decarbonisation. But those are far outweighed by long-term economic opportunity. Research by credible bodies such as the British Chambers of Commerce and McKinsey shows the net-zero transition could be worth over £1 trillion to UK business by 2030, through innovation, exports and first-mover advantage. That’s not greenwash: that’s maths.

Indeed, if British business becomes the laggard rather than the leader, it won’t just cede moral high ground, it will cede market share. Markets today are global, and buyers increasingly demand sustainability from their suppliers. Investors are doing the same. Lenders, insurers and big pension funds are incorporating climate risk into pricing and capital allocation in ways that will only intensify. To flinch now is to risk being uninvestable in the very near future.

Some might counter that regulatory uncertainty, especially post-Brexit policy shifts or political swings, makes sustained net-zero commitments precarious. And yes, the political landscape has been fractious. But that’s exactly why business leadership matters. When politicians waver, when policy is debated, corporate resolve can act as the stable anchor for long-term strategy. Step back and someone else will fill the vacuum — and it won’t be challengers with sustainability at their core.

Let’s touch on those sectors where back-tracking has been most glaring in 2025. Finance, for instance, saw cracks in its climate alliance frameworks with departures from net-zero banking coalitions. Banks such as HSBC delayed parts of their climate goals, drawing sharp criticism.

The logical leap here, that commitments can be postponed when the going gets tough, is exactly where the sceptics win. But imagine the message it sends if UK banks, the very institutions underwriting corporate growth, say they will only play ball when profits are guaranteed. It instantly undermines trust in the entire system of environmental, social and governance (ESG) integration in corporate strategy.

Retailers, too, have delayed ambitions. Supply-chain complexities and cost pressures are cited as reasons. But shoving targets back a decade or more does not solve those issues; it merely kicks the problem into the future.

And let’s not pretend automotive and aviation are immune, areas where clear net-zero pathways have, in places, ground to a halt. Travelling for Business recently highlighted how even policy support has become ambivalent.

So, where do we go from here? First: reaffirmation, not revision, of net-zero commitments. Ambition must translate into actionable, transparent transition plans rooted in science — not adjustable targets that bend in the breeze of short-term pressures.

Second: collaboration over retreat. Businesses big and small should lean into frameworks like the Science Based Targets initiative, which offers rigorous, scientifically grounded pathways to emission reductions. These are not gimmicks; they are industry-agnostic roadmaps to resilience.

Third: innovate, don’t abdicate. Let’s double down on electrification, circular economy models, and zero emissions supply chains. And let’s bring SMEs along for the ride. Data from the latest UK Net Zero Business Census shows that a majority of larger firms still regard net zero as strategic — a sign of encouragement if acted upon.

Finally, let’s call out the folly of short-termism. I am no romantic, nor a climate activist by trade. But business is nothing without its reputational capital. The choice is simple: be remembered as the generation that met the challenge of our age with grit and ingenuity, or the one that blinked.

UK business must not water down its net-zero pledges in 2026. Not because it’s easy, but because it is the only credible path to sustainable growth, investor confidence and competitive advantage in a rapidly reshaping global economy.