How has the business world responded to the Prime Minister’s Net Zero plans?

Following on from Prime Minister Rishi Sunak’s net zero conference in which he scrapped a range of plans integral to the UK’s climate policy, we explore how organisations have responded. 

The approach to fuelling Britain  

A key point of contention is the approval of the Rosebank oil and gas project in the North Sea, which will generate more than 69,000 barrels of oil daily equalling roughly 200 million tonnes of CO2 emissions over its lifetime. The green sector has criticised the plan, with the Climate Change Committee (CCC) recommending that new North Sea oil and gas projects should be avoided if climate targets are to be honoured. 
 
The International Energy Agency outlined in its pathway to net zero by 2050 that to reach net zero, there must be no expansion of oil and gas extraction beyond that already agreed upon by the end of 2021. Many organisations argue that the government’s decision to approve plans to expand fossil fuel extraction has solidified the UK’s detachment from former “climate leader” status.  

A legal challenge 

Friends of the Earth and ClientEarth, two organisations that previously took action on the UK Government’s failed climate policy are now exploring the option of a new legal challenge against the UK government, arguing these policies fail to deliver on legally binding emissions cuts.    
 
Naturalist and environmental activist Chris Packham has also voiced his plan to legally challenge the government's changes to net zero policy commitments. Packham argues the government is “acting illegally” with their recent climate policy changes and intends to take action under the Climate Change Act which advises the government on carbon budgets and targets, all of which Packham believes the government is failing to honour.   

“Confusion and uncertainty”  

The UK’s auto industry has delivered one of the more frustrated responses. Sunak’s plan to push back the ban on new sales of petrol and diesel vehicles to 2035 has caused “confusion and uncertainty” and is putting EV investment at risk, industry leaders argue. 
 
There are also concerns that this delay will impact certain auto manufacturers’ commitments to the Zero Emission Vehicle (ZEV) mandate; a policy determined by the Department for Transport in which 80 per cent of new cars and 70 per cent of new vans sold in Britain are required to be zero emission by 2030, reaching 100 per cent by 2035. Delaying the ban of sales of new ICE vehicles jeopardises this.  

Biodiversity on the backbench 

As part of Sunak’s new net zero approach, the government has pushed back biodiversity net-gain (BNG) targets making developers achieve at least 10 per cent BNG on all large domestic, commercial and mix used sites from November this year. This has now been delayed until 2024.  
 
This isn’t the first time the BNG target has been delayed, originally being back-benched amid the Covid-19 pandemic. Although many developers set their own BNG targets and adhere to them, the government enforced BNG targets are the only ones ensuring all developers consider biodiversity in their projects.  
 
“This is yet another blow to sustainable development and risks undermining national efforts to put the collapse of nature into reverse,” said Simon McWhirter, Deputy Chief of the UK Green Building Council. “Responsible developers large and small have been gearing up for this change for years, with many of our members creating dedicated jobs to deliver net gain…”  
 
A host of organisations have been calling for the 10 per cent BNG to be increased, further prioritising habitat restoration, regeneration, and environmentally conscious land use; the government’s choice to delay this policy entirely is a significant blow to green industries.  

The wider economic impacts  

A collection of investment firms has signed a letter to the Prime Minister warning of the negative impact his new net zero policy will have on inward investment into the UK.  
 
32 financial institutions, including Aviva Investors, the Local Authority Pension Fund Forum, and Jupiter Asset Management, have expressed “deep concern” over the decision to delay key green policies essential for the UK’s net zero plans.  
 
The investor groups represent £1.5trn of assets under management and targeted their criticisms principally at the ICE vehicle ban delay. The capacity for industries to plan ahead and manage their environmental targets will be damaged by the government’s green policy delays, with investment in low-carbon technologies dropping and taking longer to achieve prevalence.  

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